Page 116 - Computer Class 08

How does E-Commerce Work?
Because there are hundreds of different products and services for consumers and the
multitude of different ways these products and services can be delivered, e-commerce by its
nature, is varied in the way it works. In its most basic form, e-commerce works as follows :

1. Consumers choose a product or service on a website.
2. Consumers pay electronically on the website (online credit card transactions) or using a
third party payment provider such as PayPal.
3. The business owner or merchant receives the order and the payment and the order is
fulfilled (delivered by post, booked in for services etc.)

E-Commerce is also done through mobile phones. It is known as M-commerce or Mobile-
commerce. It is being used by people more popularly as it is convenient and easy.

E-Commerce Business Models
There are four basic models of e-commerce business:

1. Business–to–Business 2. Business–to–Employee
3. Consumer–to–Consumer 4. Business–to–Consumer

8 Business-to-Business E-Commerce
B2B is when businesses sell to other businesses. This is typical of stationery stores who sell
office equipment in bulk to businesses. Normally, B2B companies provide a discounted

rate per unit if consumers buy in bulk which it is great motivation for offices to avail of.
For example : A wholesaler places an order from a company’s website and after
receiving the consignment, sells the end product to final customer who comes to buy the
product at wholesaler’s retail outlet.

8 Business-to-Employee E-Commerce

Business-to-Employee (B2E) e-commerce uses an intra-business network which allows
various companies to provide goods or services to their employees. B2E applications
provided to employees include:
8 Online insurance policy 8 Online supply requests

8 Special employee offers 8 Employee benefits
8 Consumer-to-Consumer E-Commerce

C2C is a relatively new business model where consumers who previously bought
something seek to resell this item to another consumer. Through marketplaces like eBay

and Craigslist, this can be easy and quite lucrative for selling items that you no longer
have a use for.

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