Hi, In this topic we will discuss the Types of eCommerce business models which are doing really great and has great potential in future as well.
Before reaching to eCommerce lets understand the definition of commerce. Commerce means the interchange of goods, commodities or services. In other words, commerce is nothing but buying and selling of goods and services.
E-Commerce means electronic commerce in which buying and selling of goods and services happen via electronic network like website or App by using internet. In simple language its online transaction process where consumer buy and supplier sell over internet by using various payment methods.
Broadly eCommerce business models are divided into 6 categories depends on the nature of transaction.
1. Business to Business (B2B):
B2B eCommerce model simply means the transaction between business to business. The best example of this model is Alibaba.com, where only manufacturer and wholesalers sells products in bulk quantity to small retailers.
Both buyer and seller carry VAT or GST number and create Tax invoice of all transaction to get input tax credit. Profit margins are quite low in these transactions but quantity is very high.
To understand process clearly see the business to business model diagram.
2. Business to Consumer (B2C):
B2C eCommerce model is quite famous now days, In this model companies directly sells products or services to customers. Consumer check the images and read the description of product on website or app and place the order.
Companies ship the product via courier companies. In this models margins are high and orders are also high if quality and pricing are good. Amazon.com is the biggest example of this model.
Here are the top 10 eCommerce companies of the world which are working on B2C model. See this B2C eCommerce diagram for good understandings. These types of eCommerce transactions are very common now a days.
3. Consumer to Consumer (C2C):
In this model a customer sells his goods or services to another customer on website or app. For example if someone wants to sell old household goods or car or laptop than he will click some images and upload on websites like OLX with good description.
In this model there is not need of any GST or VAT Tax number because goods are usually old. In this model payments are usually done face to face. Check this C2C eCommerce diagram for understanding the process of consumer to consumer model.
4. Consumer to Business (C2B):
A consumer to the business model is a type of commerce where a consumer or end user sells a product or service to an organization. It is similar to B2C model however the difference is that in this case the consumer is the seller and the business organization is the buyer.
In this kind of a transaction the consumer decide the price of a particular product rather than the supplier. This category includes individuals who sell products and services to organizations. Examine of Consumer to business model are Naurki.com and Monster.com.
5. Business to Administration (B2A):
B2A or business to administration also known as the business to government (B2G). In this model, the businesses and government organization use central websites to share information and do transaction with each other more efficiently.
This types of eCommerce encompasses all transactions conducted online between companies and public administration. This is an area that involves a large amount and many number of services, specially in areas such as fiscal, social security, employment, legal documents and registers.
6. Consumer to Administration (C2A) :
Consumer to administration or consumer to government e-commerce model helps consumers to do the transactions over website like payment of electricity, Gas, paying taxes etc.
See the diagram image given below to understand the consumer to administration model.
I hope that you understand all type of eCommerce models from above examples and diagrams. eCommerce companies are growing leap and bounds all over the world. Amazon.com, Flipkart.com, Alibaba.com, JD.com are the great examples.
In case of any doubt please do comment and raise the query. Please comment Yes or No if you like the post.