What are the different ecommerce models?
There’s no doubt that e commerce has grown exponentially and continues to grow the same way. Today, we’ve reached an age where an enterprise without online presence is static and dated. But you should be wary of looking at an ecommerce website as something you need to just have in order to fulfill a criterion.
E Commerce is the buying and selling of goods, products and services over the internet, and transactions of money, data or funds made over the internet also come under the purview of Ecommerce. Ecommerce is also known as electronic commerce. The transactions that happen in ecommerce can be done in many ways such as Business to Business (B2B), Business to Customer (B2C), Customer to Customer (C2C), and Customer to Business (C2B). More or less these are known as ecommerce models.
Given that global retail e-commerce reached up to $27 Trillion in 2020.In this article, we will discuss each of these aspects in detail to help you gain a greater understanding of ecommerce, including top solutions for your own business. This section, we are going to talk about all the components that can make ecommerce businesses different from one another.
These components ideally make decisions that you want to make when planning to start your own ecommerce business.
Ecommerce models
Models represent the type of an ecommerce business transaction. Models can be classified into four main categories and this classification is done on the basis of the actors that are involved in each ecommerce transaction. When you start a new business, chances are that you will fall into any one of these models that suits your business.
- B2B business model
- B2C business model
- C2B business model
- C2C business model
- Mixed models
B2B business model
Here the organizations are doing business with one another. Customers are not directly involved. In a B2B business model, a business sells its product or service to another business. Sometimes the buyer is the end user but not necessarily, and, in fact, the buyer resells the product or service to another user.
The B2B model implies a longer sales cycle, but greater order value
B2C business model
Here, the business sells directly to a customer. This is the most popular and common model among existing ecommerce models. Quite a number of methods can be adopted under this model to cater the needs of customers including advertising, Omni channel architecture etc.
The B2C model implies a shorter sales cycles and less order value
C2B business model
This model gives the consumer the flexibility to sell products to business. Freelance artists, writers, and software developers are good examples, as are bloggers, lawyers, and accountants who serve business needs. This model is generally service based given its constriction to be as effective as other ecommerce models.
Similarly C2A (Consumer to Administration), another variant of this model, It’s the same as C2B except the consumer is selling their service to a government agency.
C2C business model
The C2C model facilitates Consumer to Consumer. This is the type of e-commerce that involves individuals selling one another directly.
Companies like Craigslist and eBay pioneered this model in the early days of the internet.
C2C businesses benefit from large scale participation by motivated netizens, but face a key challenge in integration, quality control and site maintenance.
Business to government (B2G)
Business to government (B2G) is when a company markets its products and services directly to a government agency. This agency could be a local, county, state, or federal agency; however, many government agencies will not go directly to an ecommerce website and place an order.
Mixed models
The rapid development of ecommerce has supplemented all types of business requirements, for all business models. This has also made it easier for businesses to follow more than one model at a time, such as by combining B2C and B2B sales on a single website. B2B customers can be given different pricing, different options, and even different products compared to customers that fall in other models.
Eg: Business to business to consumer (B2B2C)
This is an example of mixed ecommerce business models and is known as business to business to consumer (B2B2C). This model is actually a combination of both the B2B and B2C models. In this model a company sells its products to another company that sells the products to customers. An example of a B2B2C arrangement is white labeling
Improve your strategy using business model
Identifying your ecommerce business model gives you an extra advantage over your competition. Once you have identified your suitable business model (that) you need to best serve your customer base, you can concentrate on improving the business network.
