Buying and selling is the most simple thing. You stock your products, and buyers pick what they want and pay for it. Trades such as those soon became brick and mortar stores and now in the age of technology things have quickly changed.

Ecommerce is an industry that has no interest in slowing down. Entrepreneurs and retailers alike have a lot to learn about this budding industry and why it’s fundamental in business today.

There will be as many as 2.14 billion digital buyers worldwide by 2021. Any chance to reach a wider audience is important for businesses both big and small to be successful. Most people are familiar with e-commerce, but if not, this article will answer the question of “what is e-commerce”, give an in-depth description of how it works, the different types, and its advantages and disadvantages.

What Is E-Commerce?

E-commerce or electronic commerce is a form of business that allows people and companies to buy and sell products or services online. E-commerce can be conducted over most smart systems (computers, smartphones & tablets) as long as they have a connection to the internet.

Ecommerce doesn’t just stand-alone, it’s intertwined with in-person businesses (either substituting it or in addition), logistics, supply chain, and many more aspects.

Advantages of E-Commerce

Advantages of e-commerce include:

  • Faster buying/selling
  • Ease of finding products
  • Low operational costs
  • Ease of startup ad management of business
  • No geographical limits to customers

Disadvantages of E-Commerce

Disadvantages of e-commerce include:

  • No guarantee on the quality of products
  • Hackers put your personal information at risk
  • Technology failures affect performance quality
  • No direct customer service

Types of E-Commerce

Ecommerce operates in major business brackets. The most popular categories are:







Business-to-Consumer (b2c)

The business to consumer e-commerce model describes the process of selling products and services from a corporation to a customer. This form is used by online retailers and sprung into bloom in the late 1990s.

Online business to consumer models has proved a threat to brick and mortar retailers, which have in turn profited by marking up their prices.

Business-to-Business (b2b)

Business to business is the process of a corporation or corporations selling to another, usually in the form of wholesaler to the retailer. Business to business operations usually happens in the supply chain, which is a sequence of events when a material goes from raw to manufactured.

Business to business models is usually found in industries such as automobiles, housekeeping, and property management.

Consumer-to-Consumer (c2c)

Consumer to consumer e-commerce is when one customer sells to another in a marketplace such as eBay, Etsy, or Craigslist. In this type of model, both the buyers and sellers are consumers and their interaction is facilitated by a third-party site that takes a small price as commission for the sale.

This business model allows consumers to not have to go through the trouble of creating business entities just to sell, it also removes the need for a middleman and allows both parties to interact with each other.

Consumer-to-Business (c2b)

In this model, the individual sells to the business. Freelance sites show how this model works. Consumers have a service and price in mind and wait for business or freelancer to bid for them.

Government to Business (g2b)

Governments use this model to approach businesses and offer them information. These websites usually support auctions and applications.

Business to Government (b2g)

Business to government is a variant of the business-to-business model, in this model governments use websites to trade information with various business organizations. Examples of this model is a small business offering information technology consulting services to a government agency.

E-Commerce Platforms

E-commerce platforms are software applications that allow online businesses to build & manage their websites, marketing, sales, and operations. This allows business owners ease of startup without heavy costs that would be needed to build sites from scratch.

Some Popular e-commerce platforms are

  • Woocommerce
  • Wix
  • Weebly
  • Squarespace
  • Shopify

Online Marketplaces

Online marketplaces are websites where many sellers and buyers are able to trade without leaving the site or app. These sellers and buyers are usually consumers, not businesses, and they are able to sell both products and services.

Some popular online marketplaces are:

  • Amazon
  • eBay
  • Etsy
  • Aliexpress
  • Depop

Social Media & E-Commerce

Social media has become a powerful tool in the e-commerce world, not only has it been used to direct shoppers to websites, create engaging communities and build brands, but it can also be used as a direct shopping tool. Serving as the middleman between the e-commerce website and the consumer that doesn’t want to leave the app. Customers spend 20-40% more with companies engage and respond to customers via social media.

Social media is best seen as the eCommerce “storefront” like that of a brick and mortar. The allure of a brand’s social media presence is useful in drawing in new customers. 90% of businesses are projected to be using some form of social media for customer service in just two years.

Your E-Commerce System

So, what is e-commerce? E-commerce can be seen as an umbrella term for a whole business world with extensive layers, but in the simplest terms, it’s a way to buy and sell products and services online.

The best way to understand e-commerce is to get familiar with the process because it has proven to only grow upward. It is expected that by 2040, 95% of all purchases will be via ecommerce.