What is E-Commerce and Types of E-Commerce with Diagram

What is E-Commerce and Types of E-Commerce with Diagram

E-Commerce stands for electronic commerce. Before moving to the definition of what is e-commerce and types of e-commerce, First, you have to understand what is commerce. So, let’s discuss what is commerce first.

What is commerce :

Commerce is an important part of a business. It is an interchange of goods or commodities. In simple words, commerce is nothing but buying and selling of goods. That means when we buy a product or service from others or sell a product or service to others then it is called commerce. So the commerce means the trading of goods or services.

If we say a proper definition of commerce, then it can be defined as the field of study that deals with business and its operations.

What is e-commerce :

If we do any type of trading or commerce electronically then it is called e-commerce. Simply, we can say that e-commerce or electronic commerce is the process of buying or selling goods, products or services over the electronic medium.  Here internet is used as the primary electronic medium or network to do this type of transaction. In other words, e-commerce is a medium of trading for goods and services between buyers and sellers through an electronic medium.

E-commerce is also referred as a paperless exchange of a business information using EDI, Email, Electronic fund transfer etc. For example, AmazoneBayFlipkart etc are the world’s leading e-commerce websites. E-payment systems are widely used in those electronic commerce sites. Here we generally use various e-payment method like credit/debit card, internet banking, e-wallet for buying or selling products.

Electronic commerce platforms nowadays seem to be used widely because of their great services and advantages. The consumer can find what they want to buy and purchase it easily from home or anyplace at anytime. Consumers are generally more willing to make a purchase since purchasing process is easy and also very fast.

So far we have discussed the basic concept of the electronic commerce system. Now, let’s head on to the various types of the e-commerce system.

Types of e-commerce system :

There are 6 types of e-commerce systems. They are B2B, B2C, C2C, C2B, B2A, C2A. All these 6 types of e-commerce that are used today are classified based on the nature of the transaction.

B2B (Business-to-Business)

B2B e-commerce can be simply defined as the commerce between companies. In Business-to-Business type of electronic commerce system, companies do business with each other. For say, a manufacturer selling a product to a wholesaler, a wholesaler selling a product to the retailer. Here manufacturer, wholesaler and retailer all are doing their separate businesses.

b2b e-commerce model

Above diagram illustrates the B2B model. There are 3 businesses- wholesaler, manufacturer and the retailer. Here manufacturer has a website using which wholesalers can purchase products from the manufacturer. When a wholesaler places an order on the website, the information regarding the order will be received by the manufacturer through the website. Then after processing the order, the manufacturer will send the product to the wholesaler. After receiving the products wholesaler can sell it to the retailers. This type of business is called B2B model.

B2C (Business-to-Consumer)

B2C model works as its name suggest. In this model, the company sells their products, goods or services directly to the consumer online. Here the customer can view products on the website that they want to buy and can order it. After receiving the order details, the company will process the order and then send the products directly to the customer. For example, Amazon, Flipkart etc are this type of e-commerce business model which we are using in our daily life.

b2c e-commerce

We can view products on the websites like Amazon, Flipkart and can order it. After receiving the order, the selling company of the products processes it and send it to us. Here a business company is selling their products to the customer with the help of an e-commerce website.

C2C (Consumer-to-Consumer)

Here a consumer sells products, goods or services to other consumers using the internet or the web technologies. The C2C business model helps us to sell our assets or properties like a car, house, bike, electronics etc via online to other consumers. OLX, Quickr etc are this type of business model.

c2c e-commerce

Here, if consumer-1 wants to sell a product then he/she can publish the details of the product on the website like OLX or Quickr. The consumer-2 can view the details of the product on that website that consumer-1 wants to sell. If consumer-2 is willing to buy the product that consumer-1 is selling, then the buyer can directly contact the seller and the product will be sold. Here products are selling directly from a consumer to another consumer via the website.

C2B (Consumer-to-Business)

A consumer to the business model is a type of commerce where a consumer or end user provides a product or service to an organization. It is the reverse model of the B2C or business to consumer model, where businesses produce products and services for consumer consumption.

c2b e-commerce

In this business model, individual customers offer to sell products or services to the companies who are prepared to purchase them. For example, if you are a software developer, then you can show a demo of your software or skills that you have on the sites like freelancer, fiverr etc. If a company likes your software or skills then the company will directly buy the software from you or can hire you for their services.

B2A (Business-to-Administration)

B2A or business to administration also referred as the business to government (B2G) commerce, it is a derivative of B2B e-commerce model. in this model, the businesses and government agencies (administration) use central websites to exchange information and do business with each other more efficiently than they usually can off the web.

B2G business is also referred to public sector marketing that means marketing products and services to various government levels. The B2G business network provides a platform to businesses to bid on government opportunities such as auctions, tenders and application submission etc.

C2A (Consumer-to-Administration)

Consumer to administration or consumer to government e-commerce model helps consumers to request information or post various feedbacks regarding public sectors directly to the government authorities or administration. For say, making electricity bill payments through the website government, making payment of taxes, payment of health insurance etc are C2A type of business model.

Consumer to administration or consumer to government e-commerce model provides an easy and instant solution or way to establish communication between the consumers and government.

Debarshi Das

Debarshi Das is a passionate blogger & web developer from Guwahati, Assam. He has a deep interest in robotics too. He holds a BSc degree in Information Technology & currently pursuing Masters of Computer Application (MCA) from a premier govt. engineering college. He is also certified as a chip-level computer hardware expert from an ISO certified institute.

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