Electronic commerce (ecommerce) is a type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet. Electronic commerce operates in all four of the major market segments: business to business, business to consumer, consumer to consumer and consumer to business. It can be thought of as a more advanced form of mail-order purchasing through a catalog. Almost any product or service can be offered via ecommerce, from books and music to financial services and plane tickets.

Also sometimes written as “e-commerce” or “eCommerce”.


E-commerce, in its initial form of commercial transactions, came about in the late 1970s. At this point, businesses began to send commercial documentation electronically to other businesses. The general public was introduced to the Internet in 1994, but it took an additional four years to create the security protocols necessary for a ready Internet connection. By 2000, businesses in America and western Europe were presenting their goods and services online. This is when e-commerce became online buying and selling, and e-business was born. Amazon and eBay were two of the first e-businesses to allow electronic transactions.

E-commerce applications

E-commerce is conducted using a variety of applications, such as email, online catalogs and shopping carts, EDI, File Transfer Protocol, and web services.

This includes business-to-business activities and outreach such as using email for unsolicited ads (usually viewed as spam) to consumers and other business prospects, as well as to send out e-newsletters to subscribers. More companies now try to entice consumers directly online, using tools such as digital coupons, social media marketing and targeted advertisements.

E-commerce businesses may employ some or all of the following:

  • Online shopping web sites for retail sales direct to consumers
  • Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales
  • Business-to-business buying and selling
  • Gathering and using demographic data through web contacts and social media
  • Business-to-business electronic data interchange
  • Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)
  • Engaging in pretail for launching new products and services
  • Online financial exchanges for currency exchanges or trading purposes

Resources: www.smallbusiness.chron.com, www.en.wikipedia.org, www.investopedia.com, www.searchcio.techtarget.com