Define e-commerce. Provide examples to differentiate between the business-to-business (B2B) and business-to-customer (B2C) forms of trade and the goals of each.
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E-commerce is trade that takes place between companies and between companies and individual customers using IT and the Internet.
Business-to-business (B2B) commerce is trade that takes place between companies using IT and the Internet to link and coordinate the value chains of different companies. The goal of B2B commerce is to increase the profitability of making and selling goods and services. B2B commerce increases profitability because it lets companies reduce operating costs and may improve product quality. A principal B2B software application is B2B marketplaces, which are Internet-based trading platforms that have been set up in many industries to connect buyers and sellers.
Business-to-customer (B2C) commerce is trade that takes place between a company and individual customers using IT and the Internet. Using IT to connect directly to the customer means companies can avoid having to use intermediaries, such as wholesalers and retailers, who capture a significant part of the profit in the value chain. The use of websites and online stores also lets companies give their customers much more information about the value of their products. This often allows them to attract more customers and thus generate higher sales revenues.
Student examples will vary.
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