What does E-commerce business mean? Types, Advantages, and Disadvantages

before we get into the topic “e-commerce business” we must first know how the history of commerce has developed. because that question gives us knowledge about how technology, in general, has grown up in our generation.

The History Of E-commerce business

Commerce has developed over the last century from simple shops to shopping malls, online, and now mobile applications.

This evolution is being driven by new technology and business models, which offer better and quicker methods of doing business while also introducing new risks and obstacles.

People are already purchasing and selling goods and services on mobile phones and in other new directions, ushering in a new period of commerce. New technology and business concepts have fueled the continuous evolution of trade.

Caravan traders were the earliest merchants. They would set up shop in a city, trade with the locals, and then go. Commerce did not become a permanent presence in cities until the development of the credit card.

Amazon, an online seller that has permanently transformed the retail landscape, is now the world’s largest retailer.

The current Internet was initially utilized to facilitate telephone business. Gary Kildall, an inventor of Digital Equipment Corporation, was the first to install a computer with a modem in his house in 1964. He used it to send texts-, which was a service at the time. The Internet was mostly utilized for study and education in the years that followed.

The Old Bazaar in Turkey was the world’s first retail mall. It was constructed in the 13th century and quickly became a hub for traders, merchants, buyers, and sellers of products and services.

Merchants would put up stalls in the Old Bazaar to sell their wares to the public throughout the Middle Ages. The Old Bazaar was also a location to promote and show things for sale.

Dr. Robert Jacobson, the Principal Consultant to the California State Assembly’s Utilities & Commerce Committee, invented and first used the word “online shopping” in the title and language of California’s Electronic Commerce Act, sponsored by the late Committee Chairwoman Gwen Moore and adopted in 1984.

E-commerce often uses the web for at least a portion of a transaction’s life cycle, while other technologies such as e-mail may also be used.

The purchase of goods or services is a common e-commerce transaction. E-commerce is divided into three categories: online retailing, electronic markets, and online marketplaces.

The electronic business helps to boost e-commerce. The fundamental value of e-commerce is to allow consumers to purchase online and pay online over the Internet, saving customers’ and companies’ time and space, considerably enhancing transaction efficiency, particularly for busy office employees, but also saving a lot of important time.

Shopping online is becoming common practice for millions of individuals all around the world.

What is e-commerce business mean?

The world of electronic commerce has witnessed wide growth in the last two decades, and this growth has increased more and more during times of quarantine and social distancing.

There is no doubt that this wide spread of e-commerce platforms around the world will bring about changes in the behavior of the buyers on these sites.

 The first major step in the evolution of e-commerce business was the introduction of the world’s first shopping mall, which allowed people to shop without leaving their homes.

The introduction of the Internet and the Web changes the way that commerce works forever. The Internet and the Web have given businesses the ability to reach more people, faster, at a lower cost, and with less effort.

It has also allowed businesses to build online stores, which has been a major driver of e-commerce, as it has enabled businesses to reach customers where they are and make it easier for them to buy.

 Some of the key drivers of this evolution are the rise of e-commerce business, the shift to mobile shopping, and the shift to digital payments. 

The latest statistics talk about the arrival of the number of customers via the Internet to about 2 billion people around the world, and the current e-commerce through smartphones accounts for 72% of the total e-commerce globally. learn more 

 Today, we’re seeing a new era of commerce where people are buying and selling goods and services on their phones and in other new ways. This constant evolution of commerce has been driven by new technologies and business models.

What is the difference between online stores and marketplace?

Unlike online storefronts, many companies use the marketplace as their main interface. That is, the items on offer are not from the same firm, but are simply shown on the same platform.

The marketplace serves as a payment mechanism but is not liable for the product’s guarantee or delivery.

This strategy works well for many businesses because you don’t need to acquire a domain or pay other expenditures associated with e-commerce setup; simply enter the items into the chosen platform and advertise them.

Another advantage of selling on a marketplace is that you can utilize the company’s market strength to attract buyers, which is much easier than having people find your e-commerce shop.

If someone is looking for shoes, he will be able to locate them on Marketplace if he searches instead of going to your store.

E-commerce business

In contrast, you do not have control over how your product is displayed to purchasers.

The market may be the best option for those who trade in general products because it allows you to avoid competition and establish your own domain, whereas e-commerce has some advantages for those who have a product that belongs to a specific market segment and want to reach a more specialized audience.

Types of e-commerce business

When the phrase e-commerce is used, most people think of the most prevalent sort of e-commerce, the so-called B2C system, activity, and business that targets individual clients.

It has become common for a website to integrate an electronic payment mechanism so that customers may buy and pay from the exact location.

Now that we’ve covered the basics, let’s get started with the following question: What are the most common types of e-commerce?

In actuality, there are six major categories of e-commerce business, as follows:

  1. Business-to-Business (B2B)
  2. Business-to-Consumer (B2C)
  3. Consumer-to-Consumer (C2C)
  4. Consumer-to-Business (C2B)
  5. Business-to-Administration (B2A)
  6. Consumer-to-Administration (C2A)

B2B e-commerce

E-commerce in this situation is between two commercial firms, and the business connection is typically long-term and not restricted to the purchase of a single product, as in the case of e-marketing agencies.

B2C e-commerce

Business-to-Consumer, in which e-commerce interactions are formed between firms and customers since this kind is quite similar to conventional commerce’s retail sector. 

This form of a business partnership is simpler and more dynamic, but it can also be discontinuous. 

It is important to note that e-commerce between firms and customers has grown dramatically in recent years. 

On the Internet nowadays, there are several electronic businesses and virtual malls that offer various sorts of consumer items such as electronic and digital equipment, clothing, shoes, and even food.

C2C e-commerce

All electronic transactions of products or services between customers occur in this sort of e-commerce. When these transactions are carried out via a third party that offers a platform or system that allows customers to complete these purchases.

C2B e-commerce

This sort of e-commerce business is especially prevalent in social outsourcing initiatives; a significant number of individuals offer their services and products for sale to organizations that are explicitly searching for these types of services and items.

We come across websites where graphic designers sell their services to design the logo of a large corporation, for example, and the corporation then picks only one design and purchases it.

Websites that sell royalty-free photos, music clips, and other design components, for example.

B2A e-commerce

This category of e-commerce comprises all transactions that take place via the Internet between various businesses and government administrative organizations. 

This subject encompasses a wide range of services such as tax services, social security services, and legal records, among others. The availability of these services has grown in recent years, owing to huge investments in creating and building e-governments.

C2A e-commerce

Where this form of e-commerce is concerned, all electronic transactions between individuals and government agencies, such as:

  • Education.
  • Social security.
  • Taxes.
  • Paying for health care services.

Advantages and disadvantages of e-commerce business

The internet has changed the way people purchase practically everything. It has made it easier to make purchases and keep track of everything we buy, from toothpaste to apparel to vehicles.

It has also made it easy to compare prices and things, whether they are online or in shops, but it has drawbacks. So, what are the advantages and disadvantages of e-commerce?

What are the advantages of e-commerce?

E-commerce has provided a host of advantages that have made traditional commerce an incapable method of delivering greater benefit to businesses and customers.

However, there are 8 basic advantages that e-commerce has that surpass traditional commerce.

  • Ease of building an online store.
  • Low financial cost.
  • Processing more requests.
  • 24/7 continuous income.
  • Easy to view best-selling products. 
  • More leads.
  • Multiple payment methods.
  • Easy retargeting or remarketing for the customer.

1. Ease of building an online store

A classic shop takes a significant amount of labor and time, in addition to the high material costs connected with construction. In comparison, developing an online store is far easier than developing a traditional store, since you can build an online store using one of the ready-made e-commerce platforms.

You can also modify the way items are displayed since the shop management team can simply modify product features like photographs, descriptions, and pricing without having to go through laborious procedures like printing new photos or creating a new design.

2. Low financial cost

One of the benefits of e-commerce is the low startup cost, as traditional retail stores must pay thousands of dollars to rent one of their store locations, and there are also many initial costs such as store signage, store design, inventory purchase, and sales equipment, not to mention the store owner must hire employees to work and operate each site and may also need to hire security staff depending on the value of the product in the store.

Startup charges for an online store are determined based on the sort of e-commerce firm you run; you may only need to hire personnel after you reach a particular level.

Because your online business is connected to the internet, these individuals may work remotely, making it easier for your firm to locate suitable staff.

Overall, your business expenditures are substantially reduced, which is one of the most appealing benefits to new businesses.

3. Processing more requests

One of the key benefits of e-commerce is the ability to process purchase orders online, which speeds up the process of generating each order.

Processing orders in traditional commerce takes longer than processing orders electronically because computers can process hundreds of orders per minute while employees can only process a few dozen orders per day at most.

4. 24/7 continuous income

Another benefit of e-commerce is that, unlike traditional stores, which have set operating hours, e-stores are always open.

By running advertisements for your business on Facebook or Google, you can draw in new clients from anywhere in the globe at any time.

By having the online store available 24/7, you will surely draw customers who are unable to visit physical stores during normal business hours and who would otherwise spend a lot of time looking for the desired item.

5. Easy to view best-selling products

Owners of online stores may showcase their products to clients using this function. The best-selling products are easy to find in an online store because other customers have already purchased and used them and have expressed their admiration for them, unlike traditional retailers who may have to spend a lot of time and money designing how their products are displayed in order to draw customers.

6. More leads

You may get over geographical limitations and expand your firm internationally through e-commerce business.

Customers may be found anywhere on the planet or in nearby nations, and you can easily deliver your services to them without having to be in the same location as them.

7. Multiple payment methods

Multiple payment methods

E-commerce offers a variety of electronic payment options, giving clients freedom in how they make purchases. According to the payment tools the client has and the payment ways the shop accepts, the customer can use more than one payment method at once.

This added flexibility expands the capabilities of e-commerce and makes them easier to use.

Bank cards, bank transfers, e-wallets, and mobile payments are some of these options.

8. Easy retargeting or remarketing for the customer

The ability to quickly access, examine, and retarget your consumers’ data is one of the most significant advantages of e-commerce.

When making purchases online, many customers have no problem giving their email, address, or even some personal information about themselves.

You will surely be able to provide better customer service, establish deeper relationships with them, and even tailor the way your products are advertised depending on their requirements and preferences by evaluating this data.

What are the Disadvantages of e-commerce business?

As in any business, having e-commerce also has its own disadvantages, especially when we talk about physical products. It’s important to weigh everything to make sure if the field is worth the investment.

Here are some of the most important problems that people face in the field of e-commerce, whether customers or even the owners of e-commerce business.

  • High Competition.
  • Customers can’t try products. 
  • Customer assistance is limited.
  • Security Issues.

1. High Competition

One of the first things you should consider before spending money to set up an online store is the competition. You can do this by asking a series of questions and finding the answers to them, such as: What type of items would you like to offer? Can you provide better products?

You want to develop your unique e-commerce style, but thousands of other people have shared the same thought.

To separate out from the competition and provide customers with solutions that are genuinely exceptional, properly investigate your industry.

2. Customers can’t try products 

The inability of customers to touch and feel a product persists, regardless of how effectively a video is produced. the best way to convey information is through senses like touch, smell, taste, and sound, which are frequently used.

3. Customer assistance is limited

Online businesses may not have customer care agents who can address your difficulties, which is one of the major drawbacks of e-commerce.

Therefore, consumers may find it challenging to resolve product-related issues or receive answers to their concerns, unlike traditional retailers that hire a workforce to assist market their items and address related issues.

4. Security Issues

Many businesses and organizations have been victimized by hackers who stole client information from their databases. This can have legal and financial consequences, as well as erode customer faith in the organization.


If you want to start an e-commerce business, you should realize that in order to stand out from the crowd, you must do things differently than normal and consistently research the industry in order to deliver a high-value service or product to your target audience.

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