Difference Between Traditional Commerce and Ecommerce

Edited by Diffzy | Updated on: September 22, 2022

       

Difference Between Traditional Commerce and Ecommerce Difference Between Traditional Commerce and Ecommerce

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Introduction

Commerce deals with the purchase, sale, and distribution of goods and services created by industry. "A structured system for the exchange of commodities and distribution of final items," writes James Stephenson. It denotes a trading process, which is the bedrock of modern economic life. Commerce aids in the transformation of things from their point of origin to regions where they are scarce. As a result, it is concerned with delivering goods and services to customers at the correct time and of the proper quality. Trade and trade aids are the two main sorts of activity that commerce is concerned with.

Commerce is defined as the establishment of a large-scale transaction of goods and services for money or monetary value between economic agents such as producers and consumers. It includes any actions that have a direct or indirect impact on the exchange process. It is founded on the premise that everything produced must be consumed. In a word, commerce assures a continual and effective supply and demand for commodities and services in the economy. It should be highlighted that "commerce is a subset of business, not a synonym for it." Commerce includes business, trade, and the movement of goods purchased and sold. Commerce refers to the exchange of goods between countries (international or foreign trade) or inside one country (internal trade) (domestic commerce). In social contact, the exchange of ideas or opinions is rarely referred to as a trade. Students were urged to use the group to express themselves. Commerce is rarely used to refer to the exchange of ideas or viewpoints as part of social contact, as the group fostered intellectual commerce among the students. The phrases commerce and trade are very similar and can be used interchangeably. Trade refers to a broader interchange of commodities and money, whereas commerce refers to big-scale trading on a national or international scale, which necessitates a vast number of trucks, planes, and other delivery means. It also helps to connect the producers of particular goods and services with the people who need them. Because commerce necessitates the completion of numerous operations, it easily produces employment opportunities in fields such as transportation and logistics, finance, and retail.

There are seven different types of commerce business models.

Different sorts of commerce formed as trade and commerce evolved, depending on the type of buyer and seller involved in the transaction. These are the seven most important business models to understand.

  • Consumer-to-consumer (B2C)

A business selling a product to a consumer is known as B2C commerce. For example, if you buy a blouse from a department shop or a pair of new headphones from an electronics store, you are engaging in B2C commerce.

  • Transactions between businesses (B2B)

Businesses offer products to other businesses in B2B commerce. Commodities or raw materials, business products (e.g., laptops for staff), and items purchased wholesale and resold in the retail sector are all examples.

  • Public-Private Partnerships (B2A)

B2G refers to when businesses offer products or services to government agencies (business-to-government).

  • Consumer-to-Administration (C2A)

When an individual consumer gives something to a government agency, C2A commerce is comparable to B2A commerce.

  • Customer-to-Customer Transactions (C2C)

In C2C commerce, clients trade with one another in a decentralized manner. It has risen in recent years, thanks to the advent of marketplaces (e.g., eBay) and resale platforms like Postmark and Thel Real.

  • Business-to-Business (C2B)

C2B commerce is defined by a single customer providing value for a company. Influencers' work may fall within this category. A consumer engaging in a business focus group is another example.

  • Direct-to-Consumer Marketing (DTC)

DTC is a business model in which producers sell their products directly to end customers, bypassing retailers, distributors, wholesalers, and other middlemen. These companies contract their clients directly and learn about their individual goals and needs.

Difference Between Traditional Commerce and E-Commerce in Tabular Form

Table: Traditional Commerce vs. E-Commerce
Basis of Comparison
Traditional Commerce
E-Commerce
Meaning
Traditional commerce is a field of business that focuses on the exchange of goods and services, and it encompasses all activities that promote exchange in some form.
E-Commerce refers to the electronic conduct of business or the exchange of information through the internet.
Customer Interaction
Face-to-face
Screen-to-face
Information Exchange
There is no one platform for information exchange.
Provides a standardized information exchange platform.
Physical  Inspection
Physical inspection of goods is possible before purchasing.
Physical inspection of goods is not possible before purchasing.
Delivery of Goods
Instantly
Takes time

What is Traditional Commerce?

Traditional commerce dates back to the introduction of the barter system in the early millions of years. When money was scarce at the time, the barter system defined the exchange of products for other goods rather than money. This is where Traditional Commerce began and continues to this day in the form of exchanging money rather than products. Traditional commerce has declined in popularity since the arrival of E-commerce in the early twentieth century. Traditional commerce, which is an earlier method of doing business, refers to commercial transactions or information exchange, as well as buying and selling products/services from person to person without the use of the internet. People nowadays dislike this since it takes time and involves physical exercise. Traditional commerce involves two people exchanging products and services face to face. It is, as said in the introduction, one of the oldest methods of purchasing goods and services. Almost everyone does it all around the world. Simply entering in-store or marketplace selecting an item and paying for it. Traditional commerce refers to all of the operations that help a business run smoothly. Trade and trading auxiliaries are the two basic types of acts. Buying and selling goods and services for a profit is known as trading. Banking, transportation, insurance, packaging, marketing, advertising, and other business-related operations are examples of trading auxiliaries. Traditional commerce is defined as all actions that facilitate the exchange of products and services from the manufacturer to the customer. The consumer does not receive things directly from the manufacturer. It passes through many commercial activities reasonably. Traditional commerce is based on regular business hours over a set period. It also necessitates the use of a retail store and the storage of inventory.

Traditional commerce is the activity of selling goods or services in person and through face-to-face interactions. This system has existed since the birth of civilization; the earliest form of conventional trade was the barter system, in which people exchanged things instead of using money or other forms of cash. This has progressed to the point that we now have shops, shopping malls, and other places where people offer items to prospective consumers. These firms are geographically limited and do not cater to a global clientele. The main advantage of traditional trade is that the customer may inspect the product or service for quality, fit, creativity, or whatever the case may be. Because they are personally supporting their local business and helping the community's growth, the consumer also feels a sense of brotherhood. Traditional businesses survive in remote parts of the world where internet access is limited or non-existent, even if they are not open 24 hours a day.

Characteristics of Traditional Commerce

  • Traditional Commerce is the physical purchasing and selling of goods and services.
  • Customers may identify, authenticate, and communicate with merchants in person.
  • It is impossible to keep physical stores open at all times.
  • Physical inspection of products is possible before the purchase.
  • The scope of the business is restricted to a specific location.
  • Supply-side resource focus
  • Linear Business Relationships
  • Marketing is a one-way street.
  • Cash, check, credit card, and other forms of payment are accepted.
  • The majority of things are delivered immediately.

What is E-Commerce?

E-commerce is a newer idea of the business style that refers to commercial transactions or information exchange, as well as buying and selling products/services electronically via the internet. People nowadays appreciate this since it saves time and eliminates the need for a physical location to conduct business. Everything can be done using a laptop, Smartphone, and the internet. The majority of the time and money spent traveling and selecting things can be saved through E-commerce. Any digital channel, such as credit cards, debit cards, digital wallets, and net banking, can be used to make payments. E-commerce enables us to make purchases at any time of day or night with ease. E-commerce makes acquiring goods and services more convenient. Electronic commerce, sometimes known as e-commerce, is a type of new-age commerce in which buyers and sellers connect via the internet rather than meeting in person to buy and sell goods. Commercial firms first gained internet access in 1991, and e-commerce has only grown since then. The majority of urban populations in developing countries and the whole population of rich countries now have access to it. Business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C) are the three main e-commerce business models (or consumer the company). There's also the business to the administrator model, in which a company sells any goods or services to government administration or bodies, and vice versa, where the administrator sells to the company. E-commerce has reached the majority of the target population now that digital devices are available at low rates and there are many competing sellers. This has also made it easier, and the connectedness to the digital world is increasing day by day as a result of the e-commerce industry's efforts. Based on the availability, necessity, and emergence of the requirement of the clients, both E-commerce and traditional commerce models are still popular.

The e-commerce site has taken off, and even individuals who were hesitant to buy items over the internet are now using it. The benefits of this are numerous, including 24-hour availability, simplicity of access given a good internet connection, worldwide distribution, and a broad range of commercial opportunities. The majority of the time and money spent traveling and selecting things can be saved through E-commerce. Any digital channel, such as credit cards, debit cards, digital wallets, and net banking, can be used to make payments. E-commerce enables us to make purchases at any time of day or night with ease. E-commerce makes acquiring goods and services more convenient.

Characteristics of E-Commerce

  • E-commerce is the online trade of products and services where neither the client nor the merchant sees each other.
  • It's open at all times and on all days of the year.
  • Prior to purchase, physical inspection of products is not feasible.
  • The scope of the business is global.
  • Vendors have the chance to expand their business internationally.
  • Focus on demand-side resources
  • Complete business partnerships.
  • Individualized marketing.
  • Payment is usually made by credit card, debit card, or wire transfer, and things take time to arrive.
  • E-commerce offers more convenience in purchasing goods and services.

Difference Between Traditional Commerce and E-Commerce In Points

In terms of the distinction between traditional commerce and e-commerce, the following points are noteworthy:

  • Traditional commerce is a branch of business that focuses on the exchange of products and services and encompasses all activities that stimulate exchange in some form. E-Commerce is the electronic exchange of information or commercial transactions through the internet.
  • Transactions in traditional commerce are processed manually, however with e-commerce, transactions are processed automatically.
  • Traditional commerce only allows for the exchange of products and services for money during working hours. In e-commerce, on the other hand, things can be bought and sold at any time.
  • One of the biggest disadvantages of e-commerce is that buyers cannot personally view the goods before purchasing them; however, if customers do not like the goods after they have been delivered, they can return them within the time frame specified. On the other hand, physical inspection of items is possible in traditional commerce.
  • Traditional commerce's scope is limited to a specific area, i.e., the reach of the business is limited to the neighboring locations where it works. On the other hand, in the case of e-commerce, the company has a global reach due to its ease of use.

Conclusion

Following the preceding discussion, it is clear that both systems have benefits and drawbacks. When you log in to a website, you enter the e-world of shopping, where you can choose a category, specify your requirements, and get the results you need. Traditional commerce is not appropriate for purchasing software or music, while e-Commerce is not appropriate for perishable goods or high-value items. These are the main differences between e-commerce and traditional commerce, and it's important to understand that one cannot exist without the other. These are the main differences between e-commerce and traditional commerce, and it's important to understand that one cannot exist without the other. To put it another way, one cannot replace the other, and even if it could, it would be too expensive or unsustainable for the environment in the long run. Each has advantages and disadvantages. The major distinction between e-commerce and traditional commerce is the platforms used for trade and commercial activities. Consumers save time and money with e-commerce since they can shop from the comfort of their own homes or any location at any time. Traditional commerce requires time-consuming travel to the location/store where goods and services are provided.

References

  1. Power, Michael 'Mike' (19 April 2013). "Online highs are old as the net: the first e-commerce was a drugs deal"The GuardianArchived from the original on 30 November 2016. Retrieved 4 May 2021.
  2. ^ "Four Products for On-Line Transactions Unveiled"ComputerworldInternational Data Group10 (4): 3. 26 January 1976. Archived from the original on 23 December 2019. Retrieved 5 September 2019.

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"Difference Between Traditional Commerce and Ecommerce." Diffzy.com, 2022. Sun. 02 Oct. 2022. <https://www.diffzy.com/article/difference-between-traditional-commerce-and-ecommerce-312>.



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