Gone are the days when you needed a brick-and-mortar to have your business. It's high time walk along with the trend and have your e-commerce business which is hassle free for both - the seller and the buyer.
Electronic commerce, which is popularly known as E-commerce, is a type of business wherein selling and buying of product or service is completely done via internet. To do so, the supplier requires a website to upload his products and the buyer is supposed to visit the website to buy the product. This type of website is known as e-commerce website and this type of business is known as e-commerce business. It is also known as Online Business.
Types of E-commerce Business
There are basically four types of e-commerce business. They are:
Business to Business (B2B)
Business to Customer (B2C)
Customer to Business (C2B)
Customer to Customer (C2C)
1. B2B: It refers to business that is conducted between companies, rather than between a company and individual consumers, eg. IndiaMart.
2. B2C: It refers to the process of selling products and services directly to consumers who are the end-users of its products or services, eg. Amazon.
3. C2B: It is a business model where the end consumers create products and services which are consumed by businesses, eg. Shutterstock.
4. C2C: It means that there is no company between the trade but two individuals are selling and buying items, eg. eBay.
Payment in E-commerce
So, you have created your e-commerce website, uploaded the products and your products started getting sold out but, what now! How will you receive the payment? It being an online portal doesn’t require the direct physical interaction between seller and buyer, so how one would pay for the bought products?
Well, you need to linkup source of payment to your site for receiving the payment. This source of payment is known as Payment Gateway.
A payment gateway is an online service that authorizes and processes payments for online businesses. It is the glue between the customer and the merchant. To utilize this method, you need a payment gateway and a merchant account. To take online payments via your website, you effectively need both a payment gateway (to accept the payment details and connect to the payment networks) and a merchant account (to receive the funds). There are many payment gateway service providers to choose from like: PayPal, Instamojo, CCAvenue, Shopify, Paytm, BHIM etc.
Advantages and Disadvantages of E-commerce
As with everything other technology, e-commerce also comes with advantages and disadvantages. Let's discuss them in detail.
Advantages of e-commerce over traditional brick-and-mortar business
E-commerce provides the sellers with a global reach. They remove the barrier of physical place. Now sellers and buyers can meet in the virtual world, without the hindrance of location.
Electronic commerce substantially lowers the transaction cost. It eliminates many fixed costs of maintaining brick and mortar shops. This allows the companies to enjoy a much higher margin of profit.
It provides quick delivery of goods with very little effort on part of the customer. Customer complaints are also addressed quickly. It also saves time, energy and effort for both the consumers and the company.
One other great advantage is the convenience it offers. A customer can shop 24×7. The website is functional at all times, it does not have working hours like a shop.
With the advent of e-commerce, it has brought loads of new job profiles, like: programmer, designer, digital marketer etc. It has revolutionized the way people perceived of the job. Having your own e-commerce website gives you that shiny look which sets you apart from the brick-and-mortar owners.
Disadvantages of e-commerce
The start-up costs of the e-commerce portal are very high. The setup of the hardware and the software, the training cost of employees, the constant maintenance and upkeep are all quite expensive.
Although it may seem like a very promising venture, the e-commerce industry has a high risk of failure. Many companies, which were riding at the high success rate, failed miserably after few years in operation. The high risk of failure remains even today.
At times, e-commerce can feel impersonal. So it lacks the warmth of an interpersonal relationship which is important for many brands and products.
Security is another area of concern. Only recently, we have witnessed many security breaches where the information of the customers was stolen. Credit card theft, identity theft etc. remain big concerns with the customers.
Then there are also fulfillment problems. Even after the order is placed there can be problems with shipping, delivery, mix-ups etc. This leaves the customers unhappy and dissatisfied.
Most ecommerce businesses run solely online, which has its advantages but when you don’t have a physical storefront it can be a hurdle to acquire initial traffic or to connect with existing customers.
This has also brought the employment problem. The salesperson in the shop are losing the job. Plus, daily wage labors are also losing their bread-and-butter since they are no more required to build the new shop or repair the existing one.
However, we have to keep in mind that we cannot stop the technology from coming out. So it is best in the interest of everyone to adapt to it as quickly as possible to get the most out of it.
Examples of Ecommerce
Ecommerce can take on a variety of forms involving different transactional relationships between businesses and consumers, as well as different objects being exchanged as part of these transactions.
1. Retail: The sale of a product by a business directly to a customer without any intermediary.
2. Wholesale: The sale of products in bulk, often to a retailer that then sells them directly to consumers.
3. Dropshipping: The sale of a product, which is manufactured and shipped to the consumer by a third party.
4. Crowdfunding: The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
5. Subscription: The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
6. Physical products: Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
7. Digital products: Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
8. Services: A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.
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