Business | 10 min read
Types of eCommerce Business Models and Platforms
When you think about the business you want to run, what type of model will you choose? Will it be B2B, B2C, C2C, or C2B? Interested in eCommerce, but don’t know where to start? In this article we rounded up the answers to the most common questions.
eCommerce stands for online selling on marketplaces, where people make electronic transactions to buy specific items and goods. The variety of business transactions contributes to the variety of eCommerce business models.
Ecommerce Business Classifications
Before, we briefly described the types of websites including the eCommerce ones, however, the topic has to be analyzed more thoroughly. There are 6 basic types of eCommerce businesses referred to differently, based on the function they fulfill — Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-Business (C2B), Business-to-Administration (B2A) and Consumer-to-Administration (C2A). Each type represents a different purchasing dynamic.
B2B: Business-to-Business eCommerce
A B2B model focuses on online order transactions between 2 or more businesses. Wholesalers, manufacturers, distributors belong to the B2B sellers. The B2B eCommerce examples that you know for sure are Alibaba, Grainger, Grammarly, etc. Other examples include wholesale suppliers that sell products to retailers and suppliers of business supplies such as office materials or branded employee apparel.
B2C: Business-to-Consumer eCommerce
B2C eCommerce is a model where a business sells goods or services to individuals. The B2C retail is the most common type of the eBusiness model, both online and offline. The examples of the B2C businesses are the most common — these are Spotify, Netflix, Tesco, etc.
C2C: Consumer-to-Consumer eСommerce
The idea of C2C differs from the previously mentioned eCommerce types. As consumers have become more confident in online business, C2C eCommerce has risen greatly. These sites allow customers to trade, buy, and sell items in exchange for a small commission paid to the site. The greatest examples of C2C eCommerce are Amazon, eBay, Craigslist, OLX.
C2B: Consumer-to-Business eСommerce
C2B is an eCommerce business model where consumers sell goods or provide services to businesses. Individual consumers provide products or services to an organization. Freelance artists, writers, designers, and software developers serve business needs and engage in C2B transactions. The C2B examples include UpWork, Google Adsense, Commission Junction, and Fotolia.
Government/Public Administration eСommerce
This type of eCommerce business model involves managing transactions between government/public administrations and businesses or consumers. There are 2 ways the transaction can be conducted:
B2A: Business-to-Administration — a business provides an online service for the government. A good B2A eCommerce example is Accela, which provides government agencies with software that helps support constant consumer access to government services, and exchange information more efficiently.
C2A: Consumer-to-Administration — individuals pay post concerns, tax fees or insurance directly from their local governments/authorities.
Revenue models for different types of eCommerce businesses
You can also call them “value delivery methods”. Each of them has its benefits and challenges, and many companies can use several of them simultaneously. Knowing what delivery method to consider will help you think about what opportunities and difficulties they can bring.
1. D2C – Direct to consumer.
The Direct-to-Consumer (D2C) model is popular among manufacturers and CPG (Consumer Packaged Goods) brands that want to enter the market, avoiding a middle-man entity. Shortly, this is a low barrier-to-entry eCommerce value delivery method that allows manufacturers and CPG brands to sell directly to consumers.
2. White label and private label
A white label brand describes any product manufactured by one company and sold by another company. Retailers put their own brand and model number on the end product.
A private label brand is any product produced for exclusive sale by a specific retailer. In private labeling, a retailer hires a manufacturer to create a unique product for them to sell exclusively.
The examples of these models are everywhere. You can note the products in the supermarket or check the cloth manufacturers in stores. Store brands are almost always white-labeled products.
The wholesaling method means that a retailer offers its product in bulk at a discount. Wholesaling is a traditional practice for B2B eCommerce, but many retailers have offered it to budget-conscious consumers in a B2C context.
Casey’s Distributing is the wholesaler of sports memorabilia. Casey’s became one of the largest distributors of licensed sports memorabilia in the United States, selling over 40,000 different products.
Dropshippers connect buyers with manufacturers. The examples of dropshipping stores are Inspire Uplift, BlueCrate, Meowingtons, Shopolis, Dude Gadgets, HYGO.
5. Subscription service
This is an eBusiness model in which a customer must pay a fixed price on a regular basis to have access to a product. Subscription service has brought much convenience to many businesses and savings to customers. The best subscription model examples include Netflix, Spotify, Zipcar, and all SaaS companies.
The companies mentioned above are successful representatives of each revenue model. Before we move to the eCommerce platforms that you can consider for your business, we want to pay your attention to the importance of custom website design.
A secret key to succeed in eCommerce business
Once you have made the decision what eCommerce business model you want to apply, choose the path that best suits your business — a custom built website. The biggest advantage of getting a custom web design is that it will make your digital product stand out in today’s saturated web environment and give you a competitive edge.
Custom built websites involve a team behind your business. It starts with a creative process to understand who your target audience is, who you want to reach, how you want the website to function and look on the Internet.
There are also SEO rules to follow when building a site and not all themes are capable of abiding by these rules. Custom websites are more search engine friendly than website templates so they tend to rank higher on the search.
The developer is able to optimize the site during creation to allow for Google and other search engines to read each page and give the end user a more relevant search result thus, giving custom built sites naturally a better ranking on the system. Though it requires more teamwork than template websites, you’ll love the final product.
A custom website doesn’t only adapt to your business needs in a better way but it also gives you the possibility for incorporating your company’s branding into it. Custom website design has a direct effect on your company’s brand and how your audience follows your business.
A professional brand designer together with an illustrator can empower your brand and make your website attractive, so you won’t lose potential customers simply because they are not impressed by the brand image.
Custom built websites tend to take longer than themes, this is because everything is being built and catered to a particular business. However, it will save you time in the long run because when it’s built from the scratch it’s a lot easier to customize the site to ensure it does exactly what you want.
Cadabra Studio makes custom website design with SEO-friendly codes, increasing the chances of appearing in Google searches. We can build and design the website that you have in mind for your business from scratch at any eCommerce platform.
Once you’ve identified who you are selling to, you need to think about where you want to sell. We’ve rounded up 3 global eCommerce platforms you may find interesting and applicable for your business.
WooCommerce is a platform that enables you to run the eCommerce and affiliate site. It works with WordPress that turns any website into a functional eCommerce store. Also, you can use extensions to integrate payment gateways, social media, 1-click selling, email marketing, and shipping.
Ecwid is a free shopping cart that allows people to create an online store and sell everywhere from Facebook to mobile. The name “Ecwid” means the eCommerce widget. This platform lets people sell products on an existing site by adding a snippet of code to it.
3dcart is serving over 22,000 online businesses with clientele. The platform has some practical features like unlimited storage, no transaction fees and support of multi-channel selling.
Now when you have deep knowledge in eCommerce businesses, platforms, and value delivery methods existing on a modern global market, you’re ready for changes. eCommerce creates many opportunities for your business. Cadabra Studio has custom-made solutions that work for your audience and product.
Keep reading the Cadabra Studio blog, where we write many useful articles and tips that help your business succeed. If you need a consultation, don’t hesitate to contact us. We help your business grow!