We all know that our whole lives are online today. Everything goes through the Internet, and it’s no wonder that there are so many ecommerce and ebusiness websites blooming every day. However, a lot of people mix those two terms or believe that they are synonyms. Although they go hand-in-hand, there is a distinct difference. So, what are the differences between ecommerce and ebusiness?
Ebusiness is a term that is used to etiquette all business conducted online (via the Internet). On the other hand, ecommerce strictly refers to buying and selling goods or services online. Every ecommerce is also an ebusiness, but not vice-versa.
It’s important to get introduced to both terms properly before venturing into an online business, so here’s everything you need to know about ecommerce, ebusiness and what the most significant differences between the two are.
What is eCommerce?
Ecommerce is a subcategory of ebusiness defined as all transactions conducted online. To put it differently, ecommerce businesses sell goods or services to buyers. It can be clothes, classes, or any other type of online shop.
Today’s market requires you to be available at all times. It’s nearly impossible to keep a physical shop open 24/7, but an online store allows you to be available for potential clients anytime, anyplace. More and more businesses realized the advantages of ecommerce recently, especially during the recent global pandemic.
The pandemic forced businesses to close their doors to customers in person, so they had to find a way to keep their business going without having an in-person interaction with customers. Enter, ecommerce. You open an online store and keep working, and to add to it; you’re available at all times.
That’s why global ecommerce revenue last year rose by a staggering 27%, which is incredible when you know that the entire world’s economy suffered from the lockdowns, etc. Many types of ecommerce formed, and it’s coming to a point where, if you don’t have a website for your business, it’s as good as not existing at all. Here’s what the main types of ecommerce are.
Most popular types of ecommerce business
Several models of ecommerce are the frontrunners when it comes to the number of businesses using it. Each model is based on the relationship between the buyer and the seller.
1. Business to consumer
Business to Consumer businesses is the most common kind of ecommerce models. B2C means that a business is selling goods or services to a consumer, a physical person. For instance, when you’re browsing a store, buying t-shirts that’ll be delivered to your address, you’re using a B2C ecommerce business to do it.
Most businesses aim at the end-client, or the consumer, to sell their goods. It usually works through a third party, but more and more companies adopt a newer model, where there are no third parties between the manufacturer and the consumers.
2. Direct to consumer
Direct to Customer model gained a lot of traction as selling services on social media became more popular. D2C means that you are dealing directly with the customer with no third parties. It usually means doing direct business on social media, such as Instagram or Pinterest, but it can also be selling goods you make directly to the end client online.
It still isn’t the most widespread model, but it will be very soon if the trends continue. It’s simple and lets you know exactly what you’re getting and who you’re getting it from.
3. Business to business
Right behind the B2C model of ecommerce business comes the B2B model. It refers to online companies selling goods or services to another business. Most commonly, it’s a manufacturer selling materials to a retailer that refines it and makes their product out of it. For instance, It’s a manufacturer selling fabric to a clothing store.
4. Consumer to consumer
The Consumer to Consumer ecommerce model is most commonly found on social media marketplaces and big online stores like eBay, Etsy, etc. It means a consumer is selling goods or services to another consumer—for instance, you selling your car on Facebook Marketplace to another person.
It’s very frequently used for second-hand goods or as a platform through which people can make transactions. Those platforms usually have a subscription fee for anybody who wants to sell there, which is how they make money, not by selling the actual goods.
5. Consumer to business
Finally, the Consumer to Business model is still the rarest out of these five, but it exploded in recent years. As the name states, the C2B model means you’re selling your services or goods to another business, which every influencer does. They offer posts to firms for a fee. Other popular C2B users are freelancers, offering one-time services to businesses.
Pros and cons of eCommerce
Like every other business model, ecommerce has its advantages and disadvantages. It’s essential to know how to weigh your options before venturing into a new business online.
The biggest pro for ecommerce is the low costs of running an online business. When having a physical store, you need to rent a place to locate yourself, and only local people will come to your store. But, if you do it online, you only have to pay a fraction of the price for hosting.
Even if creating a website from scratch and making it presentable and functional is expensive, it’s not nearly as expensive as decorating the interior, paying for working hours, bills, etc. The biggest pro for ecommerce is economics.
You’ll be open 24 hours a day, and you can sell to anybody in the world using the Internet, not only your local consumers. You provide people the opportunity to get what they need from the comfort of their home, which is incredible regardless of what you’re selling.
The biggest con for ecommerce, though, is security. The Internet is loaded with viruses and hackers stealing data and funds from people daily. It’s tough, but you should have no problems whatsoever if you have a good security gateway in place.
What is eBusiness?
Ebusiness describes any kind of business conducted online. That includes ecommerce (resale), but it’s not limited to strictly buying and selling. It can be technical support, online communities, online stores, or online companies.
Of course, when conducting a business, some kind of transaction has to occur, but it doesn’t have to mean you’re selling merchandise to somebody.
For instance, online communities are websites where people of the same interests gather to talk about those interests and prepare transaction deals, but not buying and selling through that particular website. Some subreddits are communities like this.
If you ever visited the tech-support website from your phone service provider, you used an ebusiness. Although they don’t sell you any goods, they provide you with a service they offer via the Internet. Hence, they are conducting ebusiness.
Finally, online companies are probably the most frequent types of ebusiness websites. The companies use the websites for visibility and gaining clients. However, it’s used as an online business card. You find a company, reach out to them through the contact information you found on their website, and then agree to a transaction via another channel, not the initial website.
Pros and cons of eBusiness
As with ecommerce, the advantages of having an ebusiness are availability, price, and comfort. You present your offer privately for every customer, even though your website is public. Everybody views it privately, which means that the only thing influencing their decision is the website itself.
It allows you to create an identity you want visually and functionally. Studies have shown that the more simple it is to get from Point A to Point B on your website, the better. It’s super expansive, too.
Growing from local to global is more achievable than ever before because your audience isn’t only the people that live close to your store location, but everybody using the Internet.
The most significant setback is still security, but there are more. The technical aspect is much more highlighted when conducting an ebusiness. For instance, if a worker calls in sick, you can find a replacement and work normally. But, if your website crashes, you cannot do much but wait for it to be fixed. And, sometimes, it’s not as easy as you think.
One angry customer is enough to ruin your reputation. For instance, if the payment gateways didn’t work correctly and someone lost their money, people will lose trust in your business, and it doesn’t even have to be your fault, but a technical issue. It’s tough, but if you keep everything tidy and up-to-date, you’ll have no problems.
Difference between eCommerce and eBusiness
Now that you know what ecommerce and what ebusiness is, it’s easy to distinguish them from one another. Ecommerce is only a subcategory of ebusiness. Every ecommerce is ebusiness, but not all businesses are ecommerce.
There has to be a transaction involved that is made through the website. If a site offers services but only gives out contact information on their website, and no transaction is involved directly through the website, it’s not considered an ecommerce, but ebusiness.
Therefore, if you wish to sell goods or services online and want the transactions to be done through the website, you’ll conduct an ecommerce business.
However, if you want people to be able to find you online, see what you’re offering, and contact you through your website, but the translation takes place elsewhere (e.g., bank transfer), you’ll conduct an ebusiness, not an ecommerce.