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E-commerce Business Models

E-commerce (electronic commerce) refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. These business transactions occur either as business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. it includes many categories into a single platform, such as online funds transfer, internet marketing, electronic data interchanging, supply chain management, online transaction processing, and data collecting.

E-commerce Business Models

Business – to – Business (B2B)  is a situation where one business makes a commercial transaction with another. This typically occurs when A business is sourcing materials for their production process for output.Example- Providing raw material to the other company that will produce output. The internet provides a robust environment in which businesses can find out about products and services and lay the groundwork for future business-to-business transactions. Company websites allow interested parties to learn about a business’s products and services and initiate contact. Online product and supply exchange websites allow businesses to search for products and services and initiate procurement through e-procurement interfaces. Specialized online directories providing information about particular industries, companies and the products and services they provide also facilitate B2B transactions. 

Business – to – Consumer (B2C) refers to commerce between a business and an individual consumer. There are typically five types of online B2C business models that most companies use online to target consumers

  • Direct sellers  The most familiar kind of model, where people buy goods from online retail sites. 
  • Online intermediaries These are liaisons or go-betweens who don’t actually own products or services that put buyers and sellers together.
  • Advertising-based B2C  This model uses free content to get visitors to a website. Those visitors, in turn, come across digital or online ads. 
  • Community-based Sites like Facebook, which builds online communities based on shared interests, help marketers and advertisers get their products directly to consumers. 
  • Fee-based like Netflix will charge a fee so consumers can access their content.

Consumer – to – Consumer (C2C) provides an innovative way to allow customers to interact with each other. Traditional markets require a business to customer relationships, in which a customer goes to the business in order to purchase a product or service. C2C websites and similar platforms make money from fees charged to sellers for listing items for sale, adding on promotional features and facilitating credit card transactions. These C2C transactions typically involve products sold through a classified or auction system, and the products sold are often used.

Consumer – to – Business (C2B)  is a business model in which consumers create value and businesses consume that value. For example, when a consumer writes reviews or when a consumer gives a useful idea for new product development then that consumer is creating value for the business if the business adopts the input. it is used to describe a transaction conducted over the Internet between a business and a consumer for his/her personal use. B2C as a business model differs significantly from the B2B model, which refers to commerce between two or more businesses. They sell directly to consumers.

Business – to – Government (B2G) is a business model that refers to businesses selling products, services or information to governments or government agencies. B2G networks or models provide a way for businesses to bid on government projects or products that governments might purchase or need for their organizations. This can encompass public sector organizations that propose the bids. B2G activities are increasingly being conducted via the Internet through real-time bidding. 

Government – to – Business (G2B) is a business model that refers to businesses selling products, services or information to governments or government agencies. B2G networks or models provide a way for businesses to bid on government projects or products that governments might purchase or need for their organizations. it is the electronic sharing of data and/or information systems between government agencies, departments or organizations. The goal of G2G is to support e-government initiatives by improving communication, data access, and data sharing.

Government – to – Citizen (G2C)  is the communication link between a government and private individuals or residents. Such G2C communication most often refers to that which takes place through Information and Communication Technologies (ICTs), but can also include direct mail and media campaigns.

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