From cost reduction and flexibility to affordable marketing and faster buying processes, e-commerce is an invaluable business model today. Various businesses are now considering this move. However, it would be best first to understand the types of e-commerce in the market. This way, you can be more innovative and defy expectations. These types include the following.
Business to Business
Also known as B2B, business-to-business e-commerce involves one business selling products to another. The buyer could be an end-user or an intermediary, reselling the item to an end-user. The channels here often include producers and wholesalers dealing with retailers.
While this model has a higher order value and more recurring purchases, it features a longer sales cycle. Excellent SEO will come in handy to boost this model. Perhaps you’ll need to invest in an SEO checker tool.
Business to Consumer
You could also refer to this e-commerce model as B2C. It requires a business to sell its products and services directly to the consumer. This model is the most prevalent today, thanks to the convenience and flexibility it offers to the consumer.
It allows the consumer to compare different products and get insights into what they offer. The goal is to make a more informed decision in the long run. Enough information will also ensure that the consumer wastes no money on less meaningful items. This e-commerce model has a relatively shorter life cycle. This aspect implies that it will not spend so much on marketing and ads. In addition, the items are often of a much lower value.
Consumer to Business
Consumer-to-business e-commerce is also referred to as C2B. Here, a consumer or an individual will sell their products and services to a business. In this case, a website might enable customers to post their work, allowing companies to bid on them.
Various businesses have embraced this model. It is now a favorite for freelancers and remote workers, including marketing agencies, content creators, and influencers. For instance, online marketing sites, including Google Adsense, allow consumers to post their contextual ads on their sites. Companies bid on such. Most experts equate C2B businesses as sole proprietorships serving a larger company. Reverse auctions and service provision sites are examples of this arrangement.
Public Administration E-Commerce
Public administration e-commerce involves businesses or individuals working with the government or administration. It could be either B2G or C2G. B2G e-commerce is where a business sells its services or products to the government or administration. You could also refer to it as B2A. For example, contractors could sell their skills and services, including building roads, to the government. The government will need to vet your abilities and services before getting a contract. That means the process could be time-consuming.
On the other hand, C2G is where consumers sell their services to the government. You could also refer to it as C2A, consumer-to-administration. An example is when individuals pay fees to a university. Paying taxes to the government is yet another form of C2G e-commerce.
Notably, public administration e-commerce enjoys significant popularity. You could attribute this to the confidence people have regarding payment. You are always sure of getting your dues in the long run. However, expect intensive documentation and labeling during this process.
Consumer to Consumer
Consumer-to-consumer e-commerce, also called C2C, is a common model used by consumers. Most people consider it an online marketplace, where consumers exchange goods and services at a fee. Ideally, it is a website where consumers list or advertise their items, including properties, expecting another consumer to buy them.
A third party conducts the transactions here. This third party will provide the platform to list or source products from other consumers. Unfortunately, quality control is a big nightmare on C2C e-commerce platforms.
Dropshipping is one of the simplest e-commerce models today. This form of business allows you to set up a storefront, where you can take your customers’ money through online payment services and credit cards. Your supplier will then need to deliver the product to the consumer. This business model is straightforward and cost-effective, cushioning you against multiple expenses, including warehousing and inventory management.
In conclusion, various forms of e-commerce are at your disposal. Each option offers you specific services and structures. Understanding the e-commerce structure that suits you will help enhance your growth.
Direct to Consumer
Direct-to-Consumer or D2C is when the product maker sells the product directly to the end consumers. The traditional supply chain of a company involves a supplier, manufacturer, wholesalers, several distributors and retailers. Thus, the sales include time-consuming negotiations at every stage of production and delivery and consequently, it takes a longer time for product launch.
In the D2C e-commerce model, companies cut the middleman, wholesalers, distributors and decided to sell the products directly to their consumers. They also have more pricing flexibility than the retailers and companies can better control the brand’s value.
White labeling is when one company produces a product or service and another company rebrands it to make it look like they have produced it. It’s a legal protocol where white labeling is used depending on the manual procedure of whiting out something previously written to write over it again.
It’s a common practice mostly used for generic products like consumer products, electronics and software packages. For example, the grocery stores buy a product from other brands, add the stores’ names on the label and sell it to their customers at a slightly lower price. The same method is applicable for software also.
There’re certain advantages of it like saving time, gaining customer loyalty and building brand credibility. However, if something goes wrong with the product, it may degrade the original brand’s value and production.
Business to Government
Business to Government (B2G) is the marketing of a company’s products and services to the local, state, county or federal agency. B2G business can be considered as a small business offering IT services to the government. It’s done through annual budget, Request for Proposals (RFPs) and different types of solicitations.