What are the different categories of e-commerce business

Nowadays, people, whether living in smaller cities or big metropolises, have the same access to goods and services thanks to the exploding e-commerce.

What is an e-commerce business?

When we talk about e-commerce, then the first thing that comes to the mind of a layperson is the purchase of goods and services through the Internet.

Although this is true, this is just one part of the story.

To understand this industry more comprehensively, you have to look at all the six major types of an e-commerce business.

Six major e-commerce categories

If you look at the last few years, you will find that e-commerce has become an integral part of our lives, especially during the ongoing COVID crisis.

However, e-commerce cannot be defined through a single example, because it is growing at a rapid pace and has different dimensions.

Therefore, to understand e-commerce better, you have to know all the dimensions of this industry.

The following six broad categories comprehensively explain the e-commerce sector.

Business-To-Business (B2B)

B2B e-commerce includes all the electronics transactions of goods that take place between any two companies.

In this model, one business sells its products to another business.

In most cases, the buyers of the goods resell the goods they purchased to the consumers.

However, sometimes the buyer can also be the end-user of the product that was purchased online.

You will find that in the B2B e-commerce model, the sales cycle is much longer, and the order value is higher due to recurring purchases.

This type of e-commerce services is adopted by wholesalers, who advertise and sell their products to the retailers.

It is a great way to compare the prices offered by numerous wholesalers by the retailers directly from their computers or smartphone and chooses one that offers the best deal.

For the wholesalers also this offers a huge advantage in reaching out to a larger market to sell their products and services.

Business-To-Consumers (B2C)

Among the six e-commerce models, B2C is the most common.

Online business transactions take place between a business and its consumers come under its purview.

All those users who use any type of e-commerce platform like Amazon to buy things like groceries, electronic goods, dresses, and countless others, they do it as a part of the B2C online transaction.

Compared to B2B, the purchases are much shorter and of lesser value (in most cases).

As the sales cycle of B2C is comparatively smaller than the B2B businesses, you will find that companies that rely on this model spend less marketing dollars per sale.

Additionally, these businesses also have a lower average order value and the frequency of repeat order is much less than the B2B businesses.

The popularity of this type of online business model is because it allows the consumers to look at innumerable e-commerce sites for the best deals.

They can also read reviews about any products or services by other consumers that allows them to make an informed decision about whether they should buy a product at a particular price or not.

Such a business model is an excellent way for businesses to deal directly with their customers and give them a more personalized shopping experience 24/7 to increase their brand loyalty.

You will find that the maximum number of innovations happen in this model through mobile apps integrated with virtual reality and artificial intelligence to give the customers highly immersive shopping experience.

Consumer-To Consumer (C2C)

In this popular e-commerce business model, consumers can use the e-commerce platform to exchange goods and services amongst themselves.

In such a business model, the e-commerce business earns the money by charging some fees for every transaction that takes place using their application/platform.

Companies like eBay or OLX are a good example of such an e-commerce model that is used by millions of people to buy and sell goods.

This is a great model that encourages motivated buyers and sellers to exchange goods and services, but it faces several issues in terms of ensuring the quality of the goods and services that are exchanged.

Consumer-To-Business (C2B)

This is a non-traditional business model in which the consumers make their services or products available online so that the interested companies can buy them.

Freelancers use this business model to sell their services (content writers, web designers et cetera) or products (stock photos and others).

Websites like Fiverr, Upwork, and freelancers are great examples of this type of e-commerce model.

Business-To-Administration (B2A)

This type of e-commerce model is used for all those transactions that occur between the businesses and the public administration.

In this type of business model, businesses connect with the public administration for a host of services such as getting Social Security, employment and processing of legal documents, etc.

Consumers-To-Administration (C2A)

In this type of e-commerce model, citizens connect with the public administration for a wide range of services that include, filing tax returns, health services, and many more.

Conclusion

In the article, we have covered the most common e-commerce models that people and businesses use for online transactions for buying, selling, or accessing various products and services.

If you are planning to start an eCommerce business, then first you should choose the best eCommerce model as per your business requirement. 

The next step after choosing an effective eCommerce model for your business is to consider eCommerce App Development. Why? Because the majority of users are using a mobile, and it’s easy to target them by developing an eCommerce app. Apart from this, you get a lot of benefits from building an eCommerce app for your business.

To develop an eCommerce app, you can reach out to an eCommerce app development company; they will deliver you the best solution as per your needs.