The term e-commerce is really a "catch-all" phrase that encompasses many concepts. According to Dictionary.COM, the term commerce is defined as follows: "The buying and selling of goods, especially on a large scale, as between cities or nations". This definition is straight forward and easy to understand. From here, we add the "e" for "electronic", and we derive the definition: "buying and selling of goods electronically". This typically means that orders and payments pass electronically. However, there is more to this - much more, as follows:
B2B (Business-to-Business) E-Commerce is conducted through industry-sponsored marketplaces and through private exchanges set up by large companies for their suppliers and customers. Of course, companies also sell to business customers through their own Web sites. In the early 2000s, industry-sponsored marketplaces (ISMs) accounted for only a small percentage of B2B transactions. The main reason, according a survey of 25 ISMs published in the industry periodical B to B, is that ISMs have had problems convincing buyers and sellers to use them. For one thing, companies are reluctant to acquire customized designs through marketplaces because they don't want to reveal proprietary information on an site that is shared by competitors. These companies fear they will give away too much information about their competitive strategies simply by taking part in such a marketplace. ISMs also do not necessarily level the playing field for small companies against larger competitors. As a result, companies use such marketplaces mainly to purchase commodity goods, manage their supply chains, and conduct indirect procurement transactions not related to their core business. Business-to-business (B2B) e-commerce is significantly different from business-to-consumer (B2C) e-commerce. While B2C merchants sell on a first-come, first-served basis, most B2B commerce is done through negotiated contracts that allow the seller to anticipate and plan for how much the buyer will purchase. In some cases B2B is not so much a matter of generating revenue as it is a matter of making connections with business partners.
B2C (Business-to-Consumer) E-Commerce is basically a concept of online marketing and distributing of products and services over the Internet. It is a natural progression for many retailers or marketer who sells directly to the consumer. The general idea is, if you could reach more customers, service them better, make more sales while spending less to do it, that would the formula of success for implementing a B2C e-commerce infrastructure.
For the consumer, it is relatively easy to appreciate the importance of e-commerce. Why waste time fighting the very real crowds in supermarkets, when, from the comfort of home, one can shop on-line at any time in virtual Internet shopping malls, and have the goods delivered home directly.
Who should use B2C E-Commerce?
• Manufacturers - to sell and to retail the business buyers
• Distributors - to take orders from the merchants they supply
• Publisher - to sell subscriptions and books
• Direct Sales Firms - as another channel to reach the buyers
• Entertainment Firms - to promote new products and sell copies
• Information Provider - to take payment for downloaded materials
• Specialty Retailers - Niche marketers of products ranging from candles, coffees, specialty foods, books use it to broaden their customer reach.
• Insurance Firms - On-line rate quotes and premium payments have made it easier for this industry to attract and retain customers. In fact, virtually any business that can deliver its products or provide its services outside its doors is a potential user.
C2C (Consumer to Consumer) E-Commerce has also emerged that allows unknown, un-trusted parties to sell goods and services to one-another. An excellent example of this is found at Ebay, where consumers sell their goods and services to other consumers. To accommodate this activity, several technologies have emerged. Firstly, Ebay allows all sellers and buyers to rate one another. In this manner, future prospective purchasers may see that a particular seller has sold to more than 2,000 customers - all of whom rate the seller as excellent. In another example, a prospective purchaser may see a seller who has previously sold only 4 times and all 4 rate the seller poorly. This type of information is helpful. Another technology that has emerged to support C2C activities is that of the payment intermediary. Pay Pal is a good example of this. Instead of purchasing items directly from an unknown, un-trusted seller, the buyer can instead send the money to Pay Pal. From there, Pay Pal notifies the seller that they will hold the money for them until the goods have been shipped and accepted by the buyer.
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