E-Commerce+Basics

//**E-Commerce Categories **// The process of using the Internet to allow buyers and sellers to engage in trade is known as e-commerce. The buyers and sellers can be businesses or individuals. The online environment allows businesses to sell to the final consumers (B2C), consumers to sell to consumers (C2C), and businesses to sell to businesses (B2B).

Consumers are probably most familiar with B2C sales because of advertising and personal experiences searching for products and purchasing online. This type of online retail trade is a small percentage of the multi-billion dollars spent online annually. Most online sales occur in the B2B market. The greatest number of consumer sales transactions is on C2C sites.

//**Business-To-Consumer E-Commerce **// Business-to-consumer (B2C) sales is the most recognizable form of e-commerce. Businesses such as Amazon.com, Dell, and Orbitz are examples of online only, B2C businesses that advertise heavily and own large shares of their markets. In contrast, traditional retail businesses operating out of buildings where customers come and shop are called brick-and-mortar stores. Many businesses that traditionally used stores or catalogs for sales have added e-commerce as part of a multichannel strategy. Businesses that offer both traditional and Internet sales are called brick-and-click businesses.

//**Consumer-To-Consumer E-Commerce **// eBay is an example of a company that offers consumer-to-consumer (C2C) e-commerce. eBay is an auction site where individuals electronically submit, or post, products. Buyers use search features to find products they want to buy. They then engage in an auction where individuals bid against each other for the product. The winning bidder must rely upon the seller to ship the product. eBay is the largest online C2C auction site. Many other e-commerce sites also use auctions to link buyers and sellers.

Other types of C2C e-commerce businesses include online exchanges. Best Sellers Exchange allows consumers to trade various products such as books, games, videos, and DVDs with other consumers.

//**Business-To-Business E-Commerce **// Business-to-business (B2B) sales account for the largest total dollar volume of e-commerce. Business markets are different from consumer markets. The average sales amount is much higher. Buyers are more demanding in their product specifications. companies often want their inventory systems connected to suppliers’ systems. The online environment aids this process by allowing information to move rapidly from business buyers to suppliers.

B2B e-comerce web sites offer many of the same features as B2C sites. These features include the ability or order, check inventory, and make payments online.

B2B e-commerce companies may use auctions to sell products. Buying companies may force suppliers to compete in reverse auctions where businesses bid against each other for customer orders.

Success in traditional markets does not guarantee success online. Wal-Mart redesigned its web site more than once to attract a market. Despite Wal-Mart’s large customer base, the total number of users on its web site is much lower than that of Amazon.com, eBay, Yahoo! Shopping, or MSN Shopping. Smaller businesses find it harder to implement e-commerce on their own. These businesses often use an e-commerce service provider to manage their e-commerce functions.