Types of Ecommerce Business Models Working Today
Around 24 million ecommerce sites have been estimated selling products online in 2020. For a better understanding of the various business models involved, two parameters that provide the clearest distinctions are the types of goods the e-commerce business sells and the nature of the participants.
Usually classification of ecommerce businesses is done on basis of revenue model, business model, and website type.
Speaking of
types of goods that are sold on ecommerce websites, they may fall in one of the following categories -
1. Physical goods such as clothing, shoes, books, gadgets, furniture, and appliances
2. Digital goods such as software, e-books, music, text, images etc
3. Services such as facials, tickets, insurance etc.
This type of classification is important when it comes to ecommerce website development as it gives the developer an insight into the business model and the financial model of the company. For example, businesses selling physical goods face the logistical challenges of delivery and inventory management of those goods, a problem that sellers of digital goods don't have to deal with. When it comes to selling tickets, real time parameters must be evaluated. Like if it’s about airline tickets, issues such as availability, the location of seats, meal preferences, and refundable vs. nonrefundable options and the like are the major points.
Vendors of digital goods can easily manage to operate online only, whereas those selling physical goods must also have a running physical delivery system to transfer their products to their buyers.
Be it a side-hustler or a serious seller, there’s a platform to help everyone achieve their sale goals through modern technologies and professional assistance. Shopping online is fun for some, bread and butter for others, stat up for some and expansion for others. Motives might be different; goal is the same; attracting customers and converting sale.
Now, above were the Types of Ecommerce Goods, next comes
the Nature of Participants of Ecommerce.
The three most common participants in e-commerce are - businesses, administrations and consumers. The various combinations of these participants create remarkably different business models and their related challenges. So, what are the major Types of Ecommerce based on the combinations, which again can be divided into categorization based on -
business model based ecommerce websites
revenue model based ecommerce websites, and
t
he types of ecommerce website
In this post , we shall talk of those
based on Business Model and the rest can be read in our other posts/blogs. Let’s see..
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Consumer-to-Business (C2B)
Business-to-Administration (B2A)
Consumer-to-Administration (C2A)
B2B - B2B e-commerce refers to a model focuses on providing products from one business to another or you can say it as, all electronic transactions of goods and sales that are conducted between two companies. This type of e-commerce typically explains the relationship between the producers/manufacturers of a product and the wholesalers who advertise the product for purchase to consumers. For example, Alibaba's business-to-business (B2B) marketplace connects Chinese producers with overseas buyers.
B2C - B2C ecommerce is the traditional retail model, where a business sells to individuals through an online store as opposed to a physical store. B2C e-commerce deals with electronic business relationships between businesses and consumers, allowing them to research, shop around for the best prices, read customer reviews and often find a variety of products that they wouldn’t otherwise be exposed to in the physical retail market. This category definitely enables businesses to develop a more personalized relationship with their customers. for example, Walmart, GAP, McDonalds.
To understand the basic difference between B2B and B2C commerce, read our post -
B2B versus B2C.
C2C - Consumer-to-Consumer selling is usually a casual deal set up like on OLX or eBay where there is electronic transactions between consumers.
C2B - Here a consumer makes their services or products available for companies to purchase, for example photographers selling their pictures on pexels or unsplash. It is kind of equivalent to a sole proprietorship serving a larger business. Affiliate marketing or Google Ad Sense can also be counted under this category.
B2A - This refers to all transactions between companies and public administration in areas of document management, social security, employment and human resources.
C2A - This speaks of all electronic transactions between individuals and public administration, for example filing tax returns, paying for parking tickets or ordering a new government ID, scheduling a health appointment using an online service.
This small term E Commerce has depths to understand. Each category has its own set of customized requirements when it comes to developing an Application or a
cloud based software development for it.