Understanding Ecommerce
Ecommerce, short for electronic commerce, is the process of buying and selling goods or services via the internet. Through websites, online marketplaces, and social media, individuals and businesses can sell goods and services using digital means to accept payment and collect customer data. For a more detailed understanding.
How Ecommerce Works
After a customer makes a purchase, the online retailer delivers the order via shipping, store pickup, or local delivery (in the case of physical products), or digitally (for digital products like PDFs, virtual courses, or online consultations). Ecommerce transactions happen across a variety of devices and platforms, using a number of different payment methods.
Types of Ecommerce Platforms and Online Sales Channels
There are many ways to reach and sell to consumers online, including owned channels like an online store and through third-party platforms.
Ecommerce Platforms
An ecommerce platform is a service that allows you to make money online through your own website. Shopify is an example of an ecommerce company that enables individuals, creators, and businesses of all sizes to sell online and in person through a brick-and-mortar store.
Online Marketplaces
Online marketplaces are ecommerce sales channels that allow you to sell products and services to an active audience. Marketplaces like Amazon or Etsy are also powerful search engines, as they are often the first point of discovery for consumers looking for products.
Social Selling Channels
Many social media platforms offer in-platform buying and selling features, enabling small businesses or personal brands to sell directly to audiences without an online storefront.
Payment Methods for Ecommerce
Consumers can make online purchases in a number of ways from digital wallets to credit cards processed through a payment gateway in an online store. Ecommerce platforms usually include integrations with payment processing services and sometimes offer their own digital payment platforms.
Types of Ecommerce Businesses Explained
There are many ecommerce types, defined by who you are and who you're selling to. Some helpful ecommerce terms to know are as follows.
Business to Consumer (B2C)
A business that sells goods or services to an individual consumer.
Business to Business (B2B)
A business that sells goods or services to another business.
Consumer to Consumer (C2C)
An individual who sells goods or services to another individual.
Consumer to Business (C2B)
An individual sells their own products or services to a business or organization.
Ecommerce Revenue Models
In addition to deciding what type of ecommerce business you want to run, it's important to decide how that business will make money. There are at least five different revenue models used by businesses selling online.
They are:
- Sales Model
- Subscription Model
- Advertising Model
- Affiliate Model
- Transaction Fee Model
Benefits of Ecommerce Businesses
Running an ecommerce business has its perks. Not only does this business model allow you to launch a business quickly, it also offers access to a global pool of potential customers looking for a convenient way to buy your product and interact with your brand.
A Convenient Way for Consumers to Shop
Ecommerce allows customers to shop from anywhere, on any device, at any time, without the need to physically visit a store. Potential customers can more easily discover your brand—even from another country—and compare products, features, and prices in minutes.
Increased Reach and Access to New Markets

An ecommerce business can reach a wider audience than a physical store alone. With an ecommerce store, businesses can sell their products to customers all over the world, without the need for a physical presence in every location.
