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E-Business definition

E-Business (© SFIO CRACHO /

E-Business (© SFIO CRACHO /

Many people struggle with the term e-business, not really understanding what the definition is and how it differs from ecommerce. In this article, we are going to define the term and give some examples, as well as explore some of the advantages of e-business and everything that you need to know from the perspective of a marketing or advertising professional. E-business is a big topic but it is also an important one.

The Definition of E-Business

So, the first thing that we’ll do is actually define the term “e-business.” E-business is anything that you do online, from holding meetings to sharing files. E-business is the conducting of business on the internet and it encompasses a great deal. However, you don’t want to confuse the term with ecommerce, which is a little different. Ecommerce generally refers to the buying and selling of products on the web; e-business refers to pretty much everything else.

The term “e-business” was first used by IBM in 1996, when the company began to use their knowledge in internet technology to offer solutions to businesses wanting to get involved in the web from a business perspective. IBM created the term “e-business,” hoping that it would catch on and they would be established as a leader in a brand new field. In fact, the company was willing to invest up to $1 billion in this new branding.

The Advantages of E-Business

Let’s talk about some of the advantages of e-business. There are a number of them, and understanding why e-business is so important will allow you to understand the term better.

First, when you do business online, all of the marketing that you do is cumulative, which makes it much more cost effective than other types of marketing. The marketing efforts that you do usually end up being long-term; even PPC advertising can have some long-term benefits. All of your marketing has the single goal of sending traffic to your business website and there are so many marketing methods out there; many that are not only cost effective, but also give you a permanent boost to your rankings and traffic.

In addition, doing business online has the advantage of an unconventional schedule. Many of the things that you do to keep your business going that are done over the web can be accomplished according to your schedule. Of course, the corollary is that there are some times when that schedule may not be convenient, such as a Skype meeting with someone from a foreign country at 2 a.m. your time. But 90% of the time, doing business online allows you incredible freedom as to your schedule.

You also lose any geographic limitations that you had with a brick-and-mortar business. Not only is your customer base going to grow from a local geographic area to all over the world, you can also hire people to telecommute and work for you from anywhere in the world.

You also have lower costs for just about everything. The first thing that comes to mind is obviously overhead. You don’t have to pay rent on a retail location, you don’t have to pay insurance and you don’t have any utility costs – other than your own electricity and internet at your home, which you would be paying anyway. You do not have to furnish your retail location – something that can costs tens of thousands of dollars depending upon the type of retail business – and you do not have to pay employees to work in your store. In fact, your website can run 24 hours a day without someone manning the desk. But you also have reduced transaction costs, and this can be huge. Many retail locations pay expensive credit card transaction fees, interest on loans and other small costs that add up to big money. You don’t have to pay as much for these with an e-business.

How to Start Doing Business Online

Obviously, starting to do business online will be different for each type of business. An investment firm will have many different costs and require very different tactics and actions than a retail store. If you already have a business, then you may have to look up specific information on how to transfer that business online. But for many brick-and-mortar businesses, transitioning online isn’t too complicated. It depends upon what is involved with your business already.

For example, it can be easy to move communications online, as well as hire employees to work remotely for some things. But if you have a retail location, then you have a great deal of work ahead of you if you want to start selling your current inventory online. In fact, there is so much work involved, that you may find it easier and much less expensive to simply start selling something new. Of course, if you have a warehouse full of items that you need to sell, then this is not practical.


The bottom line is that e-business has lots of advantages and not very many disadvantages, which is why so many people are transitioning to online stores. If you can move your business online, then you probably should, especially if you are struggling in today’s economy. There are lots of free tools and information out there that will allow any brick-based business to open an ecommerce website and market their business effectively online if you know where to look for them.


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