A Comprehensive Guide to Ecommerce: Definition, Models, and Examples (2023)

E-commerce, or electronic commerce, is a digital platform for businesses to sell and buy products and services online. Funds and data transactions are also completed over an electronic network.

Business owners utilize different online marketplaces to launch their goods and services, in which customers can freely select and purchase products. These web stores have servers that directly manage purchases and payments between the seller and the buyer.

In 2021, e-retail purchases reached USD 5.2 trillion and were expected to reach approximately USD 8 trillion by 2026. This shows that the e-commerce economy continues to grow, and more businesses are expanding their market through online links.

What Is E-commerce?

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How Does E-commerce Work?

Have you ever visited a mall and noticed plenty of products being sold around? We have gadget stores, appliance centers, clothing, beauty salons, grocery stores, etc. Try to put everything online. That’s how e-commerce works!

From the traditional buying of items in a physical store, e-commerce provides a new space for businesses to sell products and services. Instead of building infrastructure, business owners create their websites where all store items are displayed. Customers can browse through their mobile phones and make payments using bank transactions.

After learning the e-commerce meaning and how it works, we can now discuss the type of models, examples, platforms, and vendors that are all essential in the industry.

Types of E-commerce Models

Here are the different types of e-commerce models:

Business to Business

It refers to the selling of products and other services between businesses. Buyers often purchase wholesale and sell it in retail to customers. A United State reseller tracking service reports total sales of $65.4 billion in 2022, with a 10% increase from the previous year.

Business to Consumer

It is known as the retail selling and buying of products in e-commerce. Certain businesses sell their products, services, and information to direct customers. The global market for Business to Consumer E-commerce reached an estimated USD 4.3 million in sales in 2022.

Consumer to Consumer

This type of e-commerce deals with consumers trading products and services. Third parties usually carry out transactions using online platforms to ensure a safe and fair trade.

Consumer to Business

Opposite to Business to Consumer, consumers sell their products and services for businesses through bidding and wholesale purchases. For instance, a social media influencer offers services to promote a business online in exchange for a fee.

Business to Administration

Transactions are done between a business and the administration or a government agency. Various agencies avail e-services such as social security, employment, registers, and legal documents.

Consumer to Administration

Administrations often purchase services for individual customers in e-commerce. Consumers run errands such as making payments, distributing information, collecting taxes, and making appointments on behalf of public agencies.

E-commerce Platforms and Vendors

An e-commerce platform is a software solution for small businesses to large enterprises in marketing their products. It offers services in e-commerce website building, inventory management systems, customer service, and accounting.

Examples of vendors with platforms to manage e-commerce businesses are:


WooCommerce has a variety of extensions for automated tax calculations, product and order management, marketing integrations, shipping, and other related services. The platform also offers developers you can hire to help you customize your web store. Your store can accept payments on different credit cards, checks, cash, and bank transfers.

With a 36.68% market share, WooCommerce is the number one leading e-commerce platform in 2022.

Wix Stores

This platform has a tool that automatically builds your web store. It has a friendly interface where your dashboard shows the total sales, transactions, and revenue of your e-business.

It includes payment through Wix Payments, credit and debit cards, and PayPal.


Shopify’s advantages over other e-commerce platforms are advanced analytics services, special carrier service prices, and a shipping management system. This avenue has 3D Secure checkouts for data protection which makes it one of the best-known e-commerce platforms.

You don’t need design skills to navigate this software. It has an interface that is easy to collaborate with, and you have complete control of the layout and content of your web store.  It can accept payment through Visa, Mastercard, American Express, Apple Pay, and Google.


This platform has high-quality SEO, email marketing features, and an order management system with inventory tools. BigCommerce also has an open SaaS (software as a service) solution, software delivery, and licensing method that gives you faster customization and enterprise integration.

Payments are settled through Amazon Pay, Apple Pay, and Google Pay.


PrestaShop offers around 2000 choices of templates that you can use to customize your business layout. Its dashboard contains all data from total orders and sales, cart value, profit, and conversion rate. In-store payment, Visa, PayPal, and MasterCard are the available mode of payment for this e-commerce platform.

You will need funds to purchase your own business space on these e-commerce platforms. It is a good thing PIRS Capital offers funding services through our Marketplace Financing Program. Visit our page to know more.

No commitment or hard credit checks, apply today!

Examples of E-commerce

E-commerce is involved in various business transactions. Here are some examples.


Purchase of business goods in bulk, often from a manufacturer to a retailer. The retailer then sells the product in smaller quantities at a higher price to individual consumers.

A wholesaler can focus on selling a single product or offer different goods, depending on their style of market.


Retailing is an example of e-commerce that focuses on satisfying the needs of final consumers in the food chain. It’s from the French word “re-tailler” which means to divide. Thus, retailing in e-commerce means selling goods in small quantities.

Retail also covers the sale of services to individual customers, such as in health centers, tailoring, and beauty salons.


This example targets specific investors and entrepreneurs to fund a new business. There are regulations in crowdfunding that binds investors and business owners to protect their principal.


Dropshipping is a type of business where a seller acts as a middleman between the manufacturer and the customer. The seller arranges transactions, and inventories are done by wholesalers or manufacturers.

Products and Services

E-commerce products and services come in different forms, including services and physical and digital products. Physical goods are tangible and require order inventory and shipping to consumers. Digital products are online licenses such as courses, templates, and media materials. Meanwhile, services are skills provided by entrepreneurs in exchange for fees.

What Is E-commerce, and How Does It Work?

Electronic Commerce Meaning

It is an online platform that provides an easier way for sellers and buyers to purchase items.

How It Works

Let’s say you want to buy a beauty item in an online shop. You navigate through your computer and find an online market that sells your item. Once you click the order button, your web server then communicates from the order manager down to the stock database to check and confirm your purchase.

Once ready, you will be directed to a merchant system that processes your bank payments. If the transaction is successful, the order manager then requests the manufacturer to dispatch your item, which will be delivered through your door.

Is E-commerce Profitable?

Did you know that e-commerce sales in 2021 accounted for approximately 19% of retail sales worldwide? In other words, the e-commerce space is rapidly increasing. And yes, it is profitable!

The profitability of e-commerce businesses depends mainly on how you maximize the marketplace and how fast you can deliver items. The best way to earn big in e-commerce is to learn your customers’ demands and behaviors toward purchasing goods online.

Why Is E-commerce So Important?

E-commerce allows businesses to expand in the global market without the need to build physical stores and infrastructures. It has several benefits, including:

Exposure to a Wider Audience

E-commerce helps sellers to reach out to customers worldwide. It goes beyond the concept of physical stores in particular locations that certain groups of people can only visit.

Ease of Use

E-commerce describes the use of web stores as more accessible tools than traditional shops. It allows both sellers and buyers to conveniently make purchases. Customers are more interested in shopping online than driving to an actual store and making purchases.

Increased Sales

One good thing about e-commerce is providing opportunities for business owners to increase their sales and revenue.

How Do I Get Started in E-commerce?

First, research and define the e-commerce business that you want to start. Plan your target market and product ideas before creating your online store. Registering your e-commerce business and brand name is also essential to ensure your business’s validity.

Starting up a new e-commerce business is expensive. You can ask entrepreneurs and investors to help with your starting expenses. PIRS Capital also offers e-commerce business funding services. We can help you build your online store through our Marketplace Financing Program. Check out our page to know more about this.

Ready to take control of your finance?

Ready to Get Started?

It is indeed rewarding to watch a business grow and reach the world market. E-commerce has helped thousands of companies build their digital stores and present their products online. It has also provided convenience to millions of customers by buying items and delivering them right through their doors.

Through the years, e-commerce has been transforming the supply chain practices and distribution channels of more businesses into digital networks. So, if you’re planning to contribute to the e-commerce economy, now is the right time to do it. If you need funding to launch your business, reach out to PIRS Capital today.

Written by: Mitchell L.

I work with companies that sell products on platforms such as Amazon, Shopify, Walmart, Ebay, Etsy, etc. I understand that every business is unique and thats why I form genuine relationships with owners so I can help them reach their goals and find success through our working capital solutions.

E-commerce Guide: FAQ's

E-commerce, in simple terms, refers to the process of buying and selling products or services over the internet. It involves conducting business transactions electronically, where businesses and consumers engage in online shopping, online payments, and digital interactions.

E-commerce eliminates the need for physical stores or in-person interactions, allowing people to browse, purchase, and sell goods from the comfort of their own devices. It has transformed the way businesses operate and how consumers shop, offering convenience, accessibility, and a global marketplace for conducting trade online.

The main purpose of e-commerce is to facilitate the buying and selling of goods and services through electronic channels, primarily the internet. It aims to provide businesses and consumers with a convenient and efficient platform for conducting transactions online. The key purposes of e-commerce include:

  1. Facilitating Trade: E-commerce enables businesses to reach a wider audience beyond their physical locations, expanding market reach and potential customer base. It provides a platform for businesses to showcase and sell their products or services online, breaking through geographical barriers.
  2. Enhancing Convenience: E-commerce offers convenience for both businesses and consumers. Buyers can shop anytime and from anywhere, eliminating the need for physical travel to stores. On the other hand, businesses can operate online stores 24/7, allowing customers to make purchases at their convenience.
  3. Enabling Cost-Effective Operations: E-commerce can be more cost-effective for businesses compared to traditional brick-and-mortar stores. It eliminates the need for physical storefronts, reducing expenses related to rent, utilities, and inventory management. Additionally, digital marketing and advertising can be more targeted and cost-efficient compared to traditional marketing methods.
  4. Expanding Product Reach: E-commerce enables businesses to showcase a larger range of products or services without the limitations of physical shelf space. This provides customers with a wider selection to choose from and allows businesses to cater to niche markets or offer specialized products.
  5. Enhancing Customer Experience: E-commerce platforms offer various features and tools to enhance the overall customer experience. This includes personalized recommendations, secure online payment options, customer reviews, and efficient customer support. E-commerce allows businesses to understand customer preferences better and tailor their offerings accordingly.
  6. Enabling Data-Driven Insights: E-commerce generates vast amounts of data that businesses can analyze to gain insights into customer behavior, preferences, and market trends. This data can be utilized to optimize marketing strategies, improve product offerings, and make informed business decisions.
  7. Driving Business Growth: E-commerce provides opportunities for businesses to scale and grow rapidly. With the ability to reach a global customer base, employ targeted marketing strategies, and leverage digital tools, businesses can significantly expand their sales and revenue potential.

The main purpose of e-commerce is to create a seamless and efficient platform for buying and selling, revolutionizing the way businesses operate and enhancing the shopping experience for consumers.

E-commerce, short for electronic commerce, refers to the buying and selling of goods and services over the internet. It involves online transactions conducted between businesses (B2B), businesses and consumers (B2C), consumers and consumers (C2C), or consumers and the government (C2G).

Examples of e-commerce include:

  1. Online Retail: This includes online stores and marketplaces where businesses sell products directly to consumers. Popular examples include Amazon, eBay, and Walmart.
  2. Digital Products and Services: E-commerce also encompasses the sale and delivery of digital goods such as e-books, software, music, videos, online courses, and streaming services like Netflix and Spotify.
  3. Dropshipping: In this model, the seller does not hold inventory. Instead, they partner with suppliers who ship products directly to customers. Shopify and Oberlo are examples of platforms facilitating dropshipping.
  4. Online Auctions: Websites like eBay and Bidding Owl allow users to bid on products, with the highest bidder securing the purchase.
  5. Peer-to-Peer Marketplaces: Platforms such as Etsy, Airbnb, and Uber enable individuals to buy and sell goods, rent accommodations, or provide services directly to each other.
  6. Subscription-Based Models: Businesses offer products or services on a recurring basis, typically charging a subscription fee. Examples include subscription boxes like Birchbox and streaming services like Amazon Prime.
  7. Business-to-Business (B2B) E-commerce: This involves online transactions between businesses. Examples include Alibaba, which connects manufacturers with retailers, and SAP Ariba, which facilitates procurement between businesses.
  8. Online Food Delivery: Services like Grubhub, Uber Eats, and DoorDash enable customers to order food from local restaurants for delivery or pickup.
  9. Online Travel and Booking: Websites such as Expedia, Booking.com, and Airbnb facilitate online travel bookings, including flights, accommodations, car rentals, and vacation packages.
  10. Online Payment Systems: E-commerce relies on secure online payment systems like PayPal, Stripe, and Square, which facilitate transactions between buyers and sellers.

These are just a few examples of the vast array of e-commerce models and platforms that have transformed the way we buy and sell products and services in the digital age.

E-commerce offers numerous benefits for businesses and customers alike:

  • Global Reach: E-commerce enables businesses to reach a global customer base, breaking through geographical limitations and expanding market opportunities.
  • 24/7 Availability: Online stores operate round the clock, allowing customers to browse and make purchases at their convenience, enhancing accessibility and flexibility.
  • Reduced Costs: E-commerce eliminates the need for physical storefronts, reducing expenses associated with rent, utilities, and inventory management. It can be more cost-effective to establish and maintain an online presence.
  • Increased Sales and Reach: With the ability to reach a wider audience and employ targeted marketing strategies, e-commerce can drive higher sales and customer engagement. The potential for scalability and growth is significant.
  • Personalization and Customer Insights: E-commerce platforms facilitate personalized shopping experiences, recommending products based on customer preferences and purchase history. Businesses can also gain valuable insights through data analytics to optimize marketing efforts and enhance customer satisfaction.
  • Convenience and Accessibility: Online shopping offers convenience, enabling customers to shop from anywhere, anytime, using various devices. It eliminates the need for physical travel, saving time and effort.
  • Expanded Product Range: E-commerce allows businesses to showcase a larger product range without the constraints of physical shelf space. Customers can explore a wider selection and find niche or unique products easily.
  • Seamless Transaction Process: E-commerce streamlines the buying process with secure payment gateways, enabling customers to make transactions swiftly and conveniently, enhancing their overall shopping experience.
  • Efficient Inventory Management: Digital tools and software assist businesses in managing inventory more efficiently, reducing the risk of overstocking or stockouts. Real-time inventory tracking ensures accurate product availability information.
  • Enhanced Customer Service: E-commerce platforms enable businesses to provide efficient customer support through various channels like live chat, email, or phone, improving response times and customer satisfaction.

Overall, e-commerce revolutionizes the way businesses operate, offering convenience, expanded reach, cost savings, and improved customer experiences. It continues to reshape the retail landscape and drive innovation in the digital era.

Eligibility Requirements
  • Owner or majority owner must be a US citizen
  • Must have US bank accounts
  • Have to be selling for at least 1 year
  • Minimum sales per month has to be $15000 USD