If you're founding an ecommerce business, you'll almost certainly fall into one of these five categories. Each has its own set of advantages and disadvantages, and many businesses operate in many categories at the same time.
Knowing which box your big idea belongs in can help you think about your possibilities and dangers in a more imaginative way.
B2C - Business to Consumer
Businesses that sell to consumers are known as B2C. Because the B2C model is the most frequent business model, it encompasses a wide range of options.
Any purchase you make as a customer at an online business – think clothing, home necessities, and entertainment — is a B2C transaction. A B2C purchase has a lot faster decision-making process than a B2B buy, especially for lower-value products.
Consider this: deciding on a new pair of sneakers is a lot easier than vetting and purchasing a new email service provider or food caterer for your organization.
Due to the obvious shortened sales cycle, B2C companies spend less money on marketing to generate a sale, but they also have a lower average order value and fewer recurring purchases than B2B companies. And B2C doesn't just refer to items; it also refers to services.
B2C entrepreneurs have taken use of technologies such as mobile applications, native advertising, and retargeting to promote directly to their consumers while also making their lives simpler.
B2B - Business to Business
A company selling its product or service to another business represents a B2B business model. The buyer is sometimes the ultimate user, although most of the time the buyer resells to the consumer.
B2B transactions have a longer sales cycle, but greater order values and more repeat orders.
Recent B2B innovators have carved out a niche for themselves by eschewing catalogs and order sheets in favor of ecommerce sites and better specialized market targeting.
Millennials will account for over half of B2B purchasers in 2020, nearly twice the number in 2012. B2B selling in the internet realm is growing increasingly significant as younger generations enter the age of completing commercial transactions.
C2B - Consumer to Business
Individuals can sell goods and services to businesses through C2B firms.
In this ecommerce approach, a website may allow clients to post tasks they need done and have firms compete for the job. Affiliate marketing services are also classified as B2B.
By assisting businesses in hiring freelancers, Upwork was an early developer in this concept.
The competitive advantage of the C2B e-commerce business lies in the price of goods and services.
This strategy allows customers the opportunity to choose their own pricing or have firms compete directly for their business.
Recently, this approach has been creatively used to connect businesses with social media influencers in order to sell their products.
C2C - Consumer to Consumer
A consumer-to-consumer (C2C) business, often known as an online marketplace, links customers to exchange products and services and makes money by charging transaction or listing fees.
In the early days of the internet, companies like Craigslist and eBay pioneered this concept.
C2C firms gain from the self-propelled expansion of motivated buyers and sellers, but quality control and technology maintenance are significant challenges.
D2C - Direct to Consumer
Direct to Consumer is the newest paradigm of ecommerce and trends in this sector are constantly shifting. D2C refers to when a company sells directly to their end client rather than through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C commodity, and social selling via platforms such as Instagram, Pinterest, Facebook, SnapChat, and others is a popular way to sell directly to consumers.