What is e-Commerce? (Simple definition)
- Electronic commerce, e-commerce, or e-Commerce is the variants of one and the same business-related term.
- It stands for firms and individuals buying and selling things over the internet.
How many types of e-Commerce are there?
You’ll need to conduct some research if you want to establish your own e-Commerce firm. Before deciding on a course, you must research the many sorts of e-Commerce company models and websites.
You’ll be able to handle your online store and monetize your business more effectively if you understand e-Commerce.
There are six different types of e-Commerce business models:
- Business to business (B2B)
- Business to consumer (B2C)
- Consumer to consumer (C2C)
- Consumer to business (C2B)
- Business-to-Administration (B2A)
- Consumer-to-Administration (C2A)
👉 Check out this related guide: Top 5 e-Commerce Frameworks and Choosing the Right Model.
What can consumers get?
E-Commerce businesses can offer different physical goods, digital products, or services to their customers.
- Selling tangible things includes dealing with e-Commerce’s benefits and drawbacks. Storage, shipment, breakage, and insurance are some of the most common issues that arise during the physical goods sales process.
- Digital goods or online merchandise include everything that does not require physical transportation and is easily accessible. Online courses, e-books, and other items are routinely purchased by customers.
- Services can be sold online or offline through an e-Commerce company. From software development to locksmith and electrician services, businesses and individuals can discover a wide range of services.
Why customers choose e-Commerce
All forms of e-Commerce enterprises evolve by following in the footsteps of their clients and meeting their needs. It is necessary to provide high-quality products and services. They aren’t enough, though, to effectively gain and retain clients.
Throughout the procedure, customers pay close attention to how they feel. A competitive advantage is excellent customer service.
Customers are drawn to e-Commerce enterprises for a variety of reasons, including improved customer loyalty, decreased labour expenses, and time savings.
Types of E-Commerce Business Models
1. B2B – Business to business e-Commerce
A B2B e-Commerce business model primarily concentrates on providing products from one business to another. Still, many companies in this niche are service providers. You can find a software development company, call centre, HR firm, accounting and bookkeeping services, etc.
One of the most popular e-Commerce company formats is B2B. The buyer in a B2B transaction can be the end-user. Nonetheless, the buyer frequently resells the purchased products to a different customer.
B2B transactions have a lengthier sales cycle, but they result in bigger order values and more frequent purchases. According to some estimates, millennials will account for over half of B2B purchasers in 2020, up from about a quarter in 2012.
The decision to go with B2B over other forms of e-Commerce business models is mostly based on your target audience and desired outcomes. However, you should keep in mind that B2B requires you to put more money into your e-Commerce firm at first.
5 main benefits of B2B e-Commerce:
- More customers
- More efficiency
- A B2B e-Commerce platform enables your business to grow and scale successfully
- Improved brand awareness
- Excellent customer service
2. B2C – Business to consumer e-Commerce
What does B2C e-Commerce mean? When most people think of an e-Commerce business, they think of the B2C domain. It is the most comprehensive market. The classic retail paradigm, in which a firm sells to individuals, is known as B2C sales. In the case of e-Commerce, the commerce is conducted online rather than in a physical store.
What are the benefits of B2C e-Commerce?
- Transactions take place online, which is an efficient cost-cutting method
- You can acquire valuable data from your customers and visitors
- Since a location doesn’t bind your e-Commerce business, you will have more business opportunities.
4 Key differences between B2B and B2C e-Commerce platforms:
- Homepage and its aims
- Customer support requirements & call centre services: B2C e-Commerce requires better customer service and more interactions with consumers
- Target audience and the means to reach out to them is different
- Pricing: B2C retains more consistency when presenting its catalog
💡 Pro Tip for B2C business owners:
Outsourcing customer service is frequently the most effective way to acquire, engage, and keep consumers. When you outsource your customer experience to a third-party service provider, you can save time, receive greater coverage, gain access to more expertise, decrease expenses, and focus on other areas of your organisation. Finding the proper outsourcing provider gives your e-Commerce business a competitive advantage and helps it stand out.
3. C2C – Consumer to Consumer e-Commerce
While most people understand B2B and B2C e-Commerce business models, C2C is a little more complicated. Consumer to consumer is a business strategy that allows private individuals to trade with one another.
Examples: eBay, Craigslist, and Amazon. Venmo and Google Pay are also well-known C2C payment solutions today.
The purpose of C2C e-Commerce is to bring buyers and sellers closer together and make their transactions easier.
Benefits of C2C e-Commerce:
- Sellers can reach a large audience easily
- Lower costs and price flexibility
- Additional comfort for buyers
4. C2B – Consumer to Business e-Commerce
Despite the fact that C2B is becoming more common, it is still one of the forms of e-Commerce enterprises that people don’t instantly think of when researching this issue and market.
A consumer selling goods or services to businesses is referred to as C2B. C2B differs from standard e-Commerce business models in several ways.
Example: Upwork – where individuals who are experts in specific fields can sell their services to businesses.
3 Key benefits of C2B e-Commerce:
- Increased market reach
- A better understanding of consumers and their needs
- A more friendly and approachable tone that influences the sales process positively
5. B2A – Business to Administration e-Commerce
Also known as Business to Government (B2G).
B2A (or B2G) refers to transactions between businesses and government agencies.
B2A Examples:
- Some software companies (outsourcing development) that provide services directly to the government
- Legal and employment information distribution
- Logistic data
6. C2A – Consumer to Administration e-Commerce
B2A and C2A are two forms of e-Commerce business models that are comparable. Both are aimed at collaborating with governments or government agencies.
C2A refers to online electronic transactions between individuals and government agencies. It makes it easier for consumers to communicate with the government or administration.
C2A Examples:
- Electronic tax filing
- Health services payments
- Online learning
- Social security information
Get familiar with the types of e-Commerce business models
As previously stated, before launching a business, make sure you understand the benefits and drawbacks of each sort of e-Commerce.
External finance will almost certainly be required to grow and scale your e-Commerce business. You may also require support in certain situations. Outsourcing may be the best option for achieving long-term success and greater revenue.
Finding the right BPO firm can help you improve the quality of your products or services, save time to market, and significantly raise client lifetime value.
👉 For more insights, visit: Top 5 e-Commerce Frameworks and Choosing the Right Model.
