With the boom of e-commerce in the last couple of years, it has changed the way people shop. For most of them, they think of e-commerce as businesses offering services on the internet and consumers checking the sites and clicking what they would like to purchase and have them delivered at their footsteps. This is correct but e-commerce is actually more than just an online transaction.
There are a variety of e-commerce models, each of them is specific to one another. Knowing them gives businesses a certain advantage on how to exactly cater to a consumer’s wants; some businesses even operating in several categories simultaneously.
If you’re starting an e-commerce business, let’s look into an overview of the 4 major types of e-commerce models and evaluate what opportunities and threats you might be dealing with:
- B2B – BUSINESS TO BUSINESS
In Business-to-Business (B2B) type of e-commerce, businesses offer their products or services to other businesses. This is considered as the most traditional type of e-commerce adapted by some companies. One example would be the software industry. Tech giants like Microsoft and Google have created products that are a necessity to other businesses. For example, Microsoft Office proved to be a big hit among office workers as it provided easier access to those working with word processors, spreadsheets, presentations, and publishers. Sometimes, the buyer does not necessarily use the product in the end. In case of office work, it’s the employees.
- B2C – BUSINESS TO CONSUMER
Business-to-Consumer (B2C) is the most common type of e-commerce. Businesses put up their goods online and consumers purchase the products they want from the website. This is usually referred to as online shopping. Consumers can have anything they want or need, be it books, clothes, gadgets, or beauty products with a click of a button and their goods are immediately delivered to their doorstep, doing all without leaving their house. B2C e-commerce empowers the consumers because they have the ability to research the product before buying it. Well-known brands such as ModCloth and Target have employed this type of e-commerce.
- C2B – CONSUMER TO BUSINESS
Consumer-to-Business (C2B) type of e-commerce is not well-known to most people but it saw a steady rise in the past few years. This type reverses the traditional way of exchanging goods. Consumers sell their products or services to big companies. Sites like Upwork or Freelancer provide an online platform for consumers to post their service offerings, making it more accessible for the companies to purchase. This type of e-commerce is also popular in crowdsourcing projects. An example would be a graphic designer who submitted a proposal with some drafts of a logo redesigning and the company purchases it for the website.
- C2C – CONSUMER TO CONSUMER
Taking advantage of how the internet makes transactions more readily accessible, consumers have found it easier to reach out to other consumers to offer their products or services. This defines the Consumer-to-Consumer (C2C) type of e-commerce. Consumers post their offers in popular third party and online platforms such as Craigslist, eBay, or Facebook marketplace in exchange for a small commission fee. Creating a C2C website requires proper planning. The range of the products and services can vary, from selling used books or cars to vintage and antique finds. Buyers have the option to pay thru electronic means such as Paypal.
With this general overview, which of these 4 major e-commerce models fit your idea best? Always remember the importance of knowing your target market and bringing in a unique value of consumer experience. Ask yourself, who are you selling your product to? What is best for your product? And what edge do you bring to the marketplace amongst others? These are ideal firsthand questions to ask and evaluate as you kickstart your e-commerce business journey.