E-commerce, short for electronic commerce, is a business transaction that occurs over an electronic network such as the Internet. Anyone with access to a computer or mobile device, an Internet connection, and a means to pay for purchased goods or services can participate in e-commerce. Some people use the term m-commerce that takes place using mobile devices.
Popular uses of e-commerce by consumers include retail, finance, travel, entertainment, and health. Users can purchase just about any product or service on the Web, including groceries, flowers, books, computers, music, movies, cars, airline tickets, and concert tickets. They also can pay bills, invest in stocks, make airline reservations, reserve a hotel or car, and fill prescriptions.
Three types of e-commerce are business-to-consumer, consumer-to-consumer, and business-to-business. Business-to-consumer (B2C) e-commerce consists of the sale of goods and services to the general public. For example, Apple has a B2C Web site. Instead of visiting a retail store to purchase an iPod, customers can order one directly from Apple's Web site.
A customer (consumer) visits an online business through an electronic storefront, which contains product description, images, and a shopping cart. The shopping cart allows the customer to collect purchases. When ready to complete the sale, the customer enters personal data and the method of payment, which should be through a secure Internet connection. E-retail, short for electronic retail, occurs when businesses use the Web to sell products.
Consumer-to-consumer (C2C) e-commerce occurs when one consumer sells directly to another, such as in an online auction. With an online auction, users bid on an item. eBay is one of the more popular online auction Web sites.
As an alternative to entering credit card, bank account, or other financial information online, some shopping and auction Web sites allow consumers to use an online payment service such as PayPal or Google Checkout. To use an online payment service, you create an account that is linked to your credit card or funds at a financial institution. When you make a purchase, you use your online payment service account, which transfers money for you without revealing your financial information.
Most e-commerce, though, actually takes place between businesses, which is called business-to-business (B2B) e-commerce. Businesses often provide goods and services to other businesses, such as online advertising, recruiting, credit, sales, market research, technical support, and training. For example, some MasterCard and Visa credit card companies provide corporations with Web-based purchasing, tracking, and transaction downloading capabilities.
