ECommerce or electronic commerce simply refers to the buying/selling of products and services over electronic means such as the Internet. E-commerce has grown rapidly with the increased use of the internet by more and more people across the world. Websites such as eBay and Amazon obviously fall into this category, but so do any transactions involving telephone banking, ATM machines and credit cards.
One advantage of eCommerce, from the customer’s point of view, is that it effectively cuts out the middleman in the transaction. Whereas traditionally, the supply route goes manufacturer-wholesaler-retailer-customer, with e-Commerce the retailer can be cut out of the equation. This means there is more market transparency as the customer can be told through digital platforms what the wholesale price is, then buy the product without going through a middleman, so to speak.
With eCommerce there is also more encouragement for the individual or small business to sell goods at an affordable rate. Before the internet became widespread a person wanting to setup a shop would have to pay for the premises and expensive ground rent in order to run a viable sales business. Nowadays, an individual with no previous business experience can sell goods through the internet at a low cost. There are template systems which allow users to make a simple sales website with relatively small price tags (eg £20 per month). Third party marketplaces such as eBay and Amazon allow users to sell products through their site with little or no upfront costs to be paid.
With the growth of eCommerce, the gap between individuals and professional sales businesses has been bridged, allowing a greater number of people to join the market who would not normally have the opportunity to do so.