All Types of eCommerce Businesses you Need to Know
No matter what your eCommerce type is, we’re sure that it crossed your mind before. What are the types of eCommerce businesses and on what basis do we classify them? You log in to noon.com, browse vacuum cleaners, read product descriptions, compare prices and brands, decide on the machine you like, add it to the cart, checkout and pay with your Visa, and two days later the vacuum cleaner is delivered to your doorstep – that’s eCommerce. But what are the different types of eCommerce businesses?
What Are the Types of Ecommerce Businesses? 🤔
Here’s a detailed description of the various types of eCommerce models so that you’re aware of the model you’re running or about to launch.
1. Business to Business eCommerce (B2B)🛒
B2B eCommerce business model is built on selling products or services from one company/business to another.
Take, as an example, a software company selling its services to a tourism company, an office furniture company furnishing a media production company, and so on. Although the B2B model has a longer sales cycle, it enjoys a higher-order value and more recurring purchases.
A firm sells its product or service to another business in a B2B business model. The buyer is sometimes the ultimate user, although most of the time, the buyer resells to the consumer.
A great example of this is Samsung, one of Apple’s most important suppliers in the manufacture of the iPhone. Apple also has business-to-business agreements with Intel, Panasonic, and Micron Technology, among others.
The car sector relies heavily on B2B transactions. Many vehicle components are produced independently, and automakers gain them to build cars. Tires, batteries, electronics, hoses, and door locks, for example, are often made by several firms and supplied directly to automakers.
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B2B transactions have a longer sales cycle, but greater order values and more repeat orders. Recent B2B innovators have carved out a niche for themselves by eschewing catalogs and order sheets in favor of eCommerce sites and better-specialized market targeting.
Millennials will account for over half of B2B purchasers in 2020, nearly twice the number in 2012. B2B selling in the internet realm is growing increasingly significant as younger generations enter the age of completing commercial transactions.
Read Also: E-commerce in Simple and Comprehensive Points | ExpandCart
2. Business to Consumer eCommerce (B2C) 🛒
The B2C eCommerce business model is the traditional retail model, where a business sells to individuals in an online mode.
A B2C purchase has a lot faster decision-making process than a B2B buy, especially for lower-value products.
Consider this: deciding on a new pair of tennis shoes is a lot easier than vetting and purchasing a new email service provider or food caterer for your organization.
Because of the shorter sales cycle, B2C companies spend less money on marketing to generate a sale, but they also have a lower average order value and fewer recurring purchases than B2B companies.
B2C doesn't just refer to items; it also refers to services. B2C entrepreneurs have taken use of technologies such as mobile applications, native advertising, and re-targeting to promote directly to their consumers while also making… Click To TweetExamples of the B2C models include online supermarkets, Amazon, Jumia, and Cavaraty.
B2C type of eCommerce has a short sales cycle and a lower average order value, but the good news is that less money is spent on marketing.
3. Consumer to Consumer eCommerce (C2C)🛒
C2C eCommerce site gives the chance for customers to trade, buy, and sell items in exchange for a small commission paid to the site (as the online platform that eases such transactions).
A consumer-to-consumer (C2C) business, often known as an online marketplace, links customers to exchange products and services and makes money by charging transaction or listing fees. In the early days of the internet, companies like Craigslist and eBay pioneered this concept.
C2C firms gain from the self-propelled expansion of motivated buyers and sellers, but quality control and technology maintenance are significant challenges. OLX is a successful example of that type of eCommerce model. eBay and Etsy are also famous C2C sites that allow individuals to sell goods and services to each other, and the site takes a small commission on each transaction.
As a C2C business, you benefit from self-propelled growth by motivated buyers and sellers, but you are going to face a key challenge in quality control and technology maintenance.
4. Consumer to Business eCommerce (C2B)🛒
C2B eCommerce model is growing among the other types of eCommerce businesses. It’s an online commerce business where the consumer sells goods or services to businesses.
Individuals can sell goods and services to businesses through C2B firms. In this eCommerce approach, a website may allow clients to post tasks they need done and have firms compete for the job. Affiliate marketing services are also classified as B2B.
By assisting businesses in hiring freelancers, Elance (now Upwork) was an early developer in this concept.
The competitive advantage of the C2B e-commerce business lies in the price of goods and services.
This strategy allows customers the opportunity to choose their pricing or have firms compete directly for their business.
Recently, this approach has been creatively used to connect businesses with social media influencers to sell their products. Upwork, as we just mentioned, is an example of this type of eCommerce, where this entrepreneur helped companies and big businesses hire freelancers through his website.
beXel is another example of a C2B eCommerce model, where one individual offers a software solution to gas and oil companies.
That’s all for the known or popular types of the various models of eCommerce, but what’s in it for YOU?!
What’s the use of JUST knowing the types?
If you’re stopping here, so probably nothing ☹
But implementing those types in a revenue-making business model is better?
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The 6 Money-Making eCommerce Delivery Types You Can Start Now (some need ZERO budget to start) 💰
Whether you can handle an inventory and manage stock, source a product or manufacture one, or don’t prefer that at all, these eCommerce shipping models are diverse and one will definitely suit you!
💡 Read also: Best Business Ideas to Make Money from Home in 2022
1. White Label is Sweet as Maple
White labeling is sweet because it spares you the hassle of coming up with an idea for a product and going all the way through manufacturing and packaging it. White labeling is an eCommerce business delivery that’s about applying your name and brand to a generic product gained from a distributor.
Companies in different parts of the world offer the white labeling service, where you pick up a product that’s already successfully sold by others, but with your packaging and your label.
Careful though with what you order; the product you order to be packaged and labeled with your name (usually of a minimum quantity to start production) has to be in demand so that you’re not stuck with it for a long time.
2. Private Label Makes You Able
Private labeling makes you able to manufacture a product offsite, with no need for a factory or machines. A merchant engages a manufacturer to develop a one-of-a-kind product that they will sell exclusively. With private labeling and white labeling, you may save money on design and production while gaining a competitive advantage in technology and marketing.
Imagine that you came up with an idea for a product you think is going to be a big hit during summer, or that people are going to love it; do you want to manufacture a thousand pieces right away and God knows what happens next?
Of course not!
Some factories and providers manufacture products for you, based on your plan and requests to meet customers’ specifications. These manufactured products can be shipped to you, to the consumer, or a third party like Amazon.
On-demand manufacturing is a great way to sell a unique product of your design and specifications (even if you do not have the cash to build a factory) or to test a product first in the market before deciding to manufacture it yourself.
3. Dropship and Skip
Dropship the products you went through a third party and skip the hassle of managing inventory, warehousing stock, or dealing with packaging.
All you need to do is set up a store, showcase the products, and convince customers to complete a purchase and pay online. On the other side, the supplier is the one responsible for delivering the actual product to the end-user.
Read Also: How to Launch an Online Store? FREE eBook | ExpandCart
The take here is that you have got to be sure that the supplier is reliable because any delay or defect in the quality will be blamed on your side (you’re the storefront, the salesperson).
Dropshipping is a fast-growing business worldwide, and it costs you nothing to start. You can even build an eCommerce store for free on platforms like ExpandCart, in which your store is integrated with some of the largest dropshipping websites in the world: AliExpress, Knawat, Tagerly, and others.
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4. Wholesale Can’t Fail
Wholesaling needs a lot of money to start, but it won’t fail to make you a good revenue in the short and long term.
Wholesaling and warehousing need you to invest in a quantity of stock to start with and in a warehouse to keep your stock. You’ll also need to keep track of customer orders and shipping information.
Then you list these products online, either on your online store or on eCommerce platforms like eBay, Souq, Jumia, or Noon.
Wholesalers can sell their products as a B2B business model or to consumers in a B2C context.
5. Subscribe is the New Vibe
The subscription eCommerce business model is the new trend; it has a lot of good vibes I’m telling you.
People simply subscribe to a box of products to be delivered to their doorstep on a regular, monthly basis.
As a subscription eCommerce site, you get your money through the regular income stream from the subscription box, or you can reward customers to purchase additional subscriptions or encourage their contacts to subscribe.
As tempting as it seems to start your own eCommerce business, it’s like any other business; it entails some disadvantages that cannot be overseen.
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Every Entrepreneur Should be Aware of These 5 eCommerce Disadvantages
- Some eCommerce startups can cost a lot to set up: buying/developing software, training the employees, and maintaining the entire process.
- Even with the various models of eCommerce, the eCommerce model is not cut for every business. Some businesses cannot survive in this electronic, impersonal environment.
- Customers are concerned about security breaches, like credit card hacking or identity theft.
- Putting up all of your product’s information online (details, prices, etc.) can make your business vulnerable. Competitors can use this information to their advantage.
- It depends on internet connectivity and technology, which is not available for all.
However, the advantages outweigh the disadvantages, and eCommerce is gaining ground day after day. People are trusting online stores more than before, and many do prefer to shop online than having to go down to a physical store.
To Sum Up,
If you’ve got a killer idea or a unique product, you know people need and are going to love, do not hesitate to build your eCommerce store now and start selling online.
Types of eCommerce businesses and types of e-business are diverse and suit many businesses. Any product or service can fit into one of those different models of eCommerce; you just think smartly.
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