We have seen a lot of expansion and change in the retail business over the past few years mainly because of the revolution of eCommerce. A proven potential threat to traditional Malls. Amazon started selling books in 1995 but that was not enough to draw customer’s attention in the beginning. However, according to data provided by the US Commerce Department in 2014, Americans spent approx $304.9 billion alone while shopping online. That is the extent of eCommerce evolution, bringing “Real Change” in the Shopping Industry.
Joel Anderson, CEO of Walmart once said: “You can’t just open a website and expect people to flood in. If you really want to succeed you have to create traffic.”
Traffic on the website depends on the type of eCommerce you are running. Therefore, in order to generate more traffic, you first need to understand the type of business before engaging in any type of eCommerce activity.
Types of Ecommerce Business models
If you are operating an eCommerce Business, you can be categorized in any of these four traditional Business Models. Apart from these traditional ways, eCommerce Business can also be categorized based on their revenue models.
Let’s take a look at the most common ways i.e. Traditional business Models.
1. B2C (Business-to-Customers E-commerce):
B2C business models are the most common eCommerce model and in general, most users think of the B2C Model while talking about eCommerce business. B2C can be termed as a traditional retail business where you sell the product to an individual. The catch: Business is conducted Online rather than in a physical store.
Examples of a B2C model are everywhere: from purchasing clothes to home appliances. B2C not only includes purchasing goods online but services also. Subscribing to Gym membership online to ordering food, or availing home services like plumbing or lawn mowing, all fall under the B2C modal, befitting both the consumer and the business.
2. B2B (Business-to-Business Ecommerce)
A B2B business model is selling your products or services to another business. In the following, the buyer can act as a retail agent who then lends it’s services to customers, or sometimes the buyer can act as the end-user. Unlike B2C, B2B has a longer sales cycle and more repetitive purchases.
Most of the time the B2B businesses are service providers, but we can also find Software organizations or wholesale product corporations, and other companies selling their products in this niche. Typically a B2B eCommerce business costs a lot to run successfully due to the workforce and infrastructure.
3. C2C (Customer-to-Customer eCommerce)
C2C eCommerce business model represents the selling of products from one consumer to another consumer online encouraged by a third-party vendor. These sites permit users to list, buy, and sell their products within their platform and generate revenue by charging a commission fee or listing fee.
The most common example of this is eBay and Craigslist. A C2C business can be very useful for small business vendors. They will be able to avail larger margins for their products due to the absence of wholesalers and retailers.
4. C2B (Consumer-to-Business Ecommerce)
C2B business as the name suggests permits individuals with skills to sell their services or products to companies. This business is the best fit for freelance. Elance, now Upwork was the first C2B eCommerce website.
C2B business can power the name of Individual creators. We can see the work of the C2B model in Blogs or forums where the creator provides an advertisement or link back to business easing the sale of their products or it can be seen in the influencers marketing where websites connect business to social media influencers in order to create a hype around their product.
We’ve covered the most common eCommerce Business models present out there. If you are running or planning to start an eCommerce Business you must be aware about these business models around eCommerce. Grasping the knowledge behind these business models will help you in understanding your audience demands and generating greater traffic over your website.
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Ashley Brown works as a Sr. Magento Developer at AgentoSupport, a leading Magento eCommerce development company. She is growth-ambitious and prefers to educate people about eCommerce and Magento 2 development. When not working, she loves to travel and explore new ideas whenever she finds time.