E-commerce, also known as electronic or internet commerce, is a model that consists in distribution, sale, purchase of goods and services through the Internet.
The foundation of online shopping was set in 1979 by Michael Aldrich. However it was not until the mid-1990s and early 2000s, when people started introducing computers into their homes, that the growth started to get paved.
By 2021, it’s estimated that global ecommerce sales will reach $4.8 trillion, which makes e-commerce a growing and profitable industry to be in.
Benefits of e-commerce
The boom of e-commerce in the last decade clearly exhibits the benefits it offers.
- Convenience: The shopping process becomes shorter, because for a consumer buying online means saving time. It is easier to compare and decide, allowing the purchase and receipt of the chosen product within 24 hours.
- Global marketplace: Physical and geographical barriers are no longer a problem for business growth. Being online means everyone has access to shopping on e-commerce webs.
- Customer experience: Online marketplaces improve customer satisfaction, increasing at the same time the brand loyalty. How? User profiles are created more accurately and contain more enriched information. That allows to offer what the buyer is looking for.
Types of e-commerce
- Business to Consumer (B2C): One of the most popular e-commerce out there. This model is based on selling products from a business directly to the consumer, like any online retailer.
- Business to Business (B2B): This type isn’t consumer-facing, as it consists of a business selling to another one. Usually, this e-commerce involves raw materials, software or products combined.
- Consumer to Consumer (C2C): Example of this model is eBay, Vinted or any other similar platforms, where the ones selling aren’t businesses but average consumers selling to others. The products tend to be owned by the same customers whether second-hand or new.
- Direct to Consumer (D2C): Newest model between the e-commerce types. D2C is brands selling directly to the end consumer without going through a distributor or retailer.
Common e-commerce websites
There are many kinds of websites, however let’s analyse the most common ones:
Physical Goods: Selling to a broader audience is what retailers with physical shops seek to achieve. By appealing to this strategy they can increase sales without having to raise shops.
Digital Products: Have you ever wondered how video games or software developers merche their products? By keeping the business simply on the e-commerce platform, driving down costs making it even profitable.
Dropshipping : Holding no inventory but still selling is, basically, the idea behind dropshipping. Merchants find suppliers to sell from, find customers interested in those products, and the suppliers fulfill the order for them.