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What Is the Difference between E-Commerce and E-Business?

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  • Written By: Donn Saylor
  • Edited By: John Allen
  • Last Modified Date: 17 July 2014
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The key difference between e-commerce and e-business is the fact that e-commerce is a division of the larger e-business world and encompasses only the external aspects of the electronic business. These external processes include any facets of the e-business that affect customers, suppliers, and peripheral partners. The larger delineation of e-business involves these external processes as well as internal ones. Examples of internal procedures include finance, inventory control, production processes, human resources, and web development.

On a very basic level, electronic commerce means exchanging money for goods or services over electronic networks. But while the actual sale falls under the category of e-commerce, the business of educating, retaining, and attracting new customers is considered e-business. E-commerce is an integral part of the entire e-business strategy, but is only one feature of the e-business plan.

There are several elements to e-commerce and e-business that make them markedly different from one another; though, when working together, one directly influences the results of the other. E-commerce concentrates on only those parts of the e-business with which a consumer, supplier, or external partner will interact. Customer service, sales, order taking and delivery, commercial web applications, and the acquiring of production materials and office supplies are all outward-facing processes and are thus classified as e-commerce.

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For smaller businesses or businesses in the start-up phase, the difference between e-commerce and e-business may not be of major concern. After all, the aim of the new business is to generate interest and sell products or services. But as the company grows, so too does the company's perspective. Issues like customer retention, inventory management, and marketing strategies become paramount to the business's continued success. In a large company, the focus turns to these behind-the-scenes aspects, creating a larger e-business model; if the company fails to concentrate on these aspects, the future of the business could be in jeopardy.

The creation of an electronic business strategy highlights the differences between e-commerce and e-business. This broader scope often means reorganizing an entire business. Pinpointing the right time to undertake such a structural transformation is crucial to its success. New perspectives will be brought on board, responsibilities within the business will change hands, and more thorough understandings of electronic network technologies will be learned.

Internet marketing experts and business specialists tend to agree that having an e-business plan with a solid e-commerce division is vital to the longevity of a business. Even governments have been advised to get into the e-business game. A government's overall plan is referred to as an e-public service strategy, of which e-commerce plays a role.

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Discuss this Article

bear78
Post 3

I'm still confused about the difference between these terms. I looked up definitions and it sounds like normally business is a part of commerce. Isn't commerce is a system or environment and business a pursuit?

bluedolphin
Post 2

I think that regardless of how small or large a business is, everyone needs e-business. E-commerce can't really take place without e-business anymore because e-commerce is just about buying and selling. But in order to buy and sell, many other things have to take place. For example, contacts have to be made, a market and consumer base must be found. And then information about the product has to reach the consumer and a system has to be set up where they will effectively place their orders, pay and receive them.

As a business' consumer base grows, the business has to invest more in e-business to make sure that operations run smoothly and to give greater incentives and satisfaction to the customer. On the other side, the business has to purchase goods and materials at cost effective prices and maintain relationships with sellers as well.

So e-commerce cannot work without e-business. They are not the same thing, but they go together.

SteamLouis
Post 1

I always thought that e-commerce and e-business are the same thing. I still think that they are the same for individual sellers who sell products on online shopping sites. Their operations are very small, so they mostly deal with e-commerce. They take orders and fulfill them, I don't think marketing is even a concern for them, although there are ways for even individual sellers to market their products.

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