Electronic marketing is an important facet of the sales strategy for an increasing number of businesses. Statistics Canada reported in November 2018 that Canadians spent more than $12.8 billion in online purchases in 2017. The U.S. Census Bureau shows that online sales topped $30 million in the first quarter of 2019 alone.
Businesses trying to make the leap from a physical presence to one online benefit from an understanding of common electronic marketing terms and their definitions. Online business, marketing, software, and technology are constantly changing; to succeed, online entrepreneurs must be informed. The following terms are separated into several categories for easy reference.
B2B Electronic Commerce Definitions (Business to Business)
- B2B E-Commerce- The exchange or sale of goods electronically between firms or businesses.
- Co-Branding- The practice of two companies advertising a partnership or affiliation by displaying each others logos or other branding messages on company websites or other online profiles.
- EDI (Electronic Data Interchange)- The electronic flow of information between two companies involved in B2B e-commerce, or within a company engaged in online business.
- EMC (Export Management Company)- A firm that acts as an intermediary or manages exports for other firms.
- Freight Forwarder- A firm that handles shipments for other firms.
- Trading Partner- in e-commerce, any entity that participates in transactions with other companies or businesses.
- Vortals (Vertical Industry Portals)- Gateways to industry-specific information.
- Yellow Pages- In e-commerce, an online directory of the electronic addresses of businesses compiled by industry.
B2C Electronic Commerce Definitions (Business to Customer)
- CRM (Customer Relationship Management)- A multi-level process including pre-sales, sales, and service relationship.
- Service Provider- An online business or individual selling services rather than products.
- Shipping Confirmation- a message confirming to customers that an order has been sent.
- Storefront- A website designed to showcase products and allow customers to purchase online.
E-Commerce Software and Technology Definitions
- Certificate Authority- A third party company that issues certificates verifying the identity of a company or individual, which is critical in e-commerce.
- Encryption- The transformation of sensitive data to prevent its theft online.
- Etail- Online retail, generally applied to storefront websites selling products to customers.
- Secure Servers- Servers that encrypt data to prevent its theft or interception.
- Shopping Cart- Software that tracks a customer’s selected items and transfers them to the checkout.
- Turnkey- An application with little customization needed; often refers to an e-commerce website or shopping cart system.
E-Commerce Transaction Definitions
- ACH (Automatic Check Handling)- A form of electronic payment where funds are cleared by wire transfer or through a clearinghouse.
- Chargeback- The reversal of a credit card charge due to refund or fraud, typically incurring a financial penalty against the merchant.
- E-Check- A payment method that debits funds directly from the customer’s bank account.
- Merchant Account- An account designated for credit card and other online payment transactions.
- Payment Gateway- Intermediary between merchant and bank in online transactions.
- Swipe Discount Rate- A discount by merchant account providers when credit cards are available for inspection to reduce the risk of fraud.
For more information on online payment processing, click here. Launching an online business offers greater room for expansion; however, this increased opportunity comes the need for careful planning. The above-listed terms are a great starting point and should give new online entrepreneurs the confidence to continue researching and planning their foray into e-commerce.