Online shopping has risen exponentially, especially during the pandemic when people are more inclined towards placing an order online from the comfort of their home. With that, e-commerce and e-business have become the two most important business modes for online sellers. While these two might seem indistinguishable to some, and others may use them interchangeably, understanding the difference between them would help you in designing just the right kind of online business model. So, let’s dive in to discover the difference between e-commerce and e-business by starting with the basics.
What is E-commerce?
E-commerce stands for the abbreviation that is used for Electronic Commerce. Simply put, it is the buying and selling of products and services over the internet. This online transaction may also include dealing, ordering, and paying for the goods. We may even say that any sale conducted through the help of the internet can be considered to fall under e-commerce.
The process does not involve face-to-face interaction between the buyer and seller. Buying, paying, and getting the product delivered are the three basic elements involved in every e-commerce sale. But, it isn’t mandatory for all three elements to be involved in the process. One may order the product online using the internet and then choose to pick it up from the store and pay cash on delivery rather than carrying out online payment. As you see, if not all three, at least one element is a part of the process.
A website is a basic requirement for e-commerce. Brick-and-mortar retailers can get a well-designed website to drive up their online sales. An increasing number of individual sellers are also opting for virtual marketplaces to sell their goods and services.
A wide range of business models can be accommodated by e-commerce. Below are the different e-commerce types:
- Business to Consumer (B2C) – It is the e-commerce business model wherein the products are sold by businesses to customers over the internet. The best example of this model would be when a single consumer purchases a laptop online.
- Business to Business (B2B) – When the online transaction of goods and services takes place between two or more businesses, it is called the B2B e-commerce model. An online business selling antivirus software to other businesses for protecting their systems is the right example.
- Consumer to Consumer (C2C) – When a single customer sells products to other consumers through a third-party website, the commercial online transaction falls under C2C e-commerce. The transactions taking place on Olx or eBay are ideal examples.
- Consumer to Business (C2B) – When an individual consumer makes an online sale of goods and services to a business, the business model is of C2B type. A customer offering his skills for promoting the product of a business at a set fee can be considered as an example.
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What is E-business?
Compared to e-commerce, the e-business model might come across to be a little more complex to grasp. It stands for Electronic Business and is the model that facilitates business to others with the use of the internet or electronic data interchange. This model helps establish the online presence of a business which has become highly important in today’s date.
In case you are wondering if there is any relationship between e-commerce and e-business, then e-commerce can be considered to be a part of e-business but it need not be its essential component. Unlike e-commerce, e-business isn’t just about buying and selling products online. Several other activities and business operations carried out using electronic media form a part of e-business.
Take a look at the two different types of e-business mentioned below.
- Brick and Click – A brick and click e-business model is one where a business conducts sales online as well as offline. In such a case, the business has established a presence on the web through electronic data interchange and also has a presence through brick-and-mortar stores or offices.
- Pure Play – When a business invests all its resources into selling only one line of business, it is following the pure play e-business model. The best example would be of a company that sells only customized jerseys and no other products, be it online or offline.
Following are examples that will help understand e-business better.
- An HR management tool that streamlines a company’s operations like onboarding process and maintaining employee data is a great example of e-business.
- Email marketing is also an e-business activity as the process is carried out electronically and not manually.
- An online software that tracks a website visitors journey is an e-business.
Simply put, any business process conducted electronically is an e-business activity.
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E-commerce Vs E-business
Now that we have a clear understanding of what is e-commerce and e-business, let us discover the key differences between the two business models.
- E-commerce is a business model that facilitates online buying and selling of products. When an online transaction takes place it is e-commerce. On the other hand any business using online technologies in the business model is e-business. If a company is using the web for simply marketing their products online and pull more customers to their brick-and-mortar store then it is an e-business. An online transaction need not necessarily take place here.
- As mentioned earlier, e-commerce is an important component of e-business but it isn’t a requisite. Online buying and selling of goods and services need not take place for a business model to be e-business.
- E-commerce uses the internet for carrying out online transactions. In this business model, activities take place through the use of the internet. An e-business, however, uses the internet, intranet, extranet, or any other online technology to carry out its activities.
- The only requirement of e-commerce is a website through which a consumer can purchase products. An e-business, on the other hand, requires a website, enterprise resource planning tool, and customer managing technology to run a business over the web.
- E-commerce is an extrovert business model that is inclusive of distributors, sellers, and customers. On the contrary, e-business is an ambivert business model that is inclusive of external as well as internal business operations.
An e-commerce website can be considered an e-business website, but an e-business isn’t necessarily e-commerce. Today, most of the businesses follow the e-business model by using online tech. A small-scale business using biometrics to mark attendance of its employees would also fall under e-business. In the last few there has been an exponential rise in the emergence of e-commerce websites like Amazon, eBay, Alibaba, etc. Dependin g upon what you wish to have for your business, you can choose one of the two or even both the business models.
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