Earlier, people used to purchase many things from brick-and mortar stores. With the introduction of eCommerce, various people have taken their business online by building eCommerce stores. People are now addicted to purchasing most essentials and non-essential things from online stores.
All the businesses that have become successful online have their own eCommerce business model. By following a suitable eCommerce business model, they can reach a wider audience and generate good revenue.
If you want to leverage this growing industry, take your business online with the help of an eCommerce store. While jumping out excited about starting a store, you should remember one of the essential things, i.e., the eCommerce business model.
We have been delivering some of the best eCommerce stores to businesses worldwide. Hence, we are familiar with eCommerce businesses.
Here, we will provide you with the most common types of eCommerce business models and how to choose a suitable one for your business.
Before we move on, let’s start with the basics.
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An eCommerce business model describes how eCommerce businesses sell products and services online. Companies use different types of eCommerce business models to reach their target audience and grow their business.
Here we will briefly understand the standard eCommerce business models worldwide.
The B2B model of eCommerce involves businesses selling products and offering services to other businesses. In this model, a business must conduct network marketing to reach a wider audience. Moreover, you need the required strength to showcase your product or service is worth consumers’ needs.
The main benefit of the B2B model is a longer sales cycle, higher-order value, and recurring orders. This B2B model is in various eCommerce businesses like software, office furniture, and more.
Some successful businesses following this eCommerce model are Samsung, Alibaba, General Electric, etc.
If you have the necessary budget and think your product can satisfy the needs of the business, go for this model.
Enterprises that follow Business to Business model (B2B):
As the name suggests, the B2C model involves a business and a customer. It is the most popular business model where a business sells products or services directly to the customers.
When a customer purchases any product or service online, it’s a B2C transaction.
In this model, a customer’s decision-making process is short compared to the B2B model purchase as the price is low. Secondly, a business following this model has a shorter sales cycle, lower-order value, and fewer recurring orders.
If your product or service targets a specific audience, you should adapt the B2C model for your business. In this model, you need good marketing to reach the audience. A customer discovers your website and checks whether the product fulfills the core needs.
The customer can browse the entire website and decide whether to buy from your store. The customer’s buying decision depends on many factors. And one of the most important factors is eCommerce personalization. Some examples of B2C businesses that offer personalization are Amazon, Target, etc.
Enterprises that follow Business to Consumer model (B2C):
Unlike B2C and B2B business models, the C2C model is somewhat different. It has been in discussion with the increase in consumer confidence in eCommerce.
As the name suggests, the C2C model connects consumers via an eCommerce marketplace and allows them to buy, sell, or trade their products or services in exchange for some commission.
Some of the most successful sites following the C2C model of eCommerce are eBay and Craigslist. Other than these, there are a lot of eCommerce sites that have failed miserably in this model. This is because businesses following the C2C model fail to plan well and face some legal issues. Secondly, they have to invest heavily in quality control and technology maintenance to offer customers a smooth experience.
Enterprises that follow Consumer to Consumer model (C2C):
C2B is less popular than other types of eCommerce business models. However, it is gaining a lot of attention from consumers and growing progressively. In this model, the consumer sells goods or services to the businesses. In other words, C2B is a sole proprietorship serving various businesses.
The consumer has complete control over the price and audience he wants to sell the products or services.
Elance(now freelancer) is one of the first platforms that adopted the C2B model. The model serves all the needs of freelancers. Besides this, reverse auction sites and affiliate networks fall under the C2B model.
Enterprises that follow Consumer to Business model (C2B):
Business to Government or Business to Administration is a model in which businesses sell products or services, or information to the government for a specific time.
It is an eCommerce business model where a business needs to bid on government projects or products that the government may buy for their organization. There is a possibility that public sector organizations can place bids on the platform. These bids happen on the web via real-time bidding.
One of the famous examples could be a SaaS company that maintains the entire government data for a specific time. Likewise, startups with a product or service that benefits the government can opt for this model.
Enterprises that follow Business to Government model (B2G):
Consumer to Government is also referred to as the Consumer to Administration model. This eCommerce business model is somewhat like B2A.
In this eCommerce business model, the consumer directly transacts with the government by sharing a specific detail on the website. It could be anything, for example, paying bills like water or electricity. Other than this, it could be that a consumer is offering feedback to the government about a specific service.
As the name suggests, one business sells its product to another in business-to-business-to-consumer. Then this other business sells that product to the final consumer by rebranding.
The most common example of a B2B2C eCommerce business model would be when a wholesaler sells products to retailers, and retailers then rebrand the products and sell them to the consumer.
Enterprises that follow Business to Business to Consumer (B2B2C):
We have already looked at the most well-known eCommerce business models. Now we will help you to choose the best one for your business.
You must conduct thorough research to understand the target audience’s problems and think of a way to provide more value through your product or service.
It is essential to choose the proper eCommerce business model. Because once you have selected one, you will spend a lot of money and time. Therefore, you need to ask basic questions to yourself before choosing one.
Here we have given a few examples.
So far, we have looked at the most popular eCommerce business models and examples. Besides this, we have also looked at the 4-step process to choose the suitable eCommerce business model.
Now, it’s your turn to choose a suitable eCommerce business model. Get in touch with us if you still have any doubts about eCommerce business models.
Webdesk Solution is a professional eCommerce development company. We have a highly talented team of developers who have created small to big eCommerce sites for clients worldwide. Hence, we can understand your idea well and help you choose the best eCommerce model and integrate it into your website to reach a wider audience and become successful.
The most common eCommerce business models are B2C (Business-to-Consumer) and B2B (Business-to-Business), with B2C being the most widely adopted model.
Well, it depends on various factors like industry, market, and target customers. However, B2B (Business-to-Business) eCommerce is generally considered the most profitable model due to the high volume of transactions and the larger order values involved.
Generally, a B2B eCommerce business model can have lower risks. In B2B transactions, there are usually larger orders, established business relationships, and fewer customers, so demand fluctuations and customer behavior are less likely.
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