About Me >>   Master's Degree >>   IT-647 - Web Site Construction and Management

SNHU - IT-647 - Web Site Construction and Management
Written by: Chris Bell - January, 2016

E-Commerce Models - Business to Consumer - B2B | B2C | C2B | C2C | B2G

The act of doing business involves the process of buying something and selling something, as a business or as a consumer, to a business or to a consumer. Businesses and consumers can also buy from the government and sell to the government which creates about 7 different e-commerce business models. There is no best approach in a general sense, however there are better approaches to making money depending on what category of business one is conducting.

Business to Business - B2B

Business to Business is one of the most common ways of conducting e-commerce transactions. For instance, businesses that manufacture products sold in Walmart stores are operating under a business to business e-commerce model because they are a business selling products to another business. Manufacturers such as www.southwire.com are B2B companies because they have strict policies to only sell to a limited distribution chain. Businesses can apply to Southwire to be a distributor which means they are held to annual minimums in order to remain connected. An advantage for Southwire is that they constantly have big orders to send to companies at once, rather than sending one million products to one million customers. Southwire relies on their distribution chain to sell products to consumers. A disadvantage for Southwire is that they can't control the pricing of their distributors or the quality of packaging that's used to ship the product to the consumer. Perhaps Southwire could get a bad reputation that wasn't actually their fault.

Business to Consumer - B2C

Business to Consumer is another common way of conducting business which includes retail stores, restaurants, and even amusement parks. Restaurants, for instance, buy food products as a B2B transactions while selling products as a B2C transaction. One of my favorite restaurants near SNHU is www.fratellos.com, a B2C company that offers great food and a great atmosphere for consumers. An advantage for B2C companies is that it can be easy to penetrate a second area like Fratello's did when they opened a second location in Nashua NH. Many locals already knew that it was a good restaurant with quality food and daily entertainment, so it was an instant success. A disadvantage of B2C e-commerce models is that it's difficult to hit a $1 million dollar customer. Instead they have to continue to promote products, create word of mouth or social media attention, and accumulate numerous repeat customers in order to stay in business.

Consumer to Consumer - C2C

Consumer to Consumer e-commerce is conducted on eBay and Craigslist. Individuals may have new or used products that they sell on eBay to another individual. That's consider a C2C transaction which also happens on other websites such as Etsy, Amazon and Google products. Ebay's website, www.ebay.com, is a great example of C2C e-commerce because consumers are interested in buying a used product for a cheaper price. That advantage, along with the ease of uploading a product, image and description, make eBay a great C2C e-commerce example. A disadvantage, however, is that eBay charges high fees to list and sell products, and if you product doesn't sell in the allotted time you must repay the listing fee to continue showing your product. Craigslist is a good alternative if you are worried about the fees because they don't charge any fees to list on their website.

Consumer to Business - C2B

Consumer to Business transactions occur online when, for example, a Blog owner sells advertisement space to Target on their Blog. In that scenario a consumer is selling something to a business. Also, someone with a certain skill can provide a service to a company without being in business themselves, such as a consumer building a website for a local small company. Here is an example of a C2B website that offers a Lending Tree advertisement at the top of the page, www.thefreemortgagecalculator.com. The advantage of this website is that the owner doesn't have to sell mortgages, meet with customers or pay for everyday business operation expenses in order to make money. If, and when, the Lending Tree advertisement is used by a visitor, the website owner gets paid a commission from Lending Tree for the lead. Two disadvantages of C2B transactions are that one must be well versed in web design to create such a website and the amount of money earned is far less than what could be earned by selling the mortgage directly to the consumer instead.

Business to Government - B2G

Business to Government is solid transaction because they can't exactly go bankrupt. As the business, one will always get paid for the products or services sent to the government. It can be a very competitive e-commerce market for B2G because every business can see the previous transactions and bid on the new RFQs and RFPs easily. Here is a government website that opens bids for businesses with an online bidding system, https://www.dibbs.bsm.dla.mil/ra/login.aspx. If the business provides an exact product, within the delivery time frame, and under the previous price, then the website awards the contract automatically to the lowest bidder. Advantages of B2G are that it's easy to start quoting and it's guaranteed that you'll get paid in the end. Disadvantages include low margin sales, intensive documentation and labels. All orders must include RFID, (Radio Frequency Identification) tags and bar codes on every label.

Each e-commerce model proves to have advantages and disadvantages that people must consider before being a consumer or a business.