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E-commerce, also known as electronic commerce, is the buying and selling of goods or services over the internet. It includes online retailing, business-to-business transactions, and the facilitation of transactions between consumers through electronic platforms. It allows businesses to reach a global audience, sell products and services around the clock, and offers consumers a convenient and efficient way to shop.

E-commerce has revolutionized the way businesses operate, and it has become an essential part of many companies' business models. Some of the most popular e-commerce platforms include Amazon, eBay, Etsy, and Shopify.

E-commerce can improve a firm's profit margins in several ways:

  • Reduced overhead costs: E-commerce eliminates the need for brick-and-mortar stores, reducing expenses such as rent, utilities, and staff.
  • Increased sales volume: E-commerce provides access to a larger customer base, potentially increasing sales volume and revenue.
  • Lower inventory costs: E-commerce allows for better inventory management, reducing the cost of holding excess inventory.
  • Reduced marketing costs: E-commerce allows firms to reach potential customers more cost-effectively through online advertising and social media marketing.
  • Increased operational efficiency: E-commerce platforms can automate many business processes, such as order processing, fulfillment, and customer service, leading to increased efficiency and lower operational costs.

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