Ecommerce Business Model

What Are Typical E-commerce Business Models?

Ecommerce platforms have witnessed a surge in the last few years and in the post-pandemic era, the graph is only increasing. In 2020, global eCommerce retail sales increased by 25.7 percent to $4.213 trillion. This digital shift shows a promising development of the eCommerce industry in the future. So, sellers and buyers should be aware of the important business models of eCommerce because online businesses are the future. In this article, you will come across the prominent business models that can help you in expanding your online business.

Ecommerce Business Model

An eCommerce business model refers to how an online company or business makes and delivers products and errands profit. The following are the important business models that help expand businesses.

Ecommerce Business Model

Business to Consumer (B2C)

Business to consumer model is the one in which a company directly sells its products and services to the customers. It is the most common business strategy used by companies. B2C comprises 5 models that are direct sellers, advertising-based, community-based, online intermediaries, and fee-based. When you buy things from stores, purchase medicine from pharmacies, dine at restaurants, the transaction that happens is business to the consumer.

Business to Business (B2B)

As the name suggests, in the B2B model, a business sells its services to another business. This is again divided into two, vertical and horizontal. In the vertical model, the selling takes place within a particular industry. On the other hand, in the horizontal model, the selling happens across different kinds of businesses. 

Business to Government (B2G)

This business model is used by sellers to trade services to government agencies. These websites are verified and approved by the government. This model provides a means for businesses to file application forms to the government agencies that can be local, county, state, or federal.

Consumer to Business (C2B)

Most of the business models have transactions happening from the point of business. However, there is also a business model where the starting point of the model is a consumer. In the C2B model, individuals sell products or services to companies or other businesses. An example can be companies giving access to people to provide services they have expertise in. Some examples of such platforms are Upwork, Upfluence, and Grin. An advantage of this business model is that individuals can set their prices. 

Consumer to Consumer (C2C)

Here, the trade of services happens between consumers. This is carried out through 3rd party websites that provide access to individuals to exchange goods and services. Some of the online businesses that support consumer-to-consumer businesses are eBay, Craigslist, and Esty. This allows individuals or small businesses to sell their goods and services at their prices. 

The Bottom Line

So, the above-mentioned models are some of the important online selling methods that people can follow to sell and buy products and services. Once, the target customers and the specific business model are clear, then it becomes a smooth process to serve the customers.

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