4 Ecommerce Business Models You Should Know

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Determining a business model is important before designing your business. Without it, you will find it difficult to determine the direction of the business and the value you want to offer to consumers. This also applies if you want to run a business online.

So, what are the e-commerce business models? In this article, you will be invited to recognize them one by one.

In addition, you will also learn the types of operating methods that can be used in e-commerce. By understanding them, you will be able to determine the most appropriate way to run your business. Happy reading!

4 Common Ecommerce Business Models

In online commerce, there are at least four e-commerce business models, namely;

  • B2B (Business to Business)
  • B2C (Business to Consumer)
  • C2C (Consumer to Consumer)
  • C2B (Consumer to Business)

These four business models certainly have their advantages and disadvantages. What are they? Let’s discuss one by one.

1. B2B (Business to Business)

As the name implies, companies that run in this e-commerce business model sell their products or services to other business entities.

Consumers in the B2B business model are not necessarily the end users of the goods or services purchased. They can act as resellers and resell them to other consumers.

Therefore, Business to Business tends to have a long sales cycle. In addition, the marketing effort required to attract B2B consumers is heavier than other business models.

However, the advantages of this type are high levels of sales and customer loyalty.

Companies with this e-commerce business model usually offer things that are not far from a business inventory, such as office equipment, factory machinery, and other industrial equipment.

Not only that, digital products and services are also a common commodity in B2B e-commerce. Examples are software and web hosting.

Famous Indonesian B2B companies include Electronic City and Mbiz . Both offer a wide range of industrial and household electronics needs. In fact, Mbiz also sells office building maintenance services.

2. B2C (Business to Consumer)

B2C is the most common e-commerce business model, where companies sell to end users .

In contrast to B2B, this business model does not require heavy marketing efforts. Consumers generally also don’t take long to want to buy from a Business to Consumer business.

However, most B2C consumers are only retailers. In addition, consumer loyalty in this type of e-commerce is usually low.

As you know, companies engaged in the Business to Consumer sector offer a variety of products and services. Starting from daily necessities to entertainment.

Examples of B2C companies in Indonesia are Lazada and Shopee.

3. C2C (Consumer to Consumer)

Fellow consumers can also buy and sell goods. This is what characterizes the C2C business model.

Consumer to Consumer businesses usually rely on ad listing sites, marketplaces , and forums to market their goods. In Indonesia, this type of e-commerce is often found on OLX and Kaskus .

C2C business is loved because of the short business cycle. Consumers generally know what they want. Therefore, the perpetrators of this business model do not need to work hard to market their wares.

Unfortunately, this e-commerce business model cannot be relied on as a main source of income. In addition to the price of goods that continue to decline, sellers are also easily experiencing difficulties in controlling the quality.

4. C2B (Consumer to Business)

In addition to fellow individuals, consumers can also sell to businesses or companies.

In contrast to C2C whose merchandise is in the form of products, C2B actors usually offer services to their consumers. Therefore, freelance workers are included in this business model.

The perpetrators of the Consumer to Business business model usually market their services using a website. However, not a few also rely on service listing sites. In Indonesia, examples of such sites include Upwork and Freelancer .

Even though the perpetrators are consumers, this e-commerce business model requires a high level of marketing effort. This is necessary because there are many competitors and corporate consumers choose service providers very carefully.

Ready to Define Your Ecommerce Business Model?

As you have learned in this article, the ecommerce business model is divided into four:

  • B2B (Business to Business)
  • B2C (Business to Consumer)
  • C2C (Consumer to Consumer)
  • C2B (Consumer to Business)

We hope this article can help you determine the right business model for your online business. If you have any questions, don’t hesitate to leave a comment in the column provided below.