E-business and e-commerce are terms that are sometimes used interchangeably and sometimes they’re used to differentiate one vendor’s product from another. But the terms are different, and that difference matters to today’s companies. 

Definition of E-Commerce: E-commerce is “any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods and services,” defines the U.S. Census Bureau. Transactions aren’t required to have a price and include both sales and items like free downloads. E-commerce includes transactions made on the internet, Intranet, Extranet, World Wide Web, by e-mail and even by fax. 

Definition of E-Business: E-business is broader than e-commerce; including the transaction based e-commerce businesses and those who run traditionally but cater to online activities as well. An e-business can run any portion of its internal processes online, including inventory management, risk management, finance, human resources. For a business to be e-commerce and e-business, it must both sell products online and handle other company activities or additional sales offline. 

• E-commerce covers outward-facing processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating expense items, such as office supplies. E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. 
• E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity and cost savings than ecommerce. 
• Scope of e-business is wider than e-commerce.