Too often, people would think of an online commercial or sales transaction between a supplier and the consumer when they hear about eCommerce. This is not wrong at all. But also, it isn’t the whole package. There is more about electric commerce that you should know. Besides it being specifically working online, here is what you should know about eCommerce.
One of the things you should know about electric commerce is that it has several models. There are a few types of eCommerce models, but let us focus on the 4 common models;
- Business To Consumer (B2C)
A Business to Consumer model is the most common model of eCommerce. Whenever someone thinks of an eCommerce business, they will think of a B2C model. In other words, these are the “online businesses” that most people talk about. In a B2C model, the selling is offered to individual customers.
B2C sales are the traditional retail models in which a business sells products to individuals. Nevertheless, the business is handed online but not in a physical store.
Marketers and retailers in a B2C model use clear data in multiple marketing tools. They use these to sell their products to the customers online. Conversely, online customers can use shopping carts to get whatever they need. They can fill the shopping cart with as many products as they want or according to the shopping terms/limits of the online store.
Once they get whatever they want in their shopping carts, the customers can make payments through credit cards or e-Wallets. One of the common types of eWallet that customers use to make an online payment is PayPal.
There are some online sites that review several B2C businesses to help customers find a reliable and trusted online platform for buying products.
- Business To Business (B2B)
Even though B2C models are the most common types of eCommerce models, it is the Business to Business models that stream in more revenue. B2B models are the largest in terms of the revenue that flow in. These models bring in trillions of dollars every year.
The main focus of B2B models is to provide products from one business to another. Most of the eCommerce businesses in a B2B model are service providers. Some of the businesses under a B2B model include software companies, supply companies, office furniture, document hosting companies, and more.
Most of the B2B businesses will come with custom enterprise eCommerce platforms that work directly with other businesses. It is important to note that B2B models tend to work in a closed environment. Furthermore, a B2B business will need more startup cash compared to other types of eCommerce models.
In a B2B model, both the sellers and buyers are business entities. In other words, it is a business transaction between a manufacturer and a wholesaler or a wholesaler and a retailer.
B2B transactions have higher volumes compared to other eCommerce transactions. The reason for this is that a typical supply chain will have multiple B2B transactions. The B2B transactions, in this case, will involve sub-components of raw materials. Also, there will be one B2C transaction, which will be a sale of the finished product to the end consumer.
Besides that, there are other benefits of a B2B model, and one of them is that it highly promotes online businesses. Furthermore, a B2B model position trade guides, determines the buyers/suppliers, and promotes import and exports of products/services.
- Consumer To Consumer (C2C)
Also known as Citizen to Citizen eCommerce, C2C involves the online transactions between consumers through a third party. For instance, there can be an online auction, where a consumer posts an item for sale. In turn, other consumers bid to buy the item on sale. Here, the third party will charge a commission or flat fee once the item is sold.
Consumer-to-Consumer models have been created by the rise of the eCommerce sector, along with the growth of consumer trust and confidence in online sales. The C2C sites allow customers to trade, sell, and buy items in exchange for a small commission/flat fee. You will need proper planning and understanding of the entire industry before you open a C2C website.
Some of the top C2C sites include Alibaba, Craiglist, and eBay. In this case, the C2C sites only act as intermediaries to match the customers. These sites will not have the duty to check the quality of products that are being sold on their platform.
A C2C model will facilitate the online transaction of goods and services between the online users. In other words, the web users and transaction parties cannot carry out their transactions without the use of C2C websites.
By the way, there are the Customer-to-Business models that are not as popular as the C2C models. C2B models usually involve projects like crowd-sourcing based projects.
- Peer To Peer (P2P)
A Peer to Peer is a communications model that involves parties with the same capabilities. Either of the parties can start a communication session in this model. This model allows customers to share computer files and computer resources to anyone that need them. There is no need for a central web server in a P2P model.
Recently, P2P models have described apps, whereby users can use the internet to share files amongst each other directly. They can also exchange these files via a mediating server. In some cases, P2P communications will be implemented by offering each communication node both client and server capabilities.
When implementing a P2P model, both sides must install the needed software to offer a mutual platform. Unfortunately, P2P models have low revenue propagation.
So, which eCommerce model are you interested in? Which one will you be going for? Before you decide to go for a specific eCommerce model, it is important to understand the pros and cons of each model. Furthermore, consider the future of your business and relate it to the model that you will be choosing. Keep in mind that not every model will be suitable for you. That is why you should be careful when choosing the right eCommerce model.