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12.2 E-Commerce Business Models
Both businesses and consumers are riding the e-commerce wave. There are four common
e-commerce business models: business-to-consumer, business-to-business, consumer-to-
consumer, and business-to-government.
Business-to-Consumer (B2C). Most of the business-to-consumer selling takes place
in online stores. Some, like ( are online only.
Others are click-and-mortar—electronic storefronts for well-known brick-and-
mortar stores such as Sears (
Business-to-Business (B2B). E-commerce between two businesses often takes the
form of exchanging business supply chain information among vendors, partners,
and business customers. Electronic Data Interchange (EDI) is also in this category.
Consumer-to-Consumer (C2C). Individuals are selling to each other on the Internet.
The most common format is that of the auction. The most well-known auction
site is eBay (, which was founded in 1995.
Business-to-Government (B2G). Businesses are selling to the government on the
Internet. There are very strict usability standards for businesses targeting govern-
mental agencies. Section 508 of the Rehabilitation Act requires that electronic
and information technology (including Web pages) used by federal agencies is
accessible to people with disabilities. See for more
Businesses began exchanging information electronically many years before the Web
came into existence, using Electronic Data Interchange.
12.3 Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI) is the transfer of data between companies over a net-
work. This facilitates the exchange of standard business documents, including purchase
orders and invoices. EDI is not new; it has been in existence since the 1960s.
Organizations that exchange EDI transmissions are called trading partners.
The Accredited Standards Committee X12 (ASC X12) is chartered by the American
National Standards Institute (ANSI) to develop and maintain EDI standards. These
standards include transaction sets for common business forms, such as requisitions and
invoices. This allows businesses to reduce paperwork and communicate electronically.
EDI messages are placed in transaction sets. A transaction set consists of a header, one
or more data segments, which are strings of data elements separated by delimiters, and
a trailer. Newer technologies such as XML and Web services are allowing trading part-
ners virtually unlimited opportunities to customize their information exchange over the
Now that you are aware of possibilities of e-commerce and the types of business
models, you may be wondering where the most money is being made. The next section
discusses some statistics related to e-commerce.
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