What’s the Difference between eCommerce and eBusiness?

Nov 6, 2020 | eCommerce | 0 comments

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If you’re thinking of going into business (especially in this time of COVID-19!), there is a need to understand the concepts of eCommerce and eBusiness.

Taking a business online has a lot of advantages, especially during this pandemic where a lot of customers are doing their shopping from home using the internet.

eCommerce and eBusiness are easily mistaken by a lot of business newcomers who want to indulge in a business that has an online presence so they can take advantage of the large customer base of internet users.

In this article, I will be highlighting the differences between eCommerce and eBusiness. I hope to shed more light on the different types of eCommerce and eBusiness and how exactly you can apply them to your business.

Hopefully, this will put an end to common misconceptions and allow you to approach these business types with a better understanding and mindset.

What is eCommerce?

Firstly, to understand what eCommerce is, it’s best to understand what commerce is. Commerce is the exchange of goods or commodities. It simply means the act of buying and selling a product, in exchange for money. In order words, commerce is just another word for trade. You practice commerce or trade every day, for example when you sell an old shoe in a yard sale, or when you buy some sneakers at the mall, it’s all part of commerce.

The “E” in eCommerce stands for Electronic. This simply means taking the concept of commerce or trade and putting it in an online platform. eCommerce or electronic commerce has to do with the idea of trading on the internet.

As an offline trader, there are a lot of advantages to taking your business online. For one, it opens your business to a large customer base of over 2 billion users. It increases the mobility of your business since your customers can access your store from their cell phones or laptops without having to walk physically to your shop. They can just order from where ever they are.

You can sell anything using eCommerce, from books to furniture, plane tickets, songs, and even houses.

The first step to practicing eCommerce is to build an eCommerce website. Examples of eCommerce websites are Aliexpress.com, Ebay.com, and even Amazon.com.

Types of eCommerce Business Models

There are four types of business models which eCommerce operates under, and they are:

  1. Business to Consumer: Here, the business conducts sales to a consumer who is looking to buy a product. For example, a video game company selling its video game to a consumer through an online website.
  2. Business to Business: Here, the business conducts sales, not to an ordinary consumer but another business. For example, a video game company selling some of its hardware to another video game company through their online website.
  3. Consumer to Consumer: Here, a consumer sells a good or service to another consumer through an online website. For example, a consumer selling his used video game on eBay to another consumer.
  4. Consumer to Business: Here, a consumer sells his goods or services to a business through an online platform. For example, a consumer selling some of his Bitcoins to a Bitcoin Exchange company through their website.

eCommerce is growing every day, it is always a good option to explore if you intend to take your store to the next level.

What is eBusiness?

Now that you understand what an eCommerce is, let’s talk about eBusiness. A lot of people confuse an eBusiness with eCommerce but they are entirely two different things. While eCommerce is an online store, eBusiness means something else.

To understand what eBusiness is, it’s best to understand what a business is. A business is any organization or entity that is involved in commercial or professional services. Businesses can be profit or nonprofit. A business doesn’t necessarily have to involve the buying or selling of goods. It could be in other forms like Forex trading or sports management. There are billions of businesses out there and a new one is started every day.

The “E” in eBusiness also stands for Electronic, just like in eCommerce. The concept of eBusiness means taking all or some parts of one’s business online, making use of modern internet strategies and digital information to establish a strong online presence.

eCommerce is simply a part of eBusiness, which has to do with the trading of goods and services, while an eBusiness deals with business in a much broader sense online.

Parts of an eBusiness

As explained, eCommerce is a subset of eBusiness which majorly has to do with the exchange of goods and services. An eBusiness has other parts and components other than trading. Here are some of them.

  1. E-Procurement: E-Procurement has to do with sourcing goods on the internet for procurement. This helps to reduce the time and cost of doing it manually offline.
  2. eCommerce: This has to do with the digital sales and buying of products and services.
  3. Online Stores: This is an online version of a local store or market place. It provides the environment for the online procurement of goods.
  4. Online Communities: This is an important part of running an eBusiness. Online communities are places online where members of an eBusiness meet together to discuss the business and products and sometimes take decisions. Some businesses use online communities to keep in touch with their customer base and keep them engaged. Examples of online communities can be found on social media like Facebook and Twitter.
  5. Online Companies: These are eBusinesses that are based fully online and a major part of their operations is conducted on the internet. An example of an online company is a web hosting company.

The key differences between eCommerce and eBusiness

By now it should be clear that the main difference between eCommerce and eBusiness is that eCommerce is just one potential piece of an eBusiness.

In short, an eCommerce business refers to a company that offers an online transaction process, while an eBusiness refers to any business that incorporates online technology of some sort in its business model.

Another notable difference is that the main beneficiary of eCommerce is the customer who is provided with the means of making purchases online. On the other hand, the main beneficiary of an eBusiness can be the customer as well as business partners, suppliers, and other stakeholders.

Final thoughts

eCommerce and eBusinesses are also important parts of the business world. Their advantages are enormous. They are very easy to set up, they are also way cheaper than offline businesses and you have flexible hours of business. The advantages go on and on.

Whether you are going to make sales online through eCommerce or you are going to use the internet or digital knowledge to make your traditional business a little easier and modern, the understanding of these two concepts will help you in every way.

Hopefully, this article has been very helpful. Don’t forget to leave a comment below!

About Jeff Tay

About Jeff Tay

Jeff Tay is the founder of Freedomholic, a blog about making money online in order to achieve financial, time, and location freedom. He has more than 80,000 followers on social media, runs a digital marketing agency and trains people on how to start, grow, and scale a 6-figure agency.

The 4-Hour Agency

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