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What Is Electronic Commerce (Ecommerce)?

The term electronic commerce (ecommerce) refers to a business model that allows companies and individuals to buy and sell goods and services over the Internet. Ecommerce operates in four major market segments and can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every imaginable product and service is available through ecommerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology.


What Is an Ecommerce Website?

An ecommerce website is any site that allows you to buy and sell products and services online. Companies like Amazon and Alibaba are examples of ecommerce websites.


What Is the Difference Between Ecommerce and Ebusiness?

Ecommerce involves the purchase and sale of goods and services online and is actually just one part of an ebusiness. An ebusiness involves the entire process of running a company online. Put simply, it's all of the activity that takes place with an online business.

Understanding Ecommerce

As noted above, ecommerce is the process of buying and selling tangible products and services online. It involves more than one party along with the exchange of data or currency to process a transaction. It is part of the greater industry that is known as electronic business (ebusiness), which involves all of the processes required to run a company online.

Ecommerce has helped businesses (especially those with a narrow reach like small businesses) gain access to and establish a wider market presence by providing cheaper and more efficient distribution channels for their products or services. Target (TGT) supplemented its brick-and-mortar presence with an online store that allows customers to purchase everything from clothes and coffeemakers to toothpaste and action figures right from their homes.

Ecommerce operates in all four of the following major market segments. These are:

  • Business to business (B2B), which is the direct sale of goods and services between businesses
  • Business to consumer (B2C), which involves sales between businesses and their customers
  • Consumer to consumer, which allows individuals to sell to one another, usually through a third-party site like eBay
  • Consumer to business, which lets individuals sell to businesses, such as an artist selling or licensing their artwork for use by a corporation1
  • Providing goods and services isn't as easy as it may seem. It requires a lot of research about the products and services you wish to sell, the market, audience, competition, as well as expected business costs.

Once that's determined, you need to come up with a name and set up a legal structure, such as a corporation. Next, set up an ecommerce site with a payment gateway. For instance, a small business owner who runs a dress shop can set up a website promoting their clothing and other related products online and allow customers to make payments with a credit card or through a payment processing service, such as PayPal.

What is e-commerce: Examples 

Everyone from independent freelancers to small businesses to the largest of corporations can benefit from the ability to sell their goods and services online at scale.

Here are some examples of types of e-commerce:

  • Retail: The sale of products directly to a consumer without an intermediary.
  • Dropshipping: The sale of products that are manufactured and shipped to consumers via a third party.
  • Digital products: Downloadable items like templates, courses, e-books, software, or media that must be purchased for use. Whether it’s the purchase of software, tools, cloud-based products or digital assets, these represent a large percentage of ecommerce transactions.
  • Wholesale: Products sold in bulk. Wholesale products are usually sold to a retailer, who then sells the products to consumers.
  • Services: These are skills like coaching, writing, influencer marketing, etc., that are purchased and paid for online.
  • Subscription: A popular D2C model, subscription services are the recurring purchases of products or services on a regular basis.
  • Crowdfunding: Crowdfunding allows sellers to raise startup capital in order to bring their product to the market. Once enough consumers have purchased the item, it’s then created and shipped.

Successful e-comm sites

E-commerce accounts for trillions of dollars in sales every year.

Today it’s almost inconceivable that a company wouldn’t be using a digital space to drive sales and bottom lines.

Here are some of the top e-commerce companies:

  • Alibaba: Launching in 1999, The Chinese company Alibaba is by far the world’s most successful e-commerce company and retailer, hosting the largest B2B (Alibaba.com), C2C (Taobao.com), and B2C (Tmall) marketplaces across the globe. Their online profits have surpassed all US retailers – including Walmart and Amazon – combined since 2015.
  • Amazon: Amazon is the largest e-commerce retailer in the United States, and has changed the face of retail so much that a burning question for most retailers is how to beat Amazon.
  • Walmart: Once the top retailer in the US, Walmart has focused mightily upon their online business, with great results, offering traditional retail sales, as well as grocery delivery and subscription services.
  • eBay: One of the first e-commerce sites, eBay still dominates the digital market space, allowing for businesses and individuals to sell their products online.
  • Wayfair: This home furnishing e-tailer is a drop-shipper, carrying hardly any inventory. They manage suppliers, orders, and fulfillment, and credit their success on personalization – meaning they study how their customers engage and offer up products they believe consumers most want.

Benefits of e-commerce

Let’s look at some of the biggest benefits of e-commerce:

  • Convenience: Online commerce makes purchases simpler, faster, and less time-consuming, allowing for 24-hour sales, quick delivery, and easy returns.
  • Personalization and customer experience: E-commerce marketplaces can create rich user profiles that allow them to personalize the products offered and make suggestions for other products that they might find interesting. This improves the customer experience by making shoppers feel understood on a personal level, increasing the odds of brand loyalty.
  • Global marketplace: Customers from around the world can easily shop e-commerce sites – companies are no longer restricted by geography or physical barriers.
  • Minimized expenses: Since brick and mortar is no longer required, digital sellers can launch online stores with minimal startup and operating costs.

If you use an external eCommerce solution

If you have an online shop/eCommerce platform, you can synchronize it with Dolibarr ERP and CRM by using external synchronisation modules. You may find external modules developed by third parties on www.dolistore.com for most major Open Source E-Commerce solutions.

Most eCommerce solutions are fully or partially supported, such as Prestashop, Magento, OsCommerce, Woocommerce, OpenCart, etc.