Types of E-commerce Business Models

When we talk about eCommerce, the first thing that comes to mind is that it is an online commercial or sales activity that takes place between the seller and the buyer. Although the concept definition is right, there are more complex variables involved that categorise eCommerce into six key categories. There are many types of eCommerce models, based on the services provided, that have been built over the years. The key categorization is based on the consumers and the dealer.

E-commerce has now become very popular with individuals who want to purchase and sell various items because of the convenience it provides, the cost advantages to suppliers, the cost savings to consumers, and also the anonymity it offers.

 Let’s find out all the functions and types of eCommerce Business modules.

Business-to-Business (B2B):

 

This type of e-commerce involves all kinds of electronic transactions between two business entities that take place. The transaction may be either services or products. Companies using service from another company and manufacturers selling their goods to wholesalers are the most popular business models that are B2B. 

A B2B form of company needs more investment in money. They negotiate with fewer customers and work extensively to tailor their goods and services according to consumer demand. Pricing policies are naturally nuanced. However, each customer provides personal attention about their individual specifications and, thus, if the standard is preserved, further renewals and returns can be expected.

Business-to-consumer (B2C):

 

B2C e-commerce is a more conventional e-commerce model of which most are familiar. In B2C, online retailers market and directly offer goods to end users. Although B2B can be more complicated, it's as easy as ordering a book or camera online for B2C business.

B2C online retailers target a large audience and emphasize new marketing and sales techniques such as advertising-based marketing , social media, and influencer marketing. In order to maximize traffic, facilitate initiatives, and sales conversions, B2C ecommerce business owners expend more time than negotiating quotes and terms or handling order production and fulfillment. 

Consumer-to-consumer (C2C):

 

Ecommerce companies from C2C promote customer purchases. Individuals can sell, purchase, and exchange products or services on C2C platforms. By charging listing and transaction fees, consumer-to - consumer linking sites gain money.

C2C works extensively with a third-party firm to facilitate transactions, protect customers, and manage quality management, unlike B2B and B2C.

Amazon, eBay, and Craigslist have been the main C2C e-commerce websites in the world since the early days of the Internet. To broaden their reach, recent innovators such as Depop are taking advantage of social media. 

 

Consumer-to-business (C2B):

 

Unlike B2B and B2C, C2B is less well-known and intuitive. Individuals (consumers) offer goods or services to a corporation in the C2B model.

Freelancer networks like Upwork and Fiverr are the majority of traditional C2B firms. Influencer-matching markets like Ifluenz are on the rise as new, disruptive types of C2B in this digital and social era. 

To put it in the simplest terms, C2B companies include freelancers and individuals who sell owned products to companies (who can resell them or retain them for ot.g. handicraftsman) but have not set up a company for themselves, can sell their job through this form of business operation. Needless to mention, electronically, all the transactions occur.

 Business-to-Administration (B2A)

 

The B2A E-Commerce model is intended for electronic business-to-public administration transactions. The organisation supplies the administrative department with facilities, software and repairs. Businesses should also supply buildings with raw materials and human capital. It allows the government to retain citizens' records, including their identification, reputation, health records, legal records, and everything else. These companies only appeal to government agencies or the like. 

 Consumer-to-Administration (C2A):

 

The C2A field of e-commerce includes electronic transactions between the state and an individual. This involves paying taxes, paying academic fees, distance learning, e-health, e-voting, gathering government input from residents, conducting online surveys (for census), exchanging information (such as road closures, unplanned holidays, re-voting), etc. 

 

   Types of eCommerce Business Revenue Models:

 

Only one aspect that determines the company is who you're selling to. Another one is how you get and sell your goods. Your decisions have a big effect on your income here, which is why this decision should be an early one you make when planning your business. 

 Dropshipping:

Dropshipping is a form of fulfilment in which no stock is held on hand by a company. Instead, the company lists items for sale and forwards those orders to the manufacturer. The supplier then delivers the goods directly to the buyer, with the vendor retaining the difference between the price of their own sale and the price of the supplier.

A partnership with a manufacturer or wholesaler who is willing to provide dropshipping services is necessary to set up a business as a dropshipper. If directly contacted by an interested seller, some suppliers are willing to dropship, while others make themselves available through dropshipping apps or directories such as Doba or AliExpress. 

Wholesaling:

Wholesaling is the reverse of dropshipping: the company keeps inventory and fulfils orders on its own. As they may sell goods in bulk for use or final sale by other firms, wholesalers have more opportunities to shape B2B relationships. The buying company will label goods that will be resold, which is why "wholesale pricing" has become a buzzword that means lower-than-retail price. Selling directly to the public at these rates is likely to draw some very loyal clients.

Many wholesalers participate in B2B transactions only, and their business processes may be expressly planned exclusively for bulk order fulfilment. Others only market B2C, whether at regular rates, wholesale discounted prices, or anywhere in between. 

 Manufacturing and Private Labeling:

You probably think of an assembly line in a warehouse, filled with staff and equipment, when you hear the word 'manufacturing.' While this may be an apt impression, large-scale events such as these are just part of the storey. Smaller producers are even more prevalent, and even involve individuals who produce artisanal goods or other goods at home. Not every company, however, has the funds to invest in the development of its own products, and in that case, it is possible to find a private label manufacturer to outsource it. A manufacturer of private labels produces goods that a single brand can selectively brand and sell. These products are often cheaper than similar products from well-known labels, and although this has been related to poor quality in the past, private label manufacturing practises have improved significantly. 

 White Labeling:

Another kind of development practise targeted at companies who want to market their own products is white labelling. A maker of white labels produces a standardised product that can be personalised with the branding of the seller. White label items are sold to any number of companies for sale, which is what separates them from exclusive private label products.

White labelling can be a good way to market high-quality goods with your own branding, just as long as the white label manufacturer produces high-quality products to begin with, without having to commit time to designing or producing such products. 

 Subscription:

A perfect way to build up recurring sales and customer loyalty is to set up a subscription programme. This one deals only with how you market your goods, and not how you source them, unlike other revenue models.

There is scope for a subscription service for any product that needs replenishment on a regular basis. Repeated purchases must be made of pet food, cat litter, kitchen supplies, toiletries, nutritional supplements, diapers, disposable goods, and many more products. Customers know this, but they also typically hate making these repeat transactions, but it can be annoying to remember to buy them. They may need or even prefer these items.

There's an acceptable business model, revenue model, and eCommerce platform out there to cover it, no matter what your idea is for your venture. A key choice that will impact your ability to execute your business plan is the eCommerce platform you use, so choose carefully.