eCommerce – electronic commerce – is a form of transaction such as a sale that is completed through electronic means. This includes buying, selling, or exchanging products or services in return for money using an electronic network, usually the internet. That said, ecommerce does not solely exist online, which is why EDI in commerce is not used solely for web-based transactions. Indeed, ecommerce existed in B2B (business to business) transactions since the 70s, when they used VANs (Value Added Networks) for their transactions. Today, there are four key categories of ecommerce, all of which can use EDI (Electronic Data Interchange).
EDI in Commerce and the 4 Types of eCommerce
The four types of ecommerce are:
- B2B. This happens when two businesses transact with each other. For instance, when a mining corporation sells raw goods to a manufacturer, a manufacturer to a distributor, or a distributor to a retailer, then a B2B transaction takes place. Usually, the prices are much lower than those charged to consumers and they tend to be based on the number of items purchased, rather than on the item itself.
- B2C (business to consumer). This happens when a product or service is sold to regular consumers. Usually, this is done through catalogs with websites that have some sort of shopping cart software installed. When people think about ecommerce, B2C is usually what poops into their mind. It is now possible to purchase just about anything you want without having to have any type of human interaction. Whether you are looking for an all-inclusive beach holiday or a rare book, you can find it through B2C online transactions.
- C2B (consumer to business). This happens when consumers offer their assignments or projects online. They set an online budget and businesses can then bid on it. Doing so has empowered people to set their own rates and work for themselves. Online platforms that focus on this have enabled consumers and businesses to come together in order to complete their transaction.
- C2C (consumer to consumer). Perhaps the best known C2C example is eBay. Here, consumers can sell things they own to others using a bidding system. The highest bidder at the end of a certain period of time will then be the new owner after they have made their payment. Free classified online ads are another example of C2C, as are selling forums. Most people use PayPal for their payment system, ensuring they can send and receive money online with ease.
There are other forms of lesser known ecommerce as well, all of which can use EDI systems. For instance, there is B2E (business to employer), G2G (government to government), G2C (government to citizen), and so on. Each of these terminologies essentially describe the individual or institution that has something to sell, and the individual or institution that wishes to buy. Maintaining all these transactions, making sure orders are sent and processed and that payments are received on time, is what EDI is for. This ensures the interchange between the different pieces of data is completed properly.