Will e-commerce One Day Dominate The World? Its Future Trends
Electronic commerce (or eCommerce) is the sale of goods or services on the Internet. It encompasses a wide variety of data, systems, and tools for online buyers and sellers, including mobile purchases and online payment encryption.
Ecommerce Business Sizes
From small startups to the largest, eCommerce businesses can span any size. Let’s look at the four main types you can come across.
A start-up is a business or project in the early stages of development, often created by entrepreneurs who want to pursue an innovative business model.
Typically, a startup has fewer than 100 employees, but startups are often defined not by their size, but by their profitability. According to TechCrunch contributor Alex Wilhelm, a company is no longer considered a startup when it reaches $50 million in revenue or is worth more than $500 million, on paper or otherwise.
Small businesses are sole proprietorships, partnerships, or companies that sell products or services, but make less money and have fewer employees than large multinational corporations. The U.S. Small Business Administration further defines a small business based on the number of employees (between 100 and just over 1,500 workers) or average annual revenue over time (from $1 million to about $40). millions).
According to Sangoma, small and medium-sized businesses (SMEs), also known as the “middle market,” typically have between 101 and 500 employees and generate between $10 million and $1 billion in annual revenue.
Large companies typically have more than 1,000 employees and generate more than $1 billion in annual revenue.
As of the start of 2020, 45% of eCommerce software procurement activity has come from enterprise-grade companies.
Types Of Electronic Commerce
As a general rule, there are seven main models of electronic commerce in which companies can be classified:
Let’s look at each type of eCommerce in a little more detail.
1. Business to consumer (B2C).
B2C is one of the most popular sales models in the context of e-commerce. For example, when you buy shoes from an online store, you are doing a business-to-consumer e-commerce transaction.
2. Business to business (B2B).
Unlike B2C, B2B e-commerce refers to sales made between businesses, such as between a manufacturer and a wholesaler or retailer. B2B is not consumer-oriented and only occurs between companies.
3. Consumer to consumer (C2C).
One of the first forms of electronic commerce, consumer-to-consumer electronic commerce, is related to the sale of products or services between individuals.
4. Direct to consumer (D2C).
It is a newer model of electronic commerce. D2C designates companies that sell products directly to the end customer rather than through a retailer, distributor, or wholesaler.
A good example of D2C e-commerce is subscription companies such as Netflix or Dollar Shave Club.
5. Consumer to business (C2B).
C2B inverts the traditional retail model, meaning that any consumer can make their products or services available to business buyers.
An example of a C2B e-commerce business is iStock, an online store where you can buy stock photos directly from different photographers.
6. Business to Administration (B2A).
B2A covers transactions between online companies and administrations.
7. Consumer to administration (C2A).
C2A is similar to B2A, but in this case, it is the consumers who sell products or services to the administration. C2A can include consulting services for education, tax preparation, etc., all online.
Let’s look at three examples of what you can sell online:
Think of your favorite clothing brand, home decor brand, or electronics brand—these are all great examples of selling hard goods online.
Tangible goods are any material product that can be bought or sold in a brick-and-mortar store or online. Most often, these types of e-commerce businesses are of the B2C or D2C type, but even some B2B-type sellers also fall into the category of tangible goods.
Whether you have experience in online commerce or are an aspiring entrepreneur, digital products are a promising option for online sales.
The sale of services consists of offering a specialized service, such as the creation of content on your own, influencer marketing or online advice, in exchange for financial compensation.
Many service-based businesses are B2B, although some B2C companies, such as Fiverr, also offer services online.
Advantages Of Electronic Commerce
E-commerce has many different benefits, from faster checkouts to the ability to reach large target audiences on an ongoing basis.
Businesses can easily reach new customers.
E-commerce also makes it easier for businesses to reach new customers globally. An eCommerce store is not tied to a single geographic location, it is open and available to all online visitors.
With the added benefits of social media advertising, email marketing, and search engine optimization (SEO), brands have the potential to connect with huge target audiences ready to buy.
Lower operating costs.
Without the need for a physical store (or employees to run it), e-commerce retailers can open stores with minimal operating costs. And even those who have a drop shipping business can minimize the initial investment costs.
With the help of automation and rich customer profiles, you can deliver highly personalized online experiences for your eCommerce customer base.
Access to new technologies.
Your options may be limited when it comes to innovation if you only have a physical store. However, as the e-commerce ecosystem continues to mature and improve, your company will have access to the most advanced technologies with which you can streamline business processes.