Explanation of Types of eCommerce by Ron Kurtus - Succeed in eCommerce: Running an Online or Internet Business. Key words: online sales, purchasing, business-to-business, B2B, business-to-consumer, B2C, selling advertising space, online referrals, School for Champions. Copyright © Restrictions
Types of eCommerce
by Ron Kurtus (9 December 2011)
A major type of e-commerce is performed by large companies, where they buy from other companies and sell to companies or the public. Increasingly, individuals and small businesses have turned to e-commerce to obtain goods and services, as well as to sell them. Besides selling goods, e-commerce can also include selling advertising space and providing sales referrals.
Questions you may have include:
- How do corporations use e-commerce?
- How do entrepreneurs buy and sell with e-commerce?
- What businesses sell advertising space?
This lesson will answer those questions.
Corporations use e-commerce
Large companies and businesses use e-commerce to buy and sell goods and services. The e-commerce is performed with other businesses and consumers.
In e-commerce, transactions between businesses, such as between a manufacturer and a supplier or between a wholesaler and a retailer, are considered business-to-business (B2B) e-commerce.
There can be many B2B transactions made in the process of making a product ready to sell to the consumer. Although the transactions are made electronically, delivery of goods must usually be done physically.
Business-to-consumer (B2C) e-commerce usually consists of companies selling their goods or services over the Internet. In such a case, a person accesses the company website and makes a purchase directly from the web page. In this case, the goods are usually shipped to the customer.
Amazon.com is a prime example of B2C e-commerce. A person goes to the Amazon.com website to look for a book of interest. He then makes the purchase online, and Amazon ships the item to the customer's home.
Most large companies with products small enough to be shipped use this method.
For companies with large products—such as furniture stores—have websites to advertise their products but require the customer to come into the store to make the actual purchase.
Individuals often start up business ventures, selling goods online. Some obtain their products through B2B, some purchase from individuals, and others make their own products.
Using B2B and B2C
Some entrepreneurs set up a business where you make online purchases of goods and services from other businesses (B2B) and then sell your goods online to individuals (B2C).
As an independent publisher with SfC Publishing Co., I use B2B e-commerce to use editorial, printing, and distribution services. Then the books are usually sold online through B2C e-commerce.
A number of people have a business buying from individuals or discounters and then selling the goods online.
Janet would buy goods in garage sales and then sell them on eBay. Her purchases were standard commerce, while her sales were e-commerce.
Make own product
Finally, some entrepreneurs make their own products and then sell them online.
Phillip wrote a software application that he advertised through Google Adwords. When people would come to his website, they could purchase and download the application.
Selling online advertising space
eCommerce also includes selling online advertising space and referring for online sales.
Online newspapers and magazines sell advertising space on their websites. Social media websites also do B2B e-commerce by selling advertising space.
Likewise, owners of content websites, sites that get a lot of traffic, and blogs post ads in order to gain revenue. Although individuals can sell such advertising space, they are considered "mini-businesses" and the initial transaction between them and the advertiser agency is B2B.
For example, you can make a B2B agreement with Google Adsense to post their ads on your site. Google pays you for the service.
Likewise, you can make a B2B arrangement with Amazon.com to post their ads on your site. In this case, you get a commission from any B2C sale they get.
Website entrepreneurs can also gain commissions from sales made through ads posted on their sites. Businesses such as online magazines typically do not act as intermediaries for online sales.
eCommerce is performed by large companies, where they buy from other companies and sell to companies or the public. Increasingly, entrepreneurs have turned to e-commerce to obtain goods and services, as well as to sell them. Another form of e-commerce is selling advertising space and providing sales referrals through websites.
Resources and references
List of eCommerce material - A number of good resources from About.com
Business-to-Business eCommerce - Wikipedia
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Types of eCommerce