E-BUSINESS

LESSON 2: E-Commerce Fundamentals

E-Commerce - also known as electronic commerce or internet commerce refers to the buying and selling
of goods or services using the internet, and the transfer of money and data to execute these
transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also
describe any kind of commercial transaction that is facilitated through the internet.

Difference between E-Commerce and E-Business

 Buying and Selling of goods through the internet is known as e-commerce. Unlike e-business,
which is an electronic presence of a business, by which all the business activities are conducted
through the internet.
 E-Commerce is a major component of e-Business.
 E-Commerce includes transactions which are related to money, but e-Business, includes
monetary as well as allied activities.
 E-commerce requires a website that can represent the business. Conversely e-Business involves
Customer Relationship Management and Enterprise Resource Planning for running business over
the internet.
 E-commerce uses the internet to connect with the rest of the world. In contrast to e-Business,
internet, intranet and extranet are used for connecting with the parties.
 e-Commerce is just the major part of e-business.
 It can also be said that e-commerce is e-business websites, but e-business is not necessarily e-
commerce.

Types of E-Commerce

 Business-to-Business (B2B)
o All electronic transactions of goods or services conducted between companies.
o Producers and traditional commerce wholesalers typically operate with this type of
electronic commerce.
o Transactions between one business to another
 Business-to-Consumer (B2C)
o The Business-to-Consumer type of e-commerce is distinguished by the establishment of
electronic business relationships between businesses and final consumers.
o It corresponds to the retail section of e-commerce, where traditional retail trade
normally operates.
 Consumer-to-Consumer (C2C)
o Type e-commerce encompasses all electronic transactions of goods or services
conducted between consumers.
o Generally, these transactions are conducted through a third party, which provides the
online platform where the transactions are actually carried out.
 Consumer-to-Business (C2B)
o Type of commerce where a consumer or end user provides a product or service to an
organization.
o It is a reverse of the B2C model, where businesses produce products and services
for consumer consumption.
o A large number of individuals make their services or products available for purchase for
companies seeking precisely these types of services or products.
 Business-to-Administration
o This part of e-commerce encompasses all transactions conducted online between
companies and public administration.
 o This is an area that involves a large amount and a variety of services, particularly in areas
such as fiscal, social security, employment, legal documents and registers, etc.
 Consumer-to-Administration
o It encompasses all electronic transactions conducted between individuals and public
administration.

Drivers of Consumer Internet Adoption

1. Content
2. Customization
3. Community
4. Choice
5. Convenience
6. Cost Reduction

Barriers to Consumer Internet Adoption

1. No perceived benefit
2. Lack of trust
3. Security problems
4. Lack of skills
5. Cost

E-Commerce Models

 Revenue Model
o Revenue models have mainly been based upon income from sales of products or
services
o Revenue models can be for selling direct from the manufacturer or through an
intermediary that will take a cut of the selling price.
 Online Publisher and Intermediary Revenue Models
o A publisher’s way to generate revenue based around advertising and fees for usage of
online services from:
 Advertising and collecting fees per view, known as Click per Mille (Thousand)
also known as CPM
 Cost Per Click ad revenue, where ads pay the website per click of their
advertisement.
 Sponsorship of site sections or content types, where a website pays a fixed
amount to be advertised by another website, for a fixed amount of time
 Affiliate revenue, or Cost per Acquisition, where the website advertising a
product or service will get paid when said product or service was bought,
earning them a percentage of the price.