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The Many Flavors of E-Commerce

The term e-commerce is really a "catch-all" phrase that encompasses many concepts. To help you better understand, presented below is my over-simplistic definition of e-commerce. 

According to Dictionary.COM, the term commerce is defined as follows: "The buying and selling of goods, especially on a large scale, as between cities or nations". This definition is straight forward and easy to understand. From here, we add the "e" for "electronic", and we derive the definition: "buying and selling of goods electronically". This typically means that orders and payments pass electronically. However, there is more to this - much more, as follows:

B2B (Business-to-Business) E-Commerce really refers to supply chain technology, which is by far the largest and most successful e-commerce technology employed today. You can read my Insights about B2B E-commerce here.

B2C (Business to Consumer) E-Commerce refers to the selling and buying of goods and services via the web from web retailers to web customers. This really is the same thing as B2B E-Commerce with one key exception. With B2B implementations, the parties are "Trusted Business Partners" who have an established working relationship. With B2C E-Commerce, the retailers is often selling to unknown, un-trusted strangers. Therefore extra effort must be made to capture customer and payment information. Further, this data is typically verified before orders are fulfilled. In this respect, B2C is a tougher solution to provide than B2B. However, B2C almost always involves a customer typing information into an order screen, there is no need to link together two complex accounting systems. In this respect, B2B is a much tougher solution to deliver. 

B2E (Business to Employee) E-Commerce generally refers to the requisitioning of supplies by employees for use in their jobs, but this really has grown to encompass much more. For example, B2E makes it very easy for an employee to requisition a new toner cartridge and printer paper - the order is entirely electronic, and supervisors are asked to approved the requisition in the event that the total order exceeds preset limits for that particular employee. However, B2E has grown into technologies that allow the employee to access their employee records to update address information, shift investments in the 401K plan, or maintain their internal resume. Many companies have found that B2E technologies have dramatically reduced the administrative burdens with the human resources department. Admittedly, maintaining employee information has little to do with commerce, but this term has grown to encapsulate this activity into the B2E definition.

C2C (Consumer to Consumer) E-Commerce has also emerged that allows unknown, un-trusted parties to sell goods and services to one-another. An excellent example of this is found at Ebay, where consumers sell their goods and services to other consumers. To accommodate this activity, several technologies have emerged. Firstly, Ebay allows all sellers and buyers to rate one another. In this manner, future prospective purchasers may see that a particular seller has sold to more than 2,000 customers - all of whom rate the seller as excellent. In another example, a prospective purchaser may see a seller who has previously sold only 4 times and all 4 rate the seller poorly. This type of information is helpful. Another technology that has emerged to support C2C activities is that of the payment intermediary. Pay Pal is a good example of this. Instead of purchasing items directly from an unknown, un-trusted seller, the buyer can instead send the money to Pay Pal. From there, Pay Pal notifies the seller that they will hold the money for them until the goods have been shipped and accepted by the buyer.

B2M (Business to Machines) E-Commerce is a fast emerging area within e-commerce. The general idea is that companies can link to remote machines via the internet. Here is an example. Assume that you drive a truck for Coca Cola and that it is your job is to refill Coke machines throughout your community. You stop at a high rise building that contains a Coke machine on every floor - now what? Do you leave the drinks behind and visit every Coke machine first to determine how many of which brands are needed? Do you carry cases of drinks with you as you go? With B2M technology, the folks at Coke know exactly how many drinks are in each machine by type of drink, and their accounting system produces a restocking report advising the driver accordingly. In this manner, Coca Cola can monitor their machines from afar to determine if  they need repair or restocking. This information is then used to schedule efficient delivery routes that allows you to restock the appropriate Coke machines just in time before the inventory is depleted.

As another example, consider the $5 billion Ryder Truck Company - Ryder System Inc. When a truck rolls into one of the company's maintenance bays, the attendant need only push a button to instantly determine the status of that vehicle. Specifically, a technician simply touches a probe on the end of a handheld computer to a coin-shaped disk on the truck's cab that has been busy gathering information on engine performance and fuel consumption from electronic sensors under the hood. All told, these sensors track information related to 65 different aspects of the truck to oil life, tire wear, filter life, gas mileage, and much more. Prior to the introduction of this B2M system in the early nineties, the company's mechanics were wrong almost 50% of the time when it came to identifying problems with the trucks. Now the sources of trouble are identified more quickly and a truck's downtime is often cut in half. The company manages almost 10,000 technicians and 175,000 trucks, but with the B2M system, inventory tracking, parts ordering, maintenance scheduling, and personnel scheduling are streamlined. Additionally, Ryder uses the information it collects on engine-part wear to negotiate longer warranties from suppliers. According to Chief Information Officer Dennis M. Klinger, the new system cost $33 million but reportedly paid for itself in just a few years. 

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