Selling online? The difference between e-commerce vs e-business might seem like an unimportant distinction for you to make, but a lot rides on knowing those differences!
E-commerce accounts for nearly 12% of total US retail sales (that’s more than $160 billion), and claiming your slice of the pie depends on having key industry knowledge like you’ll find here.
Discover how e-commerce vs e-business compare, and why it matters below.
What is e-commerce?
In a nutshell, e-commerce is the transaction of goods and services on the internet. Also known as electronic commerce and e-tail, e-commerce typically refers to the sale of physical goods on the internet although the term can be used to describe any commercial transaction done online.
Despite a recent slowdown in the industry’s growth rate, total e-commerce sales (retail and digital services) are projected to amount to roughly $765 billion by 2021.
E-commerce comes in several forms and can be accommodated for many different business models.
Types of e-commerce models:
- Business to Consumer (B2C) – an e-commerce business model where a business sells goods or services to an individual consumer. For example, when a single consumer purchases clothes online.
- Business to Business (B2B) – an e-commerce business model where a business sells its goods or services to another business. For example, an online business that sells video production services for other businesses to use in their marketing campaigns.
- Consumer to Consumer (C2C) – an e-commerce business model where an individual consumer sells their goods or services to other consumers. For example, a person selling their personal vintage records through an online platform like eBay.
- Consumer to Business (C2B) – an e-commerce business model where an individual consumer sells their goods or services to a business. For example, an online influencer offering to promote a business to their audience for a fee.
So if that’s “e-commerce” then what exactly is “e-business”?
What is e-business?
E-business is the facilitation of business through the use of the internet and online technology. E-business is not conducted exclusively online, but rather, uses the power of the internet to enhance a business that is also run offline (i.e. a brick-and-mortar store).
E-business, similarly to e-commerce, also comes in a variety of forms that make it relevant for companies in a variety of industries.
Types of e-business models:
- Pure Play – an e-business model where all efforts and resources are invested in one line of business. For example, a business that only sells custom baseball caps and nothing else would be considered a pure play e-business (assuming the business makes some sales online and some sales offline).
Note: Pure play businesses don’t necessarily have to operate online. Companies such as Starbucks are classic examples of pure play business, where the full focus of the business is placed on one product – in this example, coffee.
- Bricks and Clicks – an e-business model that operates and generates sales both online and offline. For example, a physical store that sells baby and children’s clothing, but that also allows customers to place orders and place purchases through an online store.
What are the key differences between e-commerce vs e-business?
- E-commerce is one potential piece of an e-business. An e-business is any business that incorporates online technologies into the business model. That could be something as simple as a physical store using social media marketing to bring in more customers.
Even though there’s no transaction occurring within that setup, the use of online tech for business purposes makes it an e-business.
- An e-commerce business refers to a company that offers an online monetary transaction process, while e-business refers to any business that includes online technology of some sort in its business model.
Note: Occasionally, the technology you want to add to your business in order to make it an e-business can be a bit outside your budget. In those cases, you should consider business loans as a way to upgrade your business without taking on too much financial pressure. While it comes at a cost, transforming your business into an e-business can give your cash flow the permanent boost you’ve been aiming for.
- The main benefactor of e-commerce is the customer who is provided with the means of making purchases online. On the other hand, the main benefactor of an e-business can be the customer as well as business partners, suppliers, and so on.
- E-commerce is conducted exclusively on the internet. E-business can be conducted on the internet, intranet, or extranet. The main difference there is that a company can be considered e-business even if it only uses online technology within the organization.
As you can see, e-commerce vs e-business isn’t really a competition – though knowing the differences can make a big impact on how you design your business model.
Do you want to conduct transactions online only? Do you want to enhance your business with online technology, but not necessarily by adding an online store to your website?
These are just a couple of important questions to ask yourself when choosing how to incorporate the power of online technology in your business. Be sure to do your due diligence and consider all of the key differences listed above before making a decision between e-commerce or e-business.