Types of e-commerce


This is a list of the traditional classification of e-commerce models. These models are based on the 4 different marketing segments. However, nowadays two additional types have been added to this classification.

Business to business (B2B)

B2B e-commerce refers to all electronic transactions of goods and sales that are conducted between two companies. Sometimes the buyer is the end user, but often the buyer resells to the consumer.
This type of e-commerce typically explains the relationship between the producers of a product or and the wholesalers. In addition this can be the relationship between the producers or the wholesalers and the retailers. However the same relationship can occur between the service providers and the business organizations.
B2B typically requires more startup cash and it generally means a longer sales cycle, but higher order value and more recurring purchases. In 2015, Google found that close to half of B2B buyers are millennials — nearly double the amount from 2012. As younger generations enter the age of making business decisions, B2B selling in the online space is becoming more important.
Examples of this model are ExxonMobil Corporation and the Chevron Corporation, Boeing, and Archer Daniel Midlands. These businesses have custom, enterprise ecommerce platforms that work directly with other businesses in a closed environment.
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B2C it is the most common model. It deals with electronic business relationships between businesses, both producers and service providers with end consumers. Many people enjoy this avenue of e-commerce because it allows them to shop around for the best prices, read customer reviews and often find different products that they wouldn’t otherwise be exposed to in the retail world. This e-commerce category also enables businesses to develop a more personalized relationship with their customers. Anything you buy online as a consumer — think wardrobe, household supplies, entertainment — is done as part of a B2C transaction. The decision-making process for a B2C purchase is a much shorter than a business-to-business purchase, especially for items that have a lower value and because of this it had shorter sales cycle. Thus B2C businesses typically spend less marketing dollars to make a sale, but also have a lower average order value and less recurring orders than their B2B counterparts.B2C innovators have leveraged technology like mobile apps, native advertising and remarketing to market directly to their customers and make their lives easier in the process.Examples of B2C businesses are everywhere. Exclusively online retailers include Newegg.com, Overstock.com, Wish, and ModCloth, but other major B2C model brick-and-mortar businesses like Staples, Wal-Mart, Target, REI, and Gap.
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C2B e-commerce is when a consumer makes their services or products available for companies to purchase.
The C2B e-commerce model’s competitive edge is in pricing for goods and services. This approach includes reverse auctions, in which customers name the price for a product or service they wish to buy. Another form of C2B occurs when a consumer provides a business with a fee-based opportunity to market the business's products on the consumer's blog.
For example, food companies may ask food bloggers to include a new product in a recipe, and review it for readers of their blogs. YouTube reviews may be incentivized by free products or direct payment. This could also include paid advertisement space on the consumer website. Google Adwords/Adsense has enabled this kind of relationship by simplifying the process in which bloggers can be paid for ads. Services such as Amazon Affiliates allow website owners to earn money by linking to a product for sale on Amazon. The C2B model has flourished in the Internet age because of ready access to consumers who are "plugged in" to brands. Where the business relationship was once strictly one-directional, with companies pushing services and goods to consumers, the new bi-directional network has allowed consumers to become their own businesses. Decreases in the cost of technologies such as video cameras, high-quality printers, and Web development services give consumers access to tools for promotion and communication that were once limited to large companies. As a result, both consumers and businesses can benefit from the C2B model.
An example of this would be a graphic designer customizing a company logo or a photographer taking photos for an e-commerce website.
Advantages and disadvantages of C2B on an example:
The C2B website offers a Lending Tree advertisement at the top of the page, www.thefreemortgagecalculator.com. The advantage of this website is that the owner doesn't have to sell mortgages, meet with customers, or pay for everyday business operation expenses in order to make money. If the Lending Tree advertisement is used by a visitor, the website owner gets paid a commission from Lending Tree for the lead. The disadvantages of C2B transactions are that one must be well versed in web design to create such a website and the amount of money earned is far less than what could be earned by selling the mortgage directly to the consumer instead.

Consumer to consumer (C2C)

C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction and they typically make their money by charging transaction or listing fees.
These businesses benefit from self-propelled growth by motivated buyers and sellers, but face a key challenge in quality control and technology maintenance.Another customers’ benefit is the competition for products and often finds items that are difficult to locate elsewhere. Also, margins can be higher than traditional pricing methods for sellers because there are minimal costs due to the absence of retailers or wholesalers. Opening a C2C site takes careful planning.
Examples of C2C are companies like Craigslist and eBay which pioneered this model in the early days of the internet.
Generally, the transactions of this model are provided by online platforms, but often are conducted through the use of social media networks and websites.
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B2A, also known as B2G, refers to all transactions between companies and public administration or government agency. Government agencies use central websites to trade and exchange information with various business organizations.
This is an area that involves many services, particularly in areas such as social security, employment, and legal documents.
Hurdles to B2G:
Businesses that are used to interacting with other businesses or directly with consumers often encounter unexpected hurdles when working with government agencies. Governments tend to take more time than private companies to approve and begin work on a given project. Layers of regulation can drag on the overall efficiency of the contracting process.
While businesses may find that government contracts involve additional paperwork, time, and vetting, there are advantages to providing goods and services to the public sector. Government contracts are often large and more stable than analogous private-sector work. A company with a history of successful government contracting usually finds it easier to get the next contract.
An excellent example of a B2A model is Accela; it’s a software company that provides government software solutions and public access to government services for permitting, planning, licensing, public health, and so on.

Consumer to administration (C2A)

C2A e-commerce encompasses all electronic transactions between individuals and public administration.
The C2A e-commerce model helps the consumers to post their queries and request information regarding public sectors directly from their local governments/authorities. It provides an easy way to establish communication between the consumers and the government.
Examples of this include taxes, health, and paying the tuition to universities.