It makes sense, then, that businesses have started to embrace the never-ending possibilities of high-speed internet. The internet is a marketplace of unlimited potential and, in 2022, it’s difficult to imagine any business thriving without making use of web-based services.
What started off as ecommerce, the buying and selling of goods online, has now morphed into something much more comprehensive: Electronic business or e-business.
E-business is the operation of conducting any business using the web, internet, extranet, and intranet. By using a combination of the aforementioned network services, e-business utilises digital information and advanced communication technologies to streamline different business processes.
To help you better understand what it all means for you and your South African business, we’ve laid out key areas of focus about the global phenomenon that is e-business.
The Advantages of E-Business
There are advantages to e-business that make companies salivate at the chance of being part of the internet’s ever-growing web.
With e-business, operational processes are streamlined and you are able to accomplish more in less time. This will lead to a reduction of operational costs, freeing up funds that can be utilised in other areas of your business.
You can also increase your customer service, getting real-time feedback from your clients and being able to respond to any queries and concerns the moment you receive them. Similarly, you will have access to a much larger audience pool than before. That alone can drive your sales way up, if you can implement the correct e-business strategies.
The real-time aspect of e-business is extremely important. You can reach suppliers and customers about a certain problem before it spirals out of control. You can use information you’ve just learned to improve your business model just minutes later. You have more access to competitor information and can always place yourself one step ahead of the game. Everything in the world is changing constantly. With e-business, you can move with that change.
A Quick Look at Four Ecommerce Business Models
Ecommerce is a component of e-business. As such, understanding e-commerce will be beneficial in getting a full grasp of what e-business is. So, here are the four main ways in which a business uses the internet to provide goods and services, in an effort to gain a profit:
1. Business-to-business (B2B)
This is an online transaction between two businesses. An example of this would be the relationship between a wholesaler and a retailer, with the wholesalers’ main client being an entire business as opposed to an individual.
2. Business-to-customer (B2C)
Businesses use the internet to offer goods and services directly to the consumer. Here, the client is the individual. The buyer completes a purchase online, and the business ensures product delivery via the same means.
3. Consumer-to-business (C2B)
In the C2B business model, consumers tell the business what they want and how much they are willing to pay. Alternatively, consumers could offer to market and promote businesses on their own channels for a direct fee or discounted prices/free items from that business's catalogue.
4. Consumer-to-consumer (C2C)
This is when consumers are both the buyers and the sellers. They will use third-party platforms, like Gumtree and JunkMail, to connect. These middle-man platforms generate revenue from selling ads and charging for subscriptions, among others.
5 Important Components of E-Business
E-business exists for a multitude of reasons. Companies have chosen e-business for everything ranging from customer relationship management and supply chain management to electronic transactions within the business itself. Through it all, five main components of e-business stand out, and here they are:
1. Online Stores
Online stores are rooted in saving time and money for both businesses and consumers. Online payment options and online browsing (coupled with door-to-door delivery) make shopping convenient for the consumer and simpler for the business owner.
In essence, this is a way for businesses to lower costs and manual-labour output by using the internet to source products and services. E-procurement is also known as electronic supplier exchange.
3. Online Marketplace
An online marketplace is a space that connects buyers with products and services. Unlike the online store, the online marketplace does not produce the product or provide the service itself. It merely displays the inventory of other businesses. After visiting the online marketplace, shoppers will still have to go to that particular company's website or contact the service provider directly.
Looking to make your mark in the digital marketplace? Here’s all you need to know when building your own website.
4. Online Community
An online community is when a group of businesses and individuals come together on an online platform due to shared interests.
As a business that is part of an online community, you can generate leads in the hopes of landing your dream clients; improve your products and services by getting direct feedback; cultivate genuine connections with your consumer base; and increase revenue through online community advertising.
5. Online Company
Sometimes businesses can rally together when their products and services are mutually beneficial to each other. In that case, they will form an online company, where they share products or services amongst themselves and help one another find customers.
One thing about e-business is that companies are much better able to meet their clients on their clients’ terms. Here are a few ways in which businesses are able to do this:
- Faster delivery of goods/services
- Discounted prices
- Better customer service and ease of access
- A wider array of products are available as customers are not restricted to only what is in the physical shop, they have access to warehouse inventories too.
Just starting your journey in ecommerce? Read the Hitchhiker's Guide to Making Money Online.
To feed what your business has been craving have a look at our iK Shop.