eCommerce Business Models

The Mega-Giant that is eCommerce

By 2019 I'm sure everyone has made a purchase online at some point in their lives. Electronic commerce (eCommerce) encompasses all online marketplaces which connect sellers to buyers and buyers to sellers. The internet is then used to process electronic transactions between different individuals.

eCommerce Business Models

Typically, eCommerce can be divided into 6 major categories or models. These models all represent different online relationships in the process of buying and selling goods:

1. Business to Business (B2B)

 

1. Business to Consumer (B2C)

 

1. Consumer to Consumer (C2C)

 

1. Consumer to Business (C2B)

 

1. Business to Administration (B2A)

 

Consumer to Administration (C2A)

Business to Business

These are transactions occurring between companies. That can include wholesalers and producers that deal with retailers. B2B accounts for transactions related to goods and services.

Business to Consumer

These are the relationships between the business and the end consumer. This often has to do with eCommerce that occurs online. This has grown more recently due to the birth and growth of the internet. The customer has lots of knowledge and description of the product, reviews, the ability to buy in bulk or at a discount and even sometimes have fast delivery.

Consumer to Consumer

This consists of electronic transactions between 2 customers. Often this occurs through a 3rd party online platform (think Etsy, FB Marketplace, Kijiji and eBay).

Consumer to Business

This is typically seen in crowdsourcing projects (like Kickstarter). In a situation like this, the consumer or individual makes the item or service and sells it to a company. Think of designing a logo for a company.

Business to Administration

This relationship consists of dealings between companies and public administration. It encompasses services like legal documents, employment and so on.

Consumer to Administration

Electronic transactions are between individuals and public administration. A good example of this is distance education and filing taxes electronically.

Why eCommerce?

eCommerce has created a scope of buying and selling that is hard to match. It has a huge reach globally and receptiveness to eCommerce is quite high. Customers have access to buying pretty much 24/7 with the ability to shop online. There are also typically fewer costs to the consumer as selling online offers the business a significant reduction of transaction costs. All models of eCommerce are thriving, and it's been said that online sales will increase their sales to 78% by the year 2020.