Sep 7, 2023, Business

6 types of eCommerce models for business

Maria Baryluk Junior Online Marketing Specialist
Online services, primarily ecommerce platforms, have transformed how we shop and run business. In the digital world of today it is fundamental to recognize them and understand their prospects. Let's dive into the realm of online purchasing and get to know the ecommerce business models that exist in today's world.

Business to Consumer (B2C)

Shopping for products from the comfort of home with just a few clicks is the magic, brought by B2C e-commerce. In this model, businesses sell directly to individual customers, avoiding traditional retail stores. Online retailers and e-commerce companies like Amazon or Etsy, and countless others all around the world have embraced this model, offering a broad range of products and services to consumers. These online marketplaces have revolutionized our shopping experiences by providing convenience, choice, and most important, competitive pricing. So the next time you’re browsing an online store for a new jacket or your dog’s favorite food, it’s the B2C digital commerce magic you’re truly experiencing. Establishing your own store at one of these ecommerce companies, in comparison to having your own private label, enables easier management of customer orders, and many ways to reach other consumers and increase customer experience.

Business to Business (B2B)

While B2C focuses on transactions between businesses and individual customers, B2B takes another approach for online sales. In this ecommerce model, businesses sell their products or services directly to other businesses. You can think of it as a collaboration between two companies to fulfill their needs and business plan. These are for example software companies, offering software as a service (SaaS), subscription services or online stores supplying other entrepreneurs. One of the biggest platforms in this field are Alibaba and Amazon. Besides earlier mentioned B2C business models, they give the possibility to sell wholesale, process customer data and often act as a third party supplier.

Business to Government (B2G)

This unique ecommerce business model goes beyond selling products to customers. It is a situation where an online business sells specifically to government agencies of any size: federal, state or local. In this ecommerce business model strict business laws and conditions have to be met. The process starts with the government agencies that prepare a contract with all the requirements. Then, the bidding between online businesses that are interested in taking the deal starts. Once a company that fits all the necessities of a government contracts, the collaboration begins. In the environment of online businesses, B2G is usually present when an institution needs a software, web application or internal management IT systems.

Business to Business to Consumer (B2B2C)

In comparison to other business models, B2B2C brings 3 entities together: a third party supplier, online marketplace and a final customer. Here, two companies collaborate together where one covers production costs and supplies a retailer: ecommerce business. Through this business model, the retailer gets relevant inventory and the manufacturer can be direct to consumers and build brand recognition. One example of B2B2C partnership is ASUS, a manufacturer of gaming equipment: computers and accessories. They produce their own products and then distribute them to both brick-and-mortar stores and ecommerce businesses: Walmart or Costco.

Consumer to Consumer (C2C)

If you ever sold something online through platforms like eBay, Vinted or Facebook Marketplace, you’ve already experienced the Customer to Customer business model. In this ecommerce platform, people become sellers and have the ability to conduct online transactions: sell things online and trade between each other with their own products. This business model encourages entrepreneurship and creativity. By using their own unique ideas, people can even establish their own brand. Without any startup costs, it is possible to be as direct to the consumer as if you had your own online business.

Consumer to Business (C2B)

Among so many types of ecommerce businesses, this one is quite unusual. In the traditional retail model, businesses sell directly to consumers. However, in C2B, the tables turn, and consumers become the sellers. This model allows individuals to offer their skills, expertise, or unique ideas directly to businesses. Think of bloggers, influencers or YouTubers who often advertise a product in their content and share affiliate links that redirect to an Amazon shop or some other ecommerce website.

Choosing the right ecommerce business model

As you probably noticed, there are multiple types of ecommerce business models that provide to several markets, even tiniest ones. Whether it’s a regular ecommerce store with fashion, a subscription business or an online website of a B2B company. So, which one is the right fit for your company? First of all, you should carefully assess your company by asking yourself a set of questions:

  • What is your company selling? Is it physical or digital products, or maybe services?

  • Who is your customer? Do these people even shop online? Think about the current customer journey and the possibility of transferring it online.

  • How about your resources? Do you have what it takes to establish an ecommerce company? If not, any potential partners?

As you can see, the world of ecommerce stores is broad and full of possibilities. Choosing the right business model is just the start of the journey. So explore what it offers, start with a solid business plan and be prepared for the digital landscape that is rapidly evolving. With dedication and a customer-centric approach in mind, your ecommerce business can thrive in this dynamic and very competitive industry. Good luck on your eCommerce journey!