An Insight into Various types of E-commerce Business Models
There has been a steady increase in e-commerce businesses over the last few years. Shopping online has become a craze and owing to the busy lives, most of the people prefer online stores rather than brick and mortar stores.If you want to build a successful e-commerce business, you ought to have a robust sales and marketing plan to run it, well-researched business models and perfect knowledge about your competitors.
To understand how to run an e-commerce store better, business owners should have the fundamental knowledge like the business goal and types of e-commerce business models.There are two main variables based on which you can categorise the e-commerce businesses. The first one is the variety of products e-commerce business sells and the second one is the parties involved.
According to the first type, e-commerce business models can be of 3 main types:
• Physical goods – Appreals, gadgets, appliances, beauty products, furniture etc.
• Service oriented business models -Tickets, insurance etc.
Such a categorisation helps to understand the financial configuration of any company as well as its business model. It can be daunting to ship and deliver physical goods while digital goods pose no such challenge. On the other hand, several factors like seat availability, choice of the seat, preferred meal etc. will come into picture for businesses dealing with airline tickets.
Businesses dealing with digital goods can work on online medium solely. Contrary to that, sellers of physical goods should have both – an online and offline presence.
6 Different Types of E-Commerce Business Models
Let’s shift our focus to the next type of business model that considers the participants involved in it. There are 6 main types of e-commerce models included here.
1. Business-to-Business (B2B)
As the name suggests, the parties involved in this business model are businesses. Owing to this, B2B e-commerce has an enormous volume and value. For example: A mobile phone company like Nokia buys the components from another company to build its phones or accessories.
2. Business-to-Consumer (B2C)
B2C e-commerce is the most frequently encountered e-commerce business model. The most popular example is Amazon. These stores work with the motive of removing physical stores. B2C stores have flourished as a result of the booming digitisation. The consumer can avail a flawless customer service in addition to better insights into the product usage.
3. Consumer-to-Consumer (C2C)
C2C types of e-commerce business model where consumers are involved in both side. This type of business model includes a fully electronic transaction of products and services carried out among consumers. More often than not, consumers get third-party platform to sell, buy, trade anything online with other consumer and in return they have to pay charges to that third party. Ebay is the best example of it.
4. Consumer-to-Business (C2B)
C2B challenges the conventional e-commerce business model. It is extensively used in projects that are established on crowd sourcing. Several individual consumers showcase their products or services to companies who are looking forward to buying those specific services or products. Upwork and Fiverr are the best example for C2B e-commerce business model.
5. Business-to-Administration (B2A)
Every transaction that takes place between any company and the public administration is known as B2A e-commerce model. It takes up a number of services like fiscal, social security, employment etc. Such services are getting more popular these days.
6. Consumer-to-Administration (C2A)
Consumer-to-Administration (C2A) model includes transactions that happen between consumers and public administration. Distance learning, filing income tax returns, making payments, scheduling appointments with healthcare professionals etc. are examples of this types of e-commerce.
B2A and C2A are the two models that take help of advanced information and communication technology to make public administration simpler, more flexible and efficient.
Things to Remember for E-commerce Business Owners
You should put your customers’ privacy as a priority and make sure that the confidentiality of their private information is maintained. Because of security concern, many customers refrain buying from websites which don't have https, green padlock and company name in the browser. All these things generally come with SSL products such as Comodo EV SSL. See to it that your website is not one of them. Investing in SSL Certificate is one of the most important aspects of a successful e-commerce business as now major browsers are showing 'Not Secure' warning for non HTTP websites.
E-commerce sector gives the business owners a brighter scope to build a long-lasting rapport with their customers. This leads to greater efficiency and productivity of businesses. Moreover, the customer gets premium quality service and personalised attention from the companies both before and after the purchase. With the insights shared above, you have a clear idea of diverse e-commerce businesses models.
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