If you are setting up an online business and you are in the process of defining your business model, you will be interested in learning about the 5 types of eCommerce there are. Types of eCommerce are defined based on the nature of the business involved in each part of the transaction.. A company selling to another company is not the same as a company selling to individuals. Nor are private individuals who sell or exchange goods among themselves.
Basically there are 5 types of eCommerce: B2B, B2C, C2C, B2E and G2C.
Let’s take a closer look at their differences.
1. B2B eCommerce
B2B eCommerce, also called business to business, is a type of eCommerce in which the commercial transaction takes place between 2 companies.. This type of transaction does not involve end consumers or individuals, only companies. The typical example for a B2B business model is that of a wholesaler and a retailer, where the wholesaler sells to the retailer, who in turn sells to the end customer. There are 3 types of B2B eCommerce:
- Seller seeks buyers
- Buyer seeks sellers
- Intermediary seeks to bring about a transaction between buyer and seller
- To set up a B2B business, you need to have extensive knowledge of the industry you will operate in.
- You should also have experience in negotiating large quantities and volumes, and in the entire logistical process involved in wholesale transactions.
- We have a comprehensive email marketing guide specifically for B2B businesses
2. B2C eCommerce
This type of eCommerce, also called business to consumer, is the one you are probably most familiar with. The commercial transaction takes place between a company and a consumer or private individual. In general, any online shop that you can think of forms part of this type of eCommerce.
- If you want to get started in B2C online quickly and without significant investments, opt for plug&play cloud services such as Oleoshop or Shopify.
- In B2C, it is important to position oneself in very specific market niches. In 2016, half of every dollar sold in eCommerce went to Amazon, so chances are that with a generalist offer, you won’t be too successful.
If you are interested in learning more about the differences between the B2B model and the B2C model, we recommend taking a look at this post.
3. C2C eCommerce
C2C eCommerce (consumer-to-consumer) takes place between consumers or end users. This model does not involve wholesalers and suppliers directly. It is individual consumers who offer second-hand products for sale that they no longer use. Before the dawn of the internet, this type of transaction took place in the USA between neighbours at garage sales. Nowadays, the internet allows anyone to sell anything they no longer use to other consumers like themselves, online. The sophistication of C2C platforms has reached the point where there are platforms that specialise in product categories. Some examples of C2C eCommerce:
Even C2C eCommerce platforms have emerged in that usebartering and swapping. Such is the case of Neighborgoods, whose basic idea is the exchange of objects between neighbours, to prevent having to buy bulky objects for a single use.
4. B2E eCommerce
This type of eCommerce, also called business to employee, is a type of eCommerce in which the transaction occurs between a company and an employee. These are all those products that a company makes available to its own employees for purchase, generally at a lower price or with additional benefits. These products can usually be purchased through an intranet or an employee-specific online store. This type of eCommerce is a key element in the strategies known asEmployer Branding. Employer Branding is part of a context in which most economic industries are already mature, and one of the most important things that make companies stand out is the talent of their employees. Within this context, Employer Branding has the objective of demonstrating that X company is a better place to work than its competitors in the eyes of its potential employees. Employer Branding includes strategies such as benefits for employees (annual bonuses or better maternity leave) or the possibility of buying company products under better conditions (B2E).
- Even if you are small, you can be a B2E eCommerce. With something as simple as a discount code, your employees can buy your products at a better price.
- Use B2E to motivate your employees and build loyalty as an employer. If the benefits are of interest, they will stay with your company longer.
5. G2C eCommerce
And finally, G2C or Government to consumer eCommerce. This is a somewhat special type of eCommerce. This occurs when a state, regional or federal government provides its citizens with an online platform to carry out processes and pay taxes. It is considered eCommerce because financial transactions take place. However, its primary benefit is that it saves time and public resources on low-value work. G2C allows you to automate processes, have greater control over transactions and save time for everyone. These are the main types of eCommerce. Now that you know about them, if you are thinking of setting one up, we recommend the article “How to sell online with no budget and no knowledge of programming”, which details all the keys to setting up an online store from scratch. Choose one and base your online business on that model. Which one best fits what you have in mind? Let us know in the comments. Images| Fotolia.