The business models of E-commerce are defined on the parties involved and the type of business activities or services provided. Many business models have been proposed for E-commerce but the following are the most popular amongst all. Generally, the classification is done on the basis of who is selling to whom.
- Business to Consumer (B2C)
- Business to Business (B2B)
- Consumer to Consumer (C2C)
- Consumer to Business (C2B)
Business to Consumer
Business to Consumer (B2C) refers to business and organizations that sells products or services to consumers over the Internet using websites. Consumers from anywhere can browse and order the products or services anytime. The sellers can sell products directly to the consumers. And the buyers are individual customers. This is the type of E-commerce that the consumers are most likely to see on Internet. Lately, it has gained a high popularity amongst consumers due to simplified and fast way to buy products. Apart from online retailing, B2C also includes services like online banking, retail estate services, travel services and many more. Some examples of B2C websites are: amazon.com, rediff.com, fabpart.com, flipkart.com etc.
Business to Business
Business to Business (B2B) refers to E-commerce activities between different business partners. In B2B both the seller and the buyer are business entities. It enables the business to form E-relationship with their suppliers, distributors and other entities. This allows more transparency among the business entities involved and results in more efficiency. For example, a manufacturer deals with a supplier, a distributor and a wholesaler. The manufacturer using B2B can quickly communicate to the supplier about diminishing stock product, the supplier in turn can respond quickly to it. With the help of B2B, the companies can improve the efficiency of common business activities like supplier management, inventory management, payment management and many more. It is an effective media for managing telemarketing, supply chain, procurement, just-in-time delivery, online services. Some examples of B2B websites are commodity.com and tradeindia.com.
Consumer to Consumer
Consumer to Consumer (C2C) refers to E-commerce activities involving transactions between and among the consumers. It enables the consumers to directly deal with each other through online auctions and classified advertisements without the involvement of third party. Any Internet user can become a vendor or purchaser at C2C websites. Auctions sites are a good example of C2C model. If there is a product to be sold, it can get listed at an auction site and others can bid for it. Some of the C2C websites are Ebay.com, OLX.com And Quikr.com.
Consumer to Business Consumer to Business (C2B) involves reverse auctions where the consumers determine the prices of the products or services. In this type of E-commerce, consumers have a choice of a wide range of products and services, along with the opportunity to specify the range of the prices that they can afford or are willing to pay for a particular product or service. The companies bid to offer the products or services to the consumer. This helps in reducing the bargaining time while increasing flexibility for both the consumer and the company. C2B uses Internet to reverse the normal buying process wherein the consumers decide what they are willing to pay and business decides whether to accept it or not. Some examples of C2B websites are bidstall.com, JeetLe.in.