Internet business and the types of e-commerce
E-commerce means buying and selling goods or services through the internet: on a website, an app or social media. It is a kind of internet business, which also includes online services, banking and booking.
Types by who sells to whom
- B2C (business to consumer): an online shop sells to you.
- B2B (business to business): a factory buys raw material online from a supplier.
- C2C (consumer to consumer): people sell used items to each other through an app.
- D2C (direct to consumer): a brand sells straight to you, skipping wholesalers and shops.
- Also C2B (a freelancer sells work to a firm) and B2G (firms sell to government on e-tender sites).
Benefits and limits
- For buyers: open 24×7, huge choice, easy price comparison, home delivery, reviews.
- For sellers: reach far-away customers, lower shop rent, data about customers.
- Limits: you cannot touch the product, delivery takes time, returns are costly, online fraud, and people without internet are left out.
Marketplaces
A marketplace is a platform where many independent sellers list products and many buyers shop. The platform usually does not own the goods (an inventory-led online shop does). It earns money from commission on each sale, listing fees, advertising and delivery charges.
- Buyers get more choice and ratings to judge sellers.
- Small sellers get a ready audience without building their own site.
- But sellers pay commission, face strong price competition and depend on the platform's rules.
Network effect: more buyers attract more sellers, and more sellers attract more buyers.
M-commerce and digitalised shops
M-commerce (mobile commerce) is e-commerce on a smartphone: shopping apps, mobile wallets, UPI and QR payments, and social media shops. Most online orders in many countries now come from phones.
Digitalised shops
Physical shops also use digital tools:
- QR codes on shelves for product details and payment.
- Screens, digital price tags and self-checkout.
- Click and collect: order online, pick up in the shop.
- Ship from store: the local shop sends online orders.
- Endless aisle: a tablet in the shop to order items not on the shelf.
A firm that links all its channels so the customer can move between them smoothly is omnichannel. Shops that only sell offline are 'brick and mortar'; 'click and mortar' firms do both.
E-retail logistics
Logistics is moving and storing goods so they reach the customer on time. For online retail the steps are:
- Warehouse / fulfilment centre: stock is stored and tracked.
- Pick and pack: the items of an order are collected and packed.
- Sort at hubs: parcels are grouped by area.
- Last-mile delivery: from the nearest hub to the door. It is the most costly part.
- Reverse logistics: returns and exchanges come back.
Other ideas: cash on delivery, dark stores (small warehouses for quick delivery), and drop-shipping (the supplier ships directly; the seller never holds stock).
E-marketing and telemarketing (non-store retail)
Non-store retailing sells without a physical shop: e-commerce, telemarketing, TV shopping, catalogue (mail order), vending machines and direct selling.
E-marketing
Using the internet to bring buyers to the online shop: search ads and SEO, social media, email, influencers, and personalised suggestions based on past shopping.
Telemarketing
Selling or promoting by telephone. Outbound: the firm calls customers. Inbound: customers call a number shown in an ad. It gives a personal touch but can annoy people; many countries have 'do not call' registers that firms must respect.
Try it
Look at your last online order (or ask a family member). Write which type it was (B2C, C2C, D2C) and list the steps from 'click' to 'doorstep'. Then, in the 3D free play, set a ₹1,000 item and raise the commission. At what commission does the seller get less than ₹800?
Key formulas and definitions
- Commission = price × commission % ÷ 100
- Seller's payout = price − commission − shipping (− other fees)
- Return rate (%) = items returned ÷ items sold × 100
- Types: B2C, B2B, C2C, D2C (also C2B, B2G)
- Order flow: click → pick → pack → ship → last mile → (returns)
- Omnichannel = all channels linked for one smooth customer journey
Worked examples
1. A ₹1,200 item sells on a marketplace with 10% commission and ₹50 shipping. How much does the seller get?
Commission = 10% of 1,200 = ₹120. Seller gets 1,200 − 120 − 50 = ₹1,030.
2. A student sells her old cycle to another person through an app. Which type of e-commerce is this?
C2C (consumer to consumer).
3. An online shoe store sold 2,000 pairs and 240 came back. Find the return rate.
Return rate = 240 ÷ 2,000 × 100 = 12%.
4. A clothing brand lets you order online and pick up from its mall store the same evening. Name this service and the strategy.
Click and collect, part of an omnichannel strategy (online and store linked).
5. Seller A: ₹800 item, 20% commission, ₹40 shipping. Seller B: ₹700 item, 8% commission, ₹60 shipping. Who gets more per sale?
A: 800 − 160 − 40 = ₹600. B: 700 − 56 − 60 = ₹584. Seller A gets ₹16 more.
6. Why is last-mile delivery the most expensive part of e-retail logistics?
Each van carries few parcels to many different addresses, with traffic, failed deliveries and cash collection, so the cost per parcel is high.
Common mistakes
- Thinking a marketplace owns everything it sells. Most products belong to independent sellers.
- Forgetting shipping and fees when finding the seller's payout.
- Mixing up C2C and D2C. C2C is person to person; D2C is the brand to you.
- Thinking e-commerce has no logistics. Every click needs warehouses, delivery and returns.