If you are planning to start your E-commerce store, after deciding what products to sell and who to sell it to, you would want to think about what model you should base your business on.
Here are 6 types of E-commerce business models to run your store.
6 Types of E-commerce Business Models
No.1: Business-to-Consumer (B2C)
B2C business type
B2C is the traditional commerce model and is the top-of-mind model when people think of E-commerce business.
B2C E-commerce is the bridge between the company and the end consumers. E-commerce stores adopting the B2C model sell their products or services directly to individual customers.
Nowadays, you can buy almost everything from a B2C E-commerce store, ranging from clothes, cosmetic products to electrical products, and more.
Instead of going to a physical store, customers browse the website, choose a favorite product based on photos and product descriptions, then place an order. The product will then be delivered directly to them.
No.2: Business-to-Business (B2B)
B2B is also a widespread E-commerce business model. In this model, a business sells its products or services to another business. The customer business could either be the end-user or resell the products to end-users.
For example, a business is also the end-user when they buy software from your E-commerce store and use it for their company, whereas a wholesaler will order goods from your website then sell the end–products to end customers.
Products and services in the B2B sector consist of physical products (furniture, computers) and digital services (software, applications).
No.3: Consumer-to-Consumer (C2C)
Although the C2C model might sound more confusing than those above, it has been growing significantly and becoming familiar with both businesses and consumers.
If you run a C2C E-commerce site, you are playing the role of a third party providing an online platform for users to sell, buy or rent a product or service. You will earn a commission each time a user makes a transaction.
C2C is considered one of the most complicated E-commerce business models to apply as it requires a deep understanding of the law and consumer behavior.
No.4: Consumer-to-Business (C2B)
C2B is also an E-commerce business model that people don’t usually think of, but it is expanding significantly.
A C2B E-commerce website is where individuals sell their products or services to businesses.
The sellers here can be freelance artists selling their creation, freelance writers selling their work or social influencers selling their services.
These freelancers get to name their price; businesses will approach the ones that fit their needs.
In other words, C2B E-commerce sites run transactions between a sole proprietorship and a larger company.
Crowdsourcing projects often follow this model.
No.5: Business-to-Government (B2G)
The Business-to-Government (B2G) model is also known as Business-to-Administrative (B2A).
B2G E-commerce business model allows a business to exchange information and sell a product or service to the government or a public administrative. For example, a public-school buys classroom equipment from a B2G website.
No.6: Consumer-to-Government (C2G)
A transaction on a C2G (also known as C2A) E-commerce website takes place when an individual makes an online payment to the government.
For example, you pay for taxes, tuition fees, health insurance, passport fees, etc. through the government website.
You shouldn’t pay much attention to this model as it will take money from you instead of earning you more.
Now that we have taken you through a tour of 6 different types of E-commerce business models, all you have to do now is choose yourself a perfect fit. Share with us your experience in the comments below.