Originally Posted by DiEgO_VC

Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as Business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market).

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.

Originally Posted by goodroi

E-commerce is the ability to conduct sales transactions online. This includes selling items on your website.

The benefits of e-commerce is that you are opening new revenue streams. Instead of having a website that only provides information you can have a website that provides information and also offers consumers a new way to purchase from you.

The downside are the security issues with e-commerce. Many e-commerce enabled sites make sales by accepting credit card information online. This credit card information needs to be protected from hackers and other attackers. Other common payment methods used in e-commerce transactions include e-checks and paypal payments.

If you would like to add an e-commerce capability to your website there are many solutions available to you. You can outsource it to a third party website or you can manage the e-commerce on your site. If you manage it on your site you can buy an off-the-shelf software package or design your own solution.