Explaining how e commerce works is rather simple. E commerce is simply the exchange of goods and/or services electronically.
When you make a purchase from eBay, Amazon.com or any online store, you have participated in e commerce. If you are among those who download music from sites like Napster or iTunes, then you too have performed e commerce. Knowledge of the different types of e commerce from the start will facilitate better understanding.
B2B: B2B or business-to-business e commerce is the oldest form of e commerce. In the 1960s, information and files were being shared and transferred electronically by banks and other businesses. This sharing of files and information could not expand, since there wasn’t one specific standard for conducting this business. Hence some businesses were unsuccessful in transferring with each other. Once a reliable standard was set up in the 80s, B2B e commerce really took off, because they all used the same method, and could exchange files much more easily.
C2C: Consumer-to-consumer or C2C has gained popularity with the masses and is widely used by many today. If you see an ad posting on an electronic board or an online auction and you purchase something online by responding to it then you have participated in consumer to consumer e commerce, the only condition being that you purchase from a person rather than a business. By far, the most popular form of consumer-to-consumer e commerce is in the form of online auctions, through the mammoth eBay auction site, where anyone can put goods online for sale to the highest bidder.
P2P: P2P or peer-to-peer e commerce started with Napster, where users shared files for free. Several instances of similar websites and file-sharing programs and systems can be found online.
B2C: Business-to-consumer forms a major portion of overall e commerce transactions and hence it must be necessarily mentioned while explaining the working of e commerce. An electronic download or an item that needs to be shipped, if purchased by anyone at an online store or website, is considered as e commerce. So to explain how e commerce works, it’s necessary to keep these things in mind.
You know you have engaged in e commerce when you do any one or more of the following: Exchange information online, Exchange money online, Exchange goods or services online. To explain how e commerce works in your favor, the concepts are just as simple. If you wish to purchase a book, for example, it is not too hard to locate numerous online bookstores and use them to compare its prices to determine the lowest one. The cost of shipping the book and the shipping time are some of the factors that you should consider before selecting a store which can send you the book in the shortest possible time and at the lowest price.
This can be accomplished without standing in a queue, fighting a crowd, or spending money on travel. The fact that you can compare and shop for small as well as large items is just one of the advantages that e commerce offers you. Though we can go on to actually cover the various advantages of e commerce, you will experience them personally when you actually purchase an item using this method.