E-Commerce Concepts - Differences with Digital Commerce-B2B-B2C& C2C Concepts
It is a good idea to understand the world of e-commerce if you want to reach more prospective clients and generate more sales and revenue. Knowledge is power, and therefore, you need to understand the meaning of different terms and concepts such as B2B and B2C.
Do you know what e-commerce is? Ecommerce, electronic commerce, is any business transaction that occurs on the internet, that is, over an electrical network. Three main types of e-commerce are B2B, B2C, and C2C. This review gives you insight into these concepts to help you generate more sales. However, it takes more than understanding basic concepts to generate more revenue. For instance, you can and interested in your products and services.
To understand the difference between these concepts, let's look at what each means and entails.
Business to Business is the basic form of transaction that involves two businesses, a transaction involving a manufacturer and a wholesaler, or a business between a wholesaler and a retailer. This transaction involves two companies rather than the usual deals between companies and consumers.
These Business to Business transactions occur when;
- One organization is sourcing materials to use in their production of certain goods, for example, a restaurant purchasing salt.
- The business needs services from another company for operational purposes, for example, an entrainment bar hiring an accountancy firm to manage and audit their finances.
- A business reselling goods and services obtained from another, for example, a retailer buying food from the main restaurant.
You'll notice that in the B2B business transactions, both parties have comparable negotiating power and they involve lawyers when making these deals. The main disadvantage of this business model is that large companies have greater advantages than other small ones.
When considering the context of communication, the B2B transaction involves employees from different companies interacting through the various social media platforms. Also, the company can use its website to allow the other optimization to learn more about their products and services before initiating contact.
The Business to Business model is easy to understand as it is divided into;
- Vertical B2B model
You can easily apply the vertical B2B model in manufacturing or business. This model can either take the upstream or downstream direction. The upstream direction involves producers and retailers working with upstream suppliers such as manufacturers.
A vertical B2B website makes it easier for the upstream suppliers to promote their products effectively to retailers. This way, the seller gets the ideal platform to advertise their products and introduce new releases most conveniently.
- Horizontal B2B model
The horizontal B2B model involves a transaction pattern that concentrates similar transactions of different industries in one commonplace. This model presents a unique trading opportunity for the interested parties since it involves parties that do not own or sell the products. However, it presents an opportunity for purchasers and sellers to come together.
Business to Business transactions feature delicate deals, and therefore, they require proper planning to be successful. These transactions rely on the account management team to establish healthy business client relationships. Therefore, they need to get nurtured through professional interactions before making any sale.
Note that B2B transactions feature various challenges and obstacles more often than the B2C and C2C options. Therefore, organizations need to rely on appropriate contractual and relational techniques to overcome the challenges. Firms can also implement various contracts and norms that influence the nature and dynamics of the negotiations.
B2C refers to the Business to Customer transaction that involves selling goods and services from a business to a customer. This is the commonest business transaction where the consumers are the end-users. These companies that offer their products and services directly to the customers are called B2C Companies.
A good example of such a transaction is a web user buying shoes from the Nike online store. Or a person using the Uber app to seek transportation services.
The B2C business transactions vary as companies might adopt a combination of models to maximize their profits. There are five types of B2C models big brands use to target customers.
- Direct sellers - A commonly used model where consumers buy goods and services from online retailers such as Amazon. This model is flexible as it is ideal for both big manufacturers and small businesses. Some examples of organizations using the Direct Sellers model are Target.com and Zappos.
- Online Intermediaries- In this model, rather than the company or manufacturer offering its products to consumers, they offer a platform to host C2C, Customer to Customer, transactions. They connect buyers with sellers and charge some percentage of each sale. eBay is the perfect example of a company using such a model.
- Advertising-based B2C - Here is a business model that uses free content to bring prospective clients to a website. The e-commerce companies using these models implement strategies such as content marketing to show shoppers relevant Ads. This way, the website hosting the Ads makes a profit by selling the advertisement space.
- Community-based - Community-based companies such as Meta, formerly known as Facebook, use factors such as geographical location and demographic data to connect users with targeted advertisements. Such a platform makes it easier for marketers to promote their products to the ideal audience. Companies using the Community based model record an increase in sales since they advertise their services to more qualified clients.
- Fee-based - The e-commerce businesses charge a specific subscription in exchange for the consumer getting an unlimited access to their content. A good example is Netflix which charges its users for quality, engaging, and interactive films and other digital media. Some sites choose to offer free, but limited access and charges for most of their content, for example, The New York Times.
Companies using the B2C models fall under one of the following given categories. Some companies adopt different combinations of these options to . The Direct Seller model is the commonly used strategy by most e-commerce businesses.
Benefits of using B2C models in e-commerce
Companies using any of the five B2C models boast of various potential benefits such as:
- Relatively low costs since these transactions cut down the physical infrastructure costs.
- Globalization since businesses use the various social media platforms available to market their products to billions of users.
- Customer personalization in that these models allow businesses to personalize their marketing campaigns to suit individual consumers.
- Businesses using the B2C models have more control over the user experience leading to a direct customer experience.
- Companies get customer data such as their sales conversion rates that help them improve their products, services, and marketing strategies.
The C2C, Customer to customer, model involves a transaction between private individuals, where consumers conduct business with each other. The goal of such a transaction is to facilitate and enable buyers and sellers to locate one another. An auction or the classified feeds section is are good examples of this transaction, where a customer sells goods to another consumer.
To illustrate the C2C transaction better, think of the farmer's market where farmers sell their farm produce to consumers. Then translate this idea to an online market space where the willing sellers have to purchase a spot on an online platform to sell their goods.
The C2C business model is ideal for small and individual sellers who lack an established brand or business identity. Such transactions are usually short-term since the sellers have limited goods or services to offer.
Advantages of C2C e-commerce
Individual sellers benefit from the C2C model in various ways such as;
- Increase in profitability
The sellers register more profits since there are no intermediaries involved. They don't have to pay extra costs, such as salaries and rent, to conduct their business. This is because the C2C marketplace offers a direct communication channel between the two parties, without the seller incurring any hidden costs.
- Higher customer reach
A seller without an established business will find it hard to attract customers if they were to use a physical shop. However, with the C2C market platform, they can easily reach billions of web users and sell their products. Their services become accessible to the worldwide market and this increases their reach and chances of making a sale.
One challenge that most unestablished brands face is a lack of trust from the online audience as it limits their chances for conversions. C2C e-commerce platforms remedy this as individual sellers utilize space on an existing and well-established platform. This saves them the hassle and effort of creating and building their platform. They benefit from these deals as they can share the credibility of the C2C market platform.
The buyers also benefit from this transaction in the following ways;
- Reduced prices
The main advantage of buying through the C2C transactions is that there are no intermediaries involved. Removal of intermediaries, retailers, and other third-party stores keeps the product prices minimum.
- Different options
C2C offers buyers the convenience of choosing their ideal seller. The marketplace features various sellers to choose from. Buyers can also choose their best option using the different search criteria available.
B2B VS C2C
The main differences between the B2B and C2C e-commerce models are;
- B2B features transactions between established businesses while the C2C model involves consumer trading mostly done through various online platforms.
- There are legal requirements to be met by the organizations in the B2B business model while the C2C involves individuals, hence there is no paperwork required.
- B2B is a more complex model as it features various types of trade that have their set of pricing. C2C, on the other hand, doesn't involve traditional pricing methods, however, there are negotiations between the interested parties.
- Another distinctive difference between these concepts is that B2B involves established businesses entities, therefore, they offer a larger scale of operations, and the volume of goods involved is huge. C2C however features a relatively smaller volume because the sellers are not well established and they sell what is readily available.
- Some of the main challenges affecting the B2B business model are the late shipment, the quality of supplies, and high pricing. These factors are associated with the failure of the B2B business model. Challenges facing the C2C are different, that are, unsatisfactory standards and security concerns.
B2B Vs. B2C
- Since the stakes are high in the B2B model, the buyers have to involve various departmental units before purchasing, while in B2C, the consumers only have to involve themselves when purchasing goods or services.
- The involved parties in the B2B business transaction have to consider the long-term effect of their decision resulting in more time spent in research. However, since the consumer in the B2C is prone to impulsive buying, there is no need to conduct extensive research before purchasing.
- Also, the volume of goods involved in the B2B model is significantly higher when compared to that of B2C.
- B2B models feature loyal participants willing to trade for decades, while B2C includes consumers who often buy a product once or twice.
B2C Vs. C2C
- During B2C transactions, there are relatively fewer negotiations taking place as compared to C2C where there is more room for negotiations and price customizations.
- There is a clear distinction between the seller and the buyer in the B2C models while the difference between the two is a bit murkier in the C2C transactions.
- It is easier for buyers to compare products from different sellers in the C2C model while it is troublesome for consumers to simultaneously view products and services from different retailers in the B2C models.
- B2C e-commerce platforms offer a more customized user experience compared to the C2C since the C2C sellers have little or no customizing rights on the rented online platform.
It is essential to understand basic e-commerce concepts, such as the B2B, B2C, and C2C concepts, if you wish to better your website, products, and services. This review gives insight into each of the models and their differences. There is more to consider if you want to boost your e-commerce platforms, such as adding . Don't forget to visit Cinema8 for a more exciting experience.