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Types of Ecommerce Business Models

Updated: Jun 2

E-commerce is a business concept that allows businesses and customers to buy and sell products online. There are several eCommerce business models to select from, and it is now simpler than ever for creative founders to use them to turn their ideas into reality.

If you want to innovate and defy expectations — if you want to stand out from the crowd online — you'll need to understand which business model works best for you and how you can leverage that into more success.

Types of Ecommerce Business Models

Innovative eCommerce enterprises have revolutionized our shopping habits and redefined what is possible. E-commerce accounted for 6% of retail sales in the United States in 2013, and analysts project that by 2025, eCommerce sales will account for roughly 22% of all purchases in the United States.

The Most Common Types of Ecommerce Business Models

If you're launching an eCommerce firm, you'll almost certainly fall into one of these four 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.

BigCommerce helps position your business for optimum potential regardless of its growth stage or business strategy. If you want to learn more, contact sales and ask for a demo.

B2C (Business-to-Consumer)

B2C companies sell directly to their customers. Anything you buy as a consumer in an online business, from clothing and home necessities to entertainment, is a B2C transaction.

A B2C purchase has a far faster decision-making process than a B2B buy, particularly for lower-value products. Because of the shorter sales cycle, B2C companies often spend less money on marketing to achieve a sale despite 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 consumers and make their lives simpler, B2C entrepreneurs have used technologies such as mobile applications, native advertising, and retargeting.

B2B (Business-to-Business)

A firm 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. In average, B2B transactions have a longer sales cycle, but larger order value and more recurrent orders.

Recent B2B entrepreneurs have carved out a niche for themselves by replacing catalogs and order sheets with online portals and improving specialized market targeting.

By 2021, 60% of B2B purchasers would be millennials, nearly doubling from 2012. B2B selling in the web realm is growing increasingly significant as younger generations enter the age of completing commercial transactions.

B2B2C (Business-to-Business-to-Consumer)

B2B2C is an abbreviation for Business-to-Business-to-Consumer. It is a business strategy in which a corporation offers its product or service to an end client in collaboration with another organization.

Unlike when a corporation white labels a product to promote it as its own, the end customer realizes that they are purchasing a product or using a service from the original company.

B2G (Business-to-Government)

B2G is an eCommerce model in which a company sells and distributes its products to government agencies or public administrations, whether municipal, county, state, or federal.

This approach is dependent on successful government contract bidding. Typically, a government agency would issue a request for proposal (RFP), and eCommerce enterprises will be required to compete on these contracts.

B2G varies from other firms or customers while being a more secure business strategy. Government agencies' bureaucratic character typically results in a considerably slower speed, which might limit possible revenue streams.

C2B (Consumer-to-Business)

Individuals can sell goods and services to businesses through C2B firms. A site in this eCommerce paradigm may allow clients to publish the job they want to be done and have firms bid on the opportunity. C2B services would also include affiliate marketing.

The competitive advantage of the C2B eCommerce business is in pricing for goods and services. This strategy empowers customers to set their own pricing or have firms compete directly to suit their requirements.

Recent innovators have ingeniously leveraged this concept to connect businesses with social media personalities in order to sell their products.

D2C (Direct-to-consumer)

A direct-to-consumer company sells its own product to its clients directly, without the assistance of third-party distributors or internet merchants.

Unlike other business models such as B2B2C, there is no intermediary between the customer and the firm.

C2C (Consumer-to-Consumer)

C2C eCommerce enterprises, often known as online marketplaces, link users to exchange products and services and generate money by charging transaction or listing fees.

C2C firms gain from self-propelled expansion by motivated consumers and sellers, but quality control and technology upkeep are major challenges.

In the early days of the internet, companies like Craigslist, Walmart, Alibaba, and eBay pioneered this strategy.


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