E Commerce is becoming a big trend in the business world because it has a lot of potential in drawing new consumers and retaining existing ones. Most individuals are more or less a little literate about technology and understand how it works. Businesses have also identified and understand the need to do an expansion through E Commerce in order to increase exposure and profit.
There are many things people can do business with. And what exactly can be sold through ecommerce? There are service providers such as consultant firms and law firms where they provide professional services to solve customers’ requirements. We also have physical goods from online retail and lastly digital goods such as computer software.
In this article, we will talk about the different types of E Commerce business model as well as some of the less common ones in the field.
Business to Business Model
Business to Business (B2B) simply refers to the selling of products from one business to another. Examples of the B2B would be those providing furniture to offices or hospitals as well as those that are providing software systems to other businesses. Orders in the B2B model usually hold a higher value than B2C model because they are larger in quantity.
Business to Consumer Model
The Business to Consumer (B2C) are retailers that sell their products to individual consumers via online. Sales and profit are quick and e commerce makes the whole process convenient. The cons would be that there is too much competition because the field of B2C is gaining more attention, especially now because of covid19.
Consumer to Consumer Model
The consumer to consumer (C2C) business model refers to the use of platforms such as Carousell or Amazon by consumers to sell items. It is a good business model for those that have priority on cutting costs. However the cons would be that sellers would not be able to receive the money immediately even if products are shipped out to consumers.
Consumer to Business model
The Consumer to Business (C2B) model is where an individual or a sole proprietor sells products or services to companies. An example would be influencers that offer reviews on the product or service to their audiences. Traffic for C2B is extremely important, if there is no traffic by the influencer, no companies would consider partnership.
Lesser Known Business Models
White labelling refers to selling of goods manufactured by a third party. The goods however, are labelled with your company’s logo and packed with your own designed packaging. The pros of white labelling is that companies can sell goods that sell well. The cons would be the lack of control on how the goods are manufactured.
A manufacturer makes use of raw materials or components and produces a finished product to sell. A common example would be the automotive industry. Manufacturing also requires other important factors such as storing and equipping, it can therefore be a cons if handled incorrectly.
Wholesaling refers to a business buying goods from the manufacturers in big quantities and then reselling them. Or it could also be possible where businesses manufacture their own products in huge quantities and sell it to retailers that will resold it to end users. The pros of wholesaling is that the prices are cheaper when bought in a larger quantity. The cons is that all of these goods will require cost for storing, shipping and tracking.
Dropshipping refers to businesses connecting buyers and manufacturers, providing the means to buy the product. No goods will be stocked by the business, they will only accept orders and the money. In simple terms, it means that businesses with the dropshipping model are selling products not owned by them.
The cons of dropshipping is that there is little to no control over the quality and fulfillment of goods. The pros is that it is simple and convenient because there will be no hassle for purchasing, storing and inventory.