E-Commerce and Its Types (With Benefits & Limitations)

E Commerce And Its Types

The evolution of the internet beyond the not so modernized years has changed the trends of the business empire at a great pace. The world is now a virtual community which means that what used to be an old and simple physical business place limited to one physical area has now turned into a vast marketplace, drawing buyers and manufacturers from different places of the world. It makes business a boon bringing in many benefits, for example, that today in this advancing world establishing an online marketing business is way less expensive because it does not need a physical foundation for a store, the business step-up can be operated 24*7 and 365 days a year meaning anytime these remote functioning hours obviously benefits businesses in making more increased profits.

E Commerce Business

It also allows businesses to examine current products and marketing tactics cost-effectively.The most significant benefit of e-commerce is for small businesses as now they can compete with international companies as customers do not have an idea about the actual size of the firm, they are just concerned with the products that can be trusted and are of good quality.

E-commerce stands for electronic commerce, managing relations and handling business matters that involve marketing data, services, and products utilizing computer telecommunications systems. Although in the domesticated e-commerce normally applies only to the exchanging of products and services across the Internet, the broader financial venture is added. E-commerce combines of business-to-consumer and business-to-business commerce and also the interior business transactions that maintain those actions.

Types of E-Commerce

There are mainly six types of e-commerce: –

  1. Business to Business (B2B)
  2. Business to Consumer (B2C)
  3. Consumer to Business (C2B)
  4. Consumer to Consumer (C2C)
  5. Consumer to Administration (C2A)
  6. Business to Administration (B2A)

Let us know about these types in detail:

1. Business to Business (B2B)

B2B can be defined as commerce/business transactions within businesses, for example, transactions amid a wholesaler and retailer or Business-to-business – “B2B” – refers to business within two companies rather than to trade among a business and a particular individual customer. Commercial activities at the wholesale level are normally business-to-business.

The money value of business-to-business transactions is notably more high-priced than business-to-consumer pursuit because companies would certainly tend to purchase higher-priced products and services and buy more of the products and services than customers would. A bike manufacturer, for instance, would initially buy a bulk of bicycle tires or a mall owner would tend to buy air conditioners or other major stuff for its mall in bulk.  Now if we sit and compare that with what a bike lover would purchase or a person who just needs the air conditioner for his home would purchase. Obviously, there will be a whole lot of contrast and that is why it is preferred by businesses.

Marketing products or services to a business is distinct from selling off products or services to a specific customer. Fundamental deals and marketing variations for business-to-business transactions incorporate:

  • Trading seldom demands to engage in a bidding process by answering to a customer’s demand for bids. On the other side of the business-to-consumer side, this correlates to examining multiple auto sellers to present their most beneficial proposal on a particular make and model type.
  • The decision-making procedure related to the investment can take a lot of time from days to weeks and sometimes months also, depending on that how the company that is purchasing products and services operates and the quantity and type of the order that has been placed or will be placed.
  • Buying products and services such conclusions are usually taken by committees, so every member of the team needs to be trained well and has to be educated enough to take such decisions.
  • The money value of goods/products or services being sold is significantly more expensive compared to that on the customer or local level, so the purchaser has to take some appropriate measures to reduce risk. Maybe be a step like demanding a product model/prototype or asking for some sort of customization.

Whereas business-to-business transactions usually include high rates and quantity, but B2B can also happen on a small scale between a smaller business that markets goods or services to a different small company. The trademark of business-to-business commerce then should be considered the members, the purchaser – two companies not only a business and a consumer.

2. Business to Consumer (B2C)

E Commerce Types Consumers

Business to Consumer means any sort of a commerce deal within a business and a particular individual and not only a business or Company trading products and services to the worldwide people, for instance, Asus company sells its computer straight to the global public by its website. In recent time, the increase in business-to-consumer online commerce has produced notable difficulties for traditional businessmen that still run the old shops and provide services and are eventually losing customers and businesses to online opponents.

And as a solution, many of the traditional businesses are now setting up their own online websites to stay in the competition. This has generated more options for customers, now they can experience the benefit of ordering online while offers are made where they can save on the shipping cost with some retailers by picking up or delivering the orders back to the online seller’s store/shop.

The online business-to-consumer sales comprise of commonly 5 business models.

  • Direct Sellers

Direct Sellers are companies that provide goods or services straight to customers. The primary factors that add to the progress of B2C e-commerce are Direct Selling activity and consumer database. There is always a boundary to the amount of data that can be delivered through brochures and catalogs but the internet is a great tool through which direct sellers are able to accommodate customers with millions of goods with complete descriptions and great visuals and reviews.

  • Online Intermediaries

Online intermediaries are those businesses that promote sales activities among consumers and retailers and earn a portion of the transaction’s amount. For example Internet Service Providers( ISP).

  • Advertising-Based
  • Community-Based
  • Fee-Based

3. Consumer to Business (C2B)

Consumer to Business is a reversed pattern of business to consumer, while in C2B the commerce activities happen among the customer and company, An example of consumer to business is Elance.com, where different individuals are allowed to put up their needs or wants on the website and within few hours businesses/companies examine the plan or project and bids are made on a project later the consumer reviews the bids and chooses the firm that made the best bid. Writing down a review for a product you were sent as the free sample is an example of the consumer to business.

4. Consumer to Consumer (C2C)

Consumer to consumer, or C2C, is a business model that takes care of the commerce transactions among separate individuals. It can be the exchange of products or services, this kind of e-commerce unites different people all over the world to do trading with each other.

 The part of the newspaper the classified one or a sale can be considered as solid instances for C2C. In both of the examples, a consumer – not a company – exchanges products or services to a different client. Letgo and OfferUp are advanced versions of c2c the popularity of these apps has grown over the years that permit the customers to trade goods with their next-door-neighbor.

The aim of a C2C is to facilitate these links, assisting customers and dealers to locate them. Consumers can make profits from the fight for goods and simply find goods that might be hard to find.

All the credit goes to the internet, larger intermediary businesses have encouraged more C2C cooperation. The most famous examples of C2C are eBay, an online sale/auction website, and of course Amazon, which serves as both B2C and C2C business model. eBay is a very successful website from the time of its launch in 1995, and since then it has been a C2C. It is easy to use because anyone from the general public can sign up and start trading products, providing an unexpected choice to customers in the e-commerce reconstruction.

5. Business to Administration (B2A)

This model of e-commerce comprises all activities carried online among companies and public administrators. This a field that includes a great amount and a number of services, especially in domains like social security/protection, financial, judicial record,  personnel, and commissioning, etc. Such sorts of services have grown considerably in the coming years with advances made in e-government.

6. Consumer to Administration (C2A)

This part of e-commerce deals with all the electronic transactions that take place over the internet between a particular person and public administrators. Some examples of C2A, that how is it being used are mentioned below:

In education: distributing info, long-distance education, etc,

Providing social protection/security: through the distribution of info, securing online payments/transactions.

Keeping track of taxes: depositing tax, refund payments, etc.

Maintaining health records: lets you make appointments with the doctor, info about your illness and payment of health services that you took, etc.

Both the models that are (C2A AND B2A) are completely linked with the concept of efficiency and simple utilization of the assistance given to the people by the government with the help of data and communication technologies being adapted.

E-commerce has transformed business models. Buying and selling products and services online allow companies to stretch out to an enormously more extended public while decreasing the expenses of conventional retailing practices. It also gives businesses with long functioning hours and less investment in human capital. E-commerce enables businesses to adequately interpret and match the requirements of consumers, by operating more intimately with the customers by handling databases, appearing in greater supply chain administrator activities and effective logistics. E-commerce has also replaced the way consumers see, choose, buy and utilize goods and services, giving them personalized touch and by skipping the ‘middle persons’ out companies provide customers with quick processing and confidential communication with the company.

Benefits And Limitations Of E Commerce

Benefits of E-Commerce

  • E-commerce gives traders a global reach. They eliminate the barrier of distance (geography). Now retailers and customers can communicate through the virtual world, excluding the obstacle of location.
  • Electronic commerce will essentially lessen the sale cost. It reduces many fixed prices in traditional businesses. This enables companies to possess a considerably greater margin of earnings.
  • It gives swift delivery of products with very minimal stress on part of the client. Consumer complaints are also attended instantly. It saves a lot of time, energy and labor for both the customers and the business.
  • One other prominent benefit is the convenience it provides. A consumer can shop anytime. The website is working at all times, unlike traditional shops that offer limited timings only.
  • Electronic commerce also provides the consumer and the company to communicate directly. without any mediators. This enables prompt conversation and transactions. It also provides an important personal feel

Limitations of E-Commerce

  • The start-up expenses of the e-commerce gateway are quite expensive. The installation and the software, the preparation expense of workers, the continuous maintenance and repair are all very costly.
  • Although it may look like a certain thing, the e-commerce business possesses a great chance of failure. Many businesses handling the dot-com revolution of the 2000s have failed badly. The high chance of crash persists even today.
  • Safety is an extra area of attention. Only lately, we have observed many security infringements where the data of the consumers was taken. Credit card fraud, identity crime, etc. persist as big anxieties among the consumers.
  • At times, e-commerce can feel cold. So it needs the feeling of an interpersonal connection which is essential for various companies and products. This absence of special touch can be a major drawback for many types of services and goods like in businesses like interior design.

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