In this fast-evolving market, Covid-19 has impacted the way people trade. The world has swiftly shifted to electronic commerce, widely known as eCommerce. Customers and businesses have bid adieu to the traditional stores and traditional trading styles.
Although physical presence fosters a feeling of trust, the online market is slowly but steadily trying to reach the levels of trust that in-stores provide. The rise of the internet has created a whole new channel for selling goods and services across the internet.
A lot goes into eCommerce. It includes dual functions of buying and assembling goods, sourcing and accounting, warehousing and storing, and other internet essentials. There are a variety of options available in the eCommerce business and that’s what makes it harder to choose the correct one.
It is complicated but choosing the best option to develop an eCommerce web or mobile app for your business growth is as important as any other business aspect. Therefore, hiring Top eCommerce Development Company to take your online business to next level is the best idea.
Types of eCommerce business models – What are the characteristics of retailers?
The rapidly changing digitally globalized and technology-driven business world of eCommerce has witnessed some fundamental alterations. This article is an amalgamation of different eCommerce businesses, each of which caters to various business models.
B2C- Business to Consumer
The process of selling services or products directly to the consumers without any mediators or middle persons is known as business to consumer. Anything that we buy online from groceries, wardrobe to entertainment channels is done under B2C transaction.
During the late 1990s in the dot-com boom, B2C became immensely popular. It was mainly used by online retailers to sell products and services to consumers with the help of the internet. By leveraging trending eCommerce business strategies like native advertising, remarketing and mobile apps, Omnichannel presence, personalized experience, voice search, innovators are making the lives of customers much easier.
B2B- Business to Business
All electronic transactions of goods and services conducted between two businesses are encompassed under B2B. Chiefly, the transactions done at a wholesale level are often referred to as business-to-business ecommerce business model.
Selling goods to a business is different from selling goods to an individual consumer as it requires the participation of a bidding process by responding to purchasers’ requests for proposals.
The global B2B eCommerce market is expected to grow at a compound annual growth rate of 18.7% from 2021 to 2028 to reach $25.65 trillion by 2028. A few key players excelling in the B2B eCommerce market are Amazon, eBay, Flipkart, eWorld trade, Flex fire, Kelly search, LinkedIn, Buffer, Skype, and Qualtrics.
C2B- Consumer to Business
C2B is a new growing segment of strategic business choice that can augment a successful venture or function as a company’s entire business model. This is an eCommerce business model where consumers create value for businesses to consume that value.
In short, it allows customers to extract value from businesses and vice versa. It also involves consumers co-creating concepts and ideas with a company by influencing them on social media.
While consumers are in favor of direct payment, reduced price products and flexibility, eCommerce businesses also profit by contributing data, marketing, or naming their own price to the respective company. Because of ready access to customers that are plugged into brands with business relations that are strictly one-directional.
C2C- Consumer to Consumer
Consumer to consumer or customer to customer is eCommerce business model that enables commerce between private individuals connecting people to do business online. It helps both buyers and sellers locate each other facilitating the transaction of services and products between them.
With the lack of wholesalers and retailers, the C2C is a customer beneficiary model that keeps the prices low for buyers and margins higher for sellers. The purpose of C2C is to enable relationships and foster transactions making online interaction between customers feasible.
One of the most prominent examples of C2C eCommerce business model is eBay which has been successful since its launch in 1995.
Mixed eCommerce business models
Business management tasks have been streamlined due to the technological advancements of eCommerce. This has lead businesses to follow more than one model on a single website at a time. It is now possible for online stores to offer wholesaling or specific business-to-business services in a part of the website.
Are there any more eCommerce business model types?
Traditionally, there are five types of eCommerce, but there’s also B2G (Business to Government) and G2B (Government to Business) business models that are often lumped with B2B.
The B2G aka business to government model refers to all transactions related between public administration or government and companies. It involves a substantial amount of services in areas of social security, employment, legal documentation, social security, registry data, and fiscal.
With the government putting in the time, resources, and money for online support and services, B2A services have increased considerably in the past few years. When it comes to legal public administration, the government relies on e-services to reach most people.
The online transactions between individual consumers and government bodies or public administration are referred to as a consumer to administration or government to business eCommerce. This model is strongly associated with the idea of the feasibility of services provided by the government to the citizens. Government encompasses such electronic transactions for services in education, distance learning, social security, health, information and statistics of illnesses, filing returns and taxes.
What do you sell and to what market?
In the value delivery process today, the customer is the center of attention, everything is done keeping the customer in mind. The products and services are and should be designed keeping in mind what are you selling in the market and more importantly who are you selling.
Delivering value to customers includes forming a strong marketing strategy, placing the marketing fix, and finding the target market audience along with other tactics for an extraordinary customer experience.
Value delivery methods- How do you generate revenue?
If eCommerce is a car, then value delivery methods are the engine. This is the part where an edge over your competitors in the retail market is found and a Unique Selling Proposition (USP) is established.
Value delivery methods are simply an approach that helps you design your products in such a way that it gives maximum value to the customer using them. It can be in the form of products, attributes, or additional benefits.
Continue to reading: Types of eCommerce business models
