Last updated: May 18, 2022 What is e-commerce? Definition, benefits, examples

What is e-commerce? Definition, benefits, examples


What is e-commerce? E-commerce is the buying and selling of goods or services via the internet, and the transfer of money and data to complete the sales. It’s also known as electronic commerce or internet commerce.

Online selling has changed tremendously since it began; the evolution and history of e-commerce is fascinating – and it’s advancing at an even quicker pace today.

Today, questions about e-commerce usually center around which channels are best to execute business online, but one of the most burning questions is the appropriate spelling of e-commerce. The truth is, there isn’t any one that’s right or wrong, and it usually comes down to preference.

Here’s a few of the variations of how e-commerce is spelled: 

  • e-commerce
  • E-commerce
  • ecommerce
  • Ecommerce
  • eCommerce
  • e commerce

(In other words, “what is e-commerce” is far easier to answer than how to spell it, so we may have to agree to disagree on the proper spelling).

Types of e-commerce and examples of how they work

As commerce continues to evolve, so do the ways that it’s conducted.

Following are the most traditional types of e-commerce models and examples of what they mean:

    1. Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to consumer means that the sale is taking place between a business and a consumer, like when you buy something from an online retailer.
    2. Business to Business (B2B): B2B e-commerce refers to a business selling a good or service to another business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business e-commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products that are combined. Manufacturers also sell directly to retailers via B2B ecommerce.
    3. Direct to Consumer (D2C): Direct to consumer e-commerce is the newest model of ecommerce, and trends within this category are continually changing. D2C means that a brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like InstaGram, Pinterest, TikTok, Facebook, SnapChat, etc. are popular platforms for direct to consumer sales.
    4. Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or service to another consumer. Consumer to consumer sales take place on platforms like eBay, Etsy, Fivver, etc.
    5. Consumer to Business (C2B): Consumer to business is when an individual sells their services or products to a business organization. C2B encompasses influencers offering exposure, photographers, consultants, freelance writers, etc..

Direct to consumer e-commerce: DTC is breaking barriers and driving BIG results in e-commerce

Direct to consumer (D2C or DTC) has seen a massive surge since the advent of the pandemic, as brands who didn’t embrace D2C e-commerce were caught scrambling to adapt.

From CPG to wholesale to automotive and more, every industry is now paying attention, hoping to better engage customers and deliver what they want.

Direct to consumer e-commerce is the newest model of ecommerce. D2C means that a brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler.

Subscriptions are a popular D2C item, and social selling via platforms like InstaGram, Pinterest, TikTok, Facebook, SnapChat, etc. are popular platforms for direct to consumer sales.

D2C Commerce Infographic representing the definition of e-commerce

DTC business models are being adopted by consumer brands that are hoping to improve their bottom lines with a direct-to-consumer (D2C) strategy, including:

  1. Direct sales
  2. D2C with redirection to the channel
  3. Marketplaces
  4. Social commerce
  5. D2C with retailer support

What is e-commerce: Examples of delivery models

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 delivery models:

  1. Retail: The sale of products directly to a consumer without an intermediary.
  2. Dropshipping: The sale of products that are manufactured and shipped to consumers via a third party.
  3. 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.
  4. Wholesale: Products sold in bulk. Wholesale products are usually sold to a retailer, who then sells the products to consumers.
  5. Services: These are skills like coaching, writing, influencer marketing, etc., that are purchased and paid for online.
  6. Subscription services: A popular D2C model, subscription services are the recurring purchases of products or services on a regular basis.
  7. 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.

Killing it: 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 (, C2C (, 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.

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What’s poppin’: The e-commerce trends that are changing how we buy, sell, and consume

The e-commerce trends that are here to stay, no matter what: 

  1. Personalization: Delivering in the moment and understanding preferences will be key to growth
  2. Service: If you’re not taking care of customers after the sale, you’re going to have fewer customers to take care of in the future – customer service must be part of modern e-commerce platforms
  3. Search: SEO and search results are where the brand and product experience start
  4. Omnichannel: Always-on, data-driven efforts will boost engagement, sales, and loyalty across all sectors and industries
  5. Purpose: Sustainability, equality, environmental, and political stances are all now part of what makes a brand appealing – or not
  6. CX: The entire customer experience must be seamless, from search to handing off between screens, to customer service
  7. Payment and delivery options: Click and collect, curbside pickup, simple payment will become the norm, not the exception in the future
  8. Direct to consumer: More and more brands are extending their go-to-market with DTC businesses
  9. Creative wins: To gain attention online, your marketing and messaging must stand out from the crowd
  10. Social commerce: By 2027, it’s projected that social commerce will drive $604 billion in sales

Benefits of e-commerce

Online commerce offers a plethora of benefits, from selling everywhere to personalized experiences that drive loyalty – and e-commerce provides a 24/7 storefront.

Image of "open" sign swaying back and forth, representing DTC marketing and e-commerce: Direct-to-consumer retailers can see massive gains in e-commerce revenue via real-time engagement.

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

    1. Convenience: Online commerce makes purchases simpler, faster, and less time-consuming, allowing for 24-hour sales, quick delivery, and easy returns.
    2. 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.
    3. Global marketplace: Customers from around the world can easily shop e-commerce sites – companies are no longer restricted by geography or physical barriers.
    4. Minimized expenses: Since brick and mortar is no longer required, digital sellers can launch online stores with minimal startup and operating costs.

E-commerce everywhere.
Fast. Personalized. Shoppable.
Start HERE.

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Jenn Vande Zande

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