E-commerce is a business concept that enables companies and customers to buy and sell goods through the internet. E-commerce business models come in a wide variety, and it's now simpler than ever for innovative founders to use the internet to bring their ideas to life. If you have innovative concepts or ideas that you think can change or touch the lives of other people, you should take your business on the internet through e-commerce. Many types of E-commerce are now billion-dollar businesses as with increasing internet penetration and smartphone usage, people prefer to buy from the internet.
Did You Know? According to Insider Intelligence, a global eMarketer, worldwide e-commerce sales are projected to top 7 Billion USD by 2025.
What is E-Commerce?
E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. E-commerce businesses operate online, typically through a website or an online marketplace, and allow customers to browse, select, and purchase products or services from the comfort of their own homes.
E-commerce has revolutionised the way businesses operate and has made it easier for consumers to shop and purchase products. It has also created new opportunities for businesses to reach a global market and to operate more efficiently through the use of digital technologies.
Types of E-Commerce
There are several different types of e-commerce, which can be categorised based on the nature of the products or services being sold, the business model being used, and the relationship between the business and the customer. Some common types of e-commerce include:
This refers to e-commerce transactions that take place between a business and individual consumers. Online retail is a common example of B2C e-commerce.
B2B refers to e-commerce transactions that take place between businesses, such as the sale of wholesale goods or the procurement of supplies.
The e-commerce transactions that take place between individuals, such as through online marketplaces like eBay or Etsy.
This refers to e-commerce transactions in which individuals sell products or services to businesses, such as freelance work or the sale of content through a platform like Patreon.
This refers to e-commerce transactions that take place between businesses and government agencies, such as the procurement of goods or services by government agencies.
Overall, the type of e-commerce being conducted will depend on the nature of the products or services being sold and the relationship between the business and the customer.
B2B (Business to Business)
B2B refers to the transactions entered between two businesses within the supply chain like Inventory procurement, outsourced production, or distribution.
In a normal supply chain, transactions between businesses are frequent as companies buy parts and goods, like raw materials, to utilise in production. After that, finished goods can be bought and sold between businesses and individuals. Websites for businesses enable potential customers to find out more about their goods and services and get in touch. Businesses can conduct product and service searches on online marketplaces and launch procurement processes using e-procurement interfaces.
B2B2C (Business to Business to Consumer)
B2B2C is a business strategy in which e-commerce companies and portals join with companies that sell goods and services to consumers in order to expand into new areas and attract new Customers. In order to use a certain service, such as an e-commerce website, portal, or blog, a firm that is building a product, service, or solution collaborates with another business. Together, the two businesses market goods, services, and/or solutions that benefit both parties.
B2G (Business to Government)
Business-to-government, or B2G, refers to the relationship between a business and government institutions and agencies. Businesses selling goods, services, or information to governments or government agencies are said to be using the B2G sales model (such as Union, state, or local).
It should be noted that the definition of the B2G e-commerce model is the same as the B2A model (business to administration). Both acronyms allude to business that specialises in supplying goods and services to the government.
C2B (Consumer to Business)
In the C2B model, consumers benefit from flexibility, direct payment, and free or discounted goods and services, while businesses earn from customers' willingness to set their own prices or provide data or marketing to the firm. Reverse auctions, in which customers set the price for a good or service they want to purchase, and situations in which a customer offers a business the chance to sell its goods on the consumer's blog in exchange for a fee are examples of C2B business models.
D2C (Direct to Consumer)
Under the D2C Model, the manufacturer sells the goods directly to the consumer eliminating the need for a distributor, retailer, etc as required in a traditional distribution channel. This way the business benefits from the saving cost on long distribution channel while consumers benefit from having the goods at a low price.
Since the traditional retailer business model is around buying in bulk, a manufacturer would have to start selling individual items if they wanted to start selling directly to consumers. This is essentially the reason why most manufacturers have not yet shifted to a direct-to-consumer (D2C) strategy, as their entire business is based on buying and selling large quantities of goods.
C2C (Consumer to Consumer)
Customer to customer (C2C) business models allow customers to conduct transactions with one another, usually online. Auctions and classified ads are two examples of C2C markets in use. With the development of the internet and the emergence of businesses like eBay, Olx, etc, C2C marketing has become increasingly popular.
Customers profit from product rivalry and frequently find items or products that are hard to find elsewhere. Additionally, because there aren't any merchants or wholesalers, margins for sellers may be bigger than with more conventional pricing strategies.
Value Delivery Method for E-Commerce
A product's design strategy for delivering the most value to users is known as the value delivery technique or method. Your value delivery strategy is the engine if your business model is the car. Here are a few of the delivery strategies used by market disruptors and leaders in the industry -
When a corporation manufactures or obtains a product from a third-party distributor and brand and sells it under its own name and label, the practice is known as white labelling. This can save manufacturing costs while increasing brand visibility. In widely replicated industries like fashion and cosmetics, white labelling is common.
A product sold under a retailer's own brand name is known as a private label but the product is developed by a third party. Everything related to the product or items is under the retailer's control. That covers the product's specifications, packaging, and all other aspects as well.
The retailer receives private branded goods to sell after that. They are the business's own brand goods as if they develop by the brand itself.
Instead of selling your items individually to consumers through a B2B e-commerce model, you can offer them in bulk and at a discount to other businesses, basically acting as the middleman between the manufacturer and the distributor or retailer. A shop will often provide its products at a sizable discount when using a wholesale strategy.
E-Commerce is not a new business model. It existed for decades but, it has become the most popular way to conduct business owing to various features like low cost, and relatively no physical workspace (can be managed from home). Increasing internet penetration is another factor that has boosted the sales on the internet. People nowadays enjoy making purchases through the internet. Many Multinational companies have a business model relying on the internet like Amazon or Flipkart. You as a business owner should take your business online as it opens your operation geography without putting too much of capital on physical asset acquisition.
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