Types of E-Commerce Business Models

The world of eCommerce took only a few decades to become the GDP booster that it is today. Every sort of business has found convenience in running their product and service offerings in eCommerce platforms rather than in the traditional alternatives. Let’s take a look at the different types of E-Commerce Business Models that are currently active.

Types of eCommerce Business Models:

Typically, to a common man, E-Commerce will sound synonymous to online transaction. But as an owner of an E-Commerce store, you know that it involves much more than buying and selling of products. Let’s explore all the functions and types of eCommerce Business models..

Business-to-Business (B2B)
This type of E-Commerce includes all sorts of electronic transaction that takes place between two business organizations. The transaction can be either goods or services. The most common business models that are B2B are companies availing service from another company and producers selling their products to wholesalers.

For example, if you are a Magento store owner and you avail the Magento development services of Exinent LLC, you are engaging in a B2B business module.

A B2B business type requires more capital investment. They deal with fewer clients and work extensively in customizing their products and services as per the demand of their clients. Naturally, pricing policies are complex. However, each client receives personal care regarding their unique requirements and hence, if the quality is maintained, renewals and returns can be expected more.

Business-to-Consumer (B2C)
The B2C E-Commerce model  is one of the most popular forms of E-Commerce. As the name suggests, it involves a business relationship between a business and its customers. Hence, most of these businesses are retail in nature. Some of them can be service providers.

This type of  business is generating more and more revenues each year by selling products of nearly all kinds including groceries, handicrafts, hardware, software, fashion-related goods, and many more. However, this also means that this market is highly competitive. It gives customers a lot of information and choices.

For example, Amazon was the first-ever B2C E-Commerce store.

Consumer-to-Consumer (C2C)
C2C businesses electronically coordinate between two customers, typically, through a third party. The third-party collects a percentage or fixed commission in exchange for providing a platform where the seller can showcase their products and a buyer can enlist their interest or requirements. The third party usually do not get involved in the process of dealing as long as both parties abide by the laid out rules and regulations.

Common C2C businesses involve auctions and reselling of pre-owned items. For example, eBay, Craigslist, etc.

Consumer-to-Business (C2B)
To put it in the simplest words, C2B businesses involve freelancers and individuals who sell owned goods to businesses (who can resell them or keep for ot.g. handicraftsman) but have not established a business for themselves, can sell their work through this kind of business activity. Needless to say, all the transactions occur electronically. Example: UpWork.

Business-to-Administration (B2A)
B2A E-Commerce model is meant for electronic transactions between businesses and public administration. The business provides services, software and their maintenance to the administrative department. Businesses can also provide raw material and human resources for construction. It helps the government maintain records of citizens including their identity, credibility, health records, legal documents, and everything else. These businesses cater to only government organizations or the likes of it.

Consumer-to-Administration (C2A)
Electronic transactions between the government and a citizen comprise the C2A sector of E-Commerce. It includes paying taxes, paying academic fees, distance learning, e-health, e-voting, collection of feedback form from citizens by the government, conducting online surveys (for census), sharing information (like road closure, unplanned holiday, re-voting), etc.

The above E-Commerce business models are potent enough to encompass nearly all sorts of transactions that mankind might require. The global community is working together to explore all the added benefits that it is enabling. Are you a part of it yet?

Exinent has been in the forefront of Magento Consulting, Development, Migration, Support, and Maintenance since the past decade. We have successfully scripted success stories for hundreds of eCommerce stores. If you wish to discuss on Custom Magento Development, Migration, Consulting, Security and Audit services, do Contact Us and we will be glad to help you.