6 Best Ecommerce Business Models Described

Cody H. is selling a 2000 Ford Mustang with 140,000 miles on Letgo, a mobile peer-to-peer classified app. The asking price is $2,200, but he is prepared to negotiate for a speedy sale. Cody and his potential clients are participating in a favorite ecommerce business model: consumer-to-consumer.

C2C ecommerce can and does seem an awful lot like regular business-to-consumer ecommerce or even B2C revenue generally. Here’s an example.

Giovanni, my son, found Cody’s listing shortly after 10 a.m. on a Wednesday. Gio is off of work on Wednesdays and, like most of his friends, he’s more comfortable buying used car within an app like Letgo than he’s scouring a printed classified or seeing a used car dealer. Five months ago, he purchased a 1999 Sebring on Letgo for $600.

He plans to purchase something a bit nicer and then list the Sebring on Letgo and attempt to get as much of his investment back as possible.

Giovanni might have had a business-to-consumer transaction, not a C2C. Rather than using Letgo, Gio might have gone into a used car dealer. He’d have test driven a car, and, possibly, even exchanged his Sebring in for something a bit nicer.

C2C is unique because every party is a”consumer” and, in a different transaction, their functions may be reversed.

In this guide, I will briefly explain six ecommerce business models, such as B2C and C2C.

Business-to-consumer

When you consider ecommerce, you likely think about the B2C business model. It’s just retail sales made from a business entity to an individual. A lot of Amazon.com uses this version. Virtually every entrepreneur utilizing BigCommerce, Shopify, or a similar hosted ecommerce platform is also likely to be focused on B2C ecommerce.

Within the B2C ecommerce version, there are subcategories, if you will. For instance, you might have a B2C subscription company such as Stitch Repair, Dia&Co., or BarkBox.

B2C ecommerce has become the most familiar because it’s successful. In accordance with Statista, ecommerce earnings (essentially B2C) could reach $5.6 billion from the U.S. in 2019.

For many entrepreneurs, the B2C ecommerce model are the easiest to begin and also the most successful overall.

Business-to-business

B2B trade is a transaction between two companies. In the broadest sense, B2B sales are significantly larger than B2C because this business model contains any type of wholesale transaction. Increasingly, B2B buyers are using ecommerce.

3dcart, an ecommerce platform, outlined several reasons for the rise of B2B ecommerce at a 2018 post . These include:

  • Self-service. Re-ordering from an ecommerce site can be more effective than faxing in orders, which, believe it or not, is the number of firms still do it.
  • Mobile. An ability to test on orders or even place orders from a mobile device.
  • B2C-like shopping adventures. B2B buyers are accustomed to B2C attributes and convenience to their personal shopping needs. Thus B2B ecommerce Should feel like B2C.

If your clients include companies, provide a fantastic B2C experience.

Business-to-government

Closely associated with B2B ecommerce is your business-to-government model. With B2G, a government entity is your client.

It’s typical for B2G earnings to be based on negotiated prices and include a vetting procedure wherein sellers must meet specific requirements. Additionally it is possible that B2G ecommerce sales will occur on a government-managed ecommerce website, wherein suppliers supply a product feed. In a sense, this is very similar to posting products on a market.

B2G ecommerce may be a stable channel for sales, but establishing that station may take much time and energy.

Consumer-to-consumer

From the C2C model, people are selling directly to one another. Consider again the earlier instance.

The Letgo app provides a way for customers to post items for sale, like a Ford Mustang, and then provides a messaging system to permit sellers and buyers to communicate before they attempt to complete a sale. Giovanni exchanged about a dozen messages with Cody H. before going out to find the vehicle.

EBay is a more familiar case of C2C ecommerce. The eBay market, which opened in 1995 as AuctionWeb, joins individual sellers and buyers and facilitates an internet transaction.

C2C ecommerce may be a fantastic side business for new entrepreneurs.

Government-to-consumer

The government-to-consumer model clarifies when a government or public sector entity utilizes ecommerce to sell goods or services to customers.

For instance, at many high schools, parents pay for school lunch, sports fees, and late library fees via online portals.

For entrepreneurs, the G2C version is a chance if you create the ecommerce program. Otherwise, it is unlikely you could use this model.

Government-to-business

The previous business model on the list is government-to-business. This version can often take the kind of online bill payments, tax payments, or the payment for government services.

Much like G2C, entrepreneurs at the G2B model provide services or software around the transaction, as opposed to providing the actual goods or services.

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