-E-commerce is a business concept that allows businesses and consumers to buy and sell products or services online.
There are numerous e-commerce business models for consumers and businesses to enable online transactions globally with a variety of ecommerce platforms.
- B2C (Business-to-Customer),
- B2B (Business-to-Business)
- B2B2C (Business-to-Business-To-Customer)
- B2G (Business-to-Government)
- C2B (Customer-to-Business)
- D2C (Direct-to-Customer)
- C2C (Customer-to-Customer).
Key Statistics:
- Ecommerce sales are expected to reach $6.3 trillion by 2024. In comparison, the worldwide sales from ecommerce were $4.28 trillion in 2020. (Statista)
- The B2B e-commerce market is close to $8 trillion (US).
The Most Common Types of E-commerce Business Models
If you’re launching an e-commerce business, you’ll almost certainly fall into one of these broad groups. Each has advantages and disadvantages, and many businesses operate in more than one.
Knowing which bucket your concept belongs to might help you think imaginatively about your possibilities and risks.
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B2C (Business-to-Customer)
B2C companies sell directly to their customers. Anything you buy as a consumer in an online business, from clothing and household necessities to entertainment, is a B2C transaction. Walmart and Amazon are some of the exapmples of B2C e-commerce business model.
A B2C purchase has a far shorter decision-making process than a B2B buy, particularly for lower-value items. Because of the shorter sales cycle, B2C companies often spend less money on marketing to achieve a sale while having a lower average order value and fewer recurring purchases than their B2B counterparts.
B2C encompasses both products and services. To promote directly to their customers and make their lives easier, B2C innovators have used technologies such as mobile apps, native advertising, and retargeting.
B2B (Business-to-Business)
A business sells its product or service to another business in a B2B business model. The buyer is sometimes the end-user, but more often than not, the buyer resells to the consumer. On average, B2B transactions have a longer sales cycle, but larger order value and more recurrent purchases. Prominent B2B e-commerce companies include Shopify, Amazon’s Web Services (AWS), Microsoft, Salesforce, Slack, Cisco, Qualtrics, FedEx, etc.
Recent B2B entrepreneurs have carved out a niche for themselves by replacing catalogs and order sheets with e-commerce portals and boosting niche market targeting.
By 2021, 60% of B2B purchasers are millennials, nearly doubling from 2012. B2B selling in the web realm is growing increasingly significant as younger generations enter the age of completing business transactions
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