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E-Commerce explained

E-Commerce explained


Definition of e-commerce: Buying and selling of goods including digital products* and services through electronic channels such as internet are called e-commerce.

*Any products that are stored, delivered and used in its electronic format are called digital products. These products are shipped electronically to the consumer through the internet.

We can identify e-commerce business into two different methods viz. (a) Inventory based model of e-commerce and (b) Marketplace model of e-commerce

Inventory based model of e-commerce

Inventory based model of e-commerce is an e-commerce activity where the owner of inventory of goods and services directly sells them to the consumers. The owner manages every aspect of the business such as warehousing, logistic, interfacing with the customers etc. without the help of middlemen.

Marketplace model of e-commerce

An e-commerce company (entity) acting as a facilitator between buyer and seller registered on its platform on B2B basis is called ‘Marketplace model of e-commerce’. In Marketplace model of e-commerce, the facilitator company does not own the inventories but provides support services to sellers in respect of warehousing, logistics, order fulfillment, call center, payment collection and other services. The warranty /guarantee provided on goods and services sold will also be the responsibility of the seller. Examples of marketplace model of e-commerce entities are Amazon, flipkart, Snap deal, e-bay etc.

Meaning of on B2B basis

Any transaction that involves a manufacturer and wholesaler or a wholesaler and a retailer is called Business to business or B to B or B2B basis.

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