E-commerce, or electronic commerce, refers to transactions conducted via the web. whenever individuals and corporations are buying or selling products and services online they’re engaging in e-commerce. The term eCommerce also encompasses other activities including online auctions, internet banking, payment gateways, and online ticketing.
Now, a touch little bit of history first.
How e-commerce came to be
The first e-Commerce transaction was made in 1994. a man named Phil Brandenberger used his Mastercard to shop for Sting’s Ten Summoners’ Tales via the web for $12.48. This particular transaction made history and signaled to the planet that the “internet is open” for e-commerce transactions. Why? Because it had been the primary time that encryption technology was wont to enable an online purchase.
Needless to mention , e-Commerce has grown by leaps and bounds ever since. the increase of e-commerce giants like Amazon and Alibaba within the mid -1990s changed the face of the retail industry. They largely capitalized on the worldwide internet penetration and digitalization of the economic system which contributed to the decline in sales for several brick-and-mortar businesses.
The growth of e-commerce has also shifted the retail workforce. The U.S Bureau of Labour Statistics (BLS) has revealed that from 1997 to 2016, employment within the e-commerce sector increased by 80%. BLS is additionally predicting that the amount of e-commerce jobs will keep it up growing and reach 450,000 within the US by 2026.
Taking this under consideration , it’s clear that the highly competitive nature of ecommerce will keep it up changing the retail industry and influence customers’ behaviour. Starting a web business nowadays looks like a beautiful idea for several savvy entrepreneurs, but before anyone dives into this dynamic business , they first got to learn the ropes of the ecommerce industry.
And that’s exactly what this guide is for.
In this resource, we’ll take a deep check out the e-commerce industry — how it happened , what sorts of merchants exist, and what platforms allow online selling. We’ll also shed light on notable e-commerce success stories and flops to offer you a far better idea of what it takes to achieve this industry.
Whether you’re someone who wants to start out an e-commerce site or you’re already running a web store and just want to find out more about the industry, you’ll find many nuggets in our guide.
Types of e-commerce businesses
There are some ways to classify e-commerce websites. you’ll categorize them consistent with the products or services that they sell, the parties that they transact with, or maybe the platforms on which they operate.
In this guide, we’ll check out all three aspects to offer you a transparent picture of the kinds of e-commerce sites out there.
Classifying e-commerce businesses consistent with what they sell
Let’s start with the products and services typically sold online. Below may be a list of e-commerce merchants consistent with what they sell.
1. Stores that sell physical goods
These are your typical online retailers. Clothing, furniture, tools, and accessories are all samples of physical goods. Shoppers can purchase physical goods through online stores by visiting the stores’ websites, adding items in their handcart , and making a sale .
Once the consumer has made a sale , the shop delivers the item(s) right at their doorstep. There also are online stores where customers can make a web purchase but attend the shop themselves to select up the products.
Bonobos’ landing page.
Some samples of these e-commerce stores include eyewear retailer Warby Parker, menswear store Bonobos, and shoe retailer Zappos.
2. Service-based e-tailers
Aside from products, services also can be purchased online. whenever you hire educators, freelancers, and consultants through online platforms, you’re doing business with service-based e-tailers.
Fiver’s landing page.
The buying process for services depends on the merchant. Some may allow you to get their services straightaway from their website or platform. An example of this comes from Fiverr.com, a contract marketplace. people that want to shop for services from Fiverr must place an order on the web site before the vendor delivers their services.
Blue Fountain Media’s landing page.
Some service providers, on the opposite hand, require you to urge in-tuned with them first (i.e. book a consultation) to work out your needs. for instance , Blue Fountain Media, a corporation that makes digital strategies for giant businesses, asks clients to contact them by filling in a web form first where they ought to describe their business needs.
3. Digital products
Ecommerce transactions are conducted via the web which is why, within the e-commerce realm, products are usually mentioned as “e-goods”. The term digital products ask all items that are during a digital format including ebooks, online courses, software, graphics, and virtual goods.
Examples of retailers that sell digital products are Coursera (a platform for online learning) and Audiobooks (a website where you’ll buy audiobooks).
Classifying e-commerce consistent with the parties involved
Looking at the parties participating within the transaction is differently during which e-commerce sites are often classified. These typically include:
1. Business to consumer (B2C)
As the name suggests, the B2C e-Commerce model represents a transaction between businesses and individuals. B2C e-commerce is that the commonest business model among both physical and online retailers.
Nike, Macy’s, IKEA, and Netflix are all samples of companies that engage in B2C e-commerce.
2. Business to business (B2B)
In the B2B e-commerce model, both parties involved are businesses. during this sort of transaction, one business provides the opposite with products and/or services.
Slack, a platform for communication between remote businesses, and Xero, cloud-based accounting software for businesses, are samples of B2B companies.
3. Consumer to business (C2B)
The C2B business model represents a transaction during which individuals create value for businesses, unlike the normal business-to-consumer model where companies are those that deliver value. Consumers provide companies with products and/or services, co-operate on projects, and ultimately help businesses increase their profits.
Freelancer, a contract platform that connects remote workers and corporations , is an example of a corporation that brings two parties to interact in C2B transactions.
Freelancer’s landing page.
4. Consumer to consumer (C2C)
C2C e-commerce happens when the 2 parties involved are consumers that trade with each other . eBay and Craigslist are samples of online marketplaces where individuals buy and sell products to every other.
5. Government to Business (G2B)
G2B e-commerce models happen when the govt provides companies with goods and services. Government procurement, data centers, and e-learning are all samples of G2B e-commerce.
6. Business to Government (B2G)
The B2G model refers to companies and businesses that provide goods and services for the govt . for instance , OpenGov may be a company that gives governments cloud-based platforms for communication, reporting, and budgeting.
OpenGov’s landing page.
7. Consumer to the govt (C2G)
Every time consumers pay taxes, insurance , electronic bills, or request information concerning the general public sector, they’re engaging in C2G.
Make note that we’ve included of these sections to offer you a general idea of e-commerce classification, although models like G2C or C2G are a part of e-commerce only in its loosest definition. 80% of the time, when we’re talking about e-commerce, we’re talking about the B2C or the B2B model.
What are the most important online marketplaces?
Online marketplaces are platforms that facilitate e commerce transactions between buyers and sellers, enabling buyers to showcase their products and reach a bigger audience. These platforms are popular among customers due to their big choice of products and services from different sellers and providers all round the globe.
Let’s dive into the simplest online marketplaces on the web:
Here are some Amazon facts:
Statistics show that Amazon is that the largest ecommerce seller within the us with $280.5 billion income made in 2019.
The ecommerce giant has around 101 million US based Amazon prime members which on the average spend $1,400 a year on online purchases.
A company that needs no introduction, Amazon is one among the most important online marketplace within the world. It offers customers a good selection of products from retailers round the globe and enables businesses to succeed in an outsized audience.
Best for: Big businesses that want to expand their sales channels.
Amazon’s landing page.
Here are some eBay facts:
eBay features a total number of 1.4 billion live listings.
eBay had around 182 million active users in 2019.
Connecting retailers and customers from all round the globe, eBay is a web marketplace which will help small and medium sized businesses establish a world customer base. eBay is user-friendly, intuitive, and offers variety of payment options. One thing that particularly distinguishes eBay from other online marketplaces is that it allows merchants to carry online auctions.
Best for: Established brands selling unique items looking to expand their audience pool.
Ebay’s landing page.
Here are some Etsy facts:
Etsy had 2.5 million sellers and 45.7 active online buyers in 2019.
Etsy had 60 million items listed purchasable in 2019.
Etsy is that the perfect platform for creatives trying to find a web marketplace to showcase their unique and handmade products. It’s particularly popular among independent creatives and other people looking to shop for one-of-a-kind, exclusive, and rare items.
Best for: Small businesses selling handmade and vintage items.
Etsy’s landing page.
Here are some Alibaba facts:
Around 960 million people made a sale on Alibaba in 2019.
Alibaba recorded a revenue of $54.5 billion in 2019.
Alibababa is one among the most important online marketplaces within the world. The platform is especially effective for reaching big manufacturers and buying products in bulk. Alibaba dominated the Chinese market in 2019, with an estimated number of 960 million active customers.
Best for: Big and established brands looking to expand and reach a worldwide audience.
AliBaba’s landing page.
Here are some Fiverr facts:
Fiverr recorded a mean number of fifty million transactions per month in 2019.
Fiverr reached a revenue of $27.9 million within the third quarter of 2019.
Unlike the opposite marketplaces listed above, Fiverr offers freelance services. This platform connects businesses with remote workers that concentrate on all types of services including digital marketing, video editing, programming, and graphic design. Joining Fiverr is free for freelancers and therefore the costs for hiring a foreign worker for a specific job start at $5 USD.
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