Electronic commerce, also known as E-Commerce or Internet commerce, refers to the purchase and sale of goods or services over the Internet, and the transfer of money and data to execute these transactions. E-Commerce is often used to refer to the sale of products online, but it can also describe any type of commercial transaction that is facilitated through the Internet.
The first E-Commerce transaction took place in August 1994, when a man sold a CD of the Sting band to his friend through his website. Since then, E-Commerce has evolved to make products easier to discover and buy through online retailers and markets.
These are the basic concepts that every electronic commerce process entails:
- Online product catalog
- Catalog of prices
- Characteristics and description of Products
- Shopping cart
- Payment method
- Shipping method
- Online marketing and promotions
- Delivery Methods
- Integration with third parties such as: ERP, Inventories, Databases and others
- E-Commerce can help companies reduce the operating costs and fixed costs of a physical store such as rental costs, salaries, public services and others.
- It is faster and more convenient than most traditional business transactions, and can reach consumers in areas where geographical barriers have prevented the expansion of physical stores.
- Investing in eCommerce can also increase revenue: it allows companies to reach more customers than just physical locations, and also has great potential to influence more purchases in the store.
- For consumers, E-Commerce reduces costs by offering more options. For example, if you go to Best Buy, you must pay Best Buy prices for a TV. Online, you can compare Best Buy TV costs with Target TV costs, or you can check identical TV brands on eBay, Facebook Marketplace and many other sites. Essentially, electronic commerce allows you to compare prices with everyone, rather than just your geographic region, allowing you the luxury of choosing the best brand for your budget.
Types of Business Models in E-Commerce
There are three e-commerce models that can describe almost all transactions that take place between consumers and businesses.
- Consumer Business (eCommerce B2C):
When a company sells a good or service to an individual consumer, such as a purchase on Amazon.
- Business to business (eCommerce B2B):
When a company sells a good or service to another company, such as when a food producer enables an eCommerce for supermarkets to buy their products and then resell it to the final customer.
- Consumer to Consumer (eCommerce C2C):
When a consumer sells a good or service to another consumer, such as when a user sells a product to another user through eBay.
eCommerce can take a variety of forms that involve different transactional relationships between companies and consumers, as well as different objects that are exchanged as part of these transactions.
- eCommerce Retail sale:
The sale of a product by a company directly to a customer without any intermediary.
The sale of bulk products, often to a retailer who then sells them directly to consumers.
- Drop shipping:
The sale of a product, which is manufactured and sent to the consumer by a third party.
The collection of money from consumers before a product is available to increase the initial capital needed to bring it to market.
Automatic recurring purchase of a product or service on a regular basis until the subscriber decides to cancel.
- Inventory Management: Physical products:
Any tangible asset that requires the inventory to be replenished and the orders sent physically to customers as sales are made.
- Digital products:
Downloadable digital products, templates and courses, or media that must be purchased for consumption or license for use.
A skill or set of skills provided in exchange for compensation. The time of the service provider can be purchased for a fee.
Key features of an E-Commerce Platform
Any eCommerce software will allow customers to buy their products and services in their online store. What differs is the degree to which they can unify and take advantage of both front end and back end applications. eCommerce platforms provide the unification of business processes, where companies can obtain full visibility throughout their company and, ultimately, meet the expectations of the most demanding customers. An electronic commerce platform should:
a) Integrate the different systems and databases of a company with its e-commerce platform, such as: integrate accounting, integration with POS, integration with inventory and order management, integration with your CRM, finance and others similar.
b) Provide a 360 ° view of the customer: Offer consistent and personalized experiences across multiple channels, targeted marketing and superior customer service with a unique view of all customer interactions and transactions at all points of contact and channels.
c) Intelligent order management: Maximize the profitability of your strategy by centralizing order management and taking a single view of inventory in all channels and business units of the supply chain. Define the customer's purchase processes, the delivery process and the return process both online and in stores.
The purpose of e-commerce platforms has gone beyond simply allowing people to buy products and services online. Nowadays, e-commerce platforms integrate an entire commercial process from the web, through the integration of inventories, finances, operations, and logistics, providing a unified business environment that is easily scalable, customizable and automated. Whether you do business in the B2B or B2C environment, your e-commerce platform should do more than simply facilitate transactions if you want to be competitive in the market.