Buying and selling online
The internet can open up new opportunities for your business to buy and sell goods or services online. Such activities are generically referred to as e-commerce.
The business relationships supported by e-commerce can be broadly split into two main categories:
- business to consumer (B2C) - selling products or services directly to individual consumers
- business to business (B2B) - selling goods or services to other businesses
Selling goods in a B2C environment typically requires a website with an online shop front. Consumers anywhere in the world can browse your online shop. When they decide to make a purchase, they proceed to an electronic checkout where there will be some form of payment processing function. This will typically be via a merchant account set up through an acquiring bank which is capable of processing credit and debit cards. Alternatively, you may wish to use a payment-processing provider to manage your online payments. See our guide on accepting online payments.
There are security implications associated with the acceptance of credit and debit cards.
One of the most significant B2B developments has been the growth of online auctions. These are computerised versions of traditional auctions where prices are set by buyers bidding against each other. For example, an online auction might specialise in services for buyers and sellers of chemical feedstocks, chemicals, plastics, and related products.
There are two main types of auction:
- forward auctions - lots are sold to the highest bidder
- reverse auctions - suppliers compete on price and the lowest bid for a tender wins the business
Another B2B development is the e-marketplace. This is a website where buyers and sellers trade goods and services online. Such sites vary according to the size and number of companies using them and the type of commodity traded. For more information see our guide on e-marketplaces, online auctions and exchanges.