Topic Name - Different Business Models.
NAME - DEPARTMENT - Nitin Kumar Chaurasia
COMPUTER SCIENCE AND ENGINEERING (CSE)
SEM - 8th sem
SUBJECT CODE - PEC-CS801A
SUBJECT NAME - E-COMMERCE AND ERP
UNIVERSITY ROLL - 10800119043
REGISTRATION NO - 038606 OF 2019-20
CONTENT
01 What is an Ecommerce Business Model?
02 What do You Want to Sell?
03 Types of Ecommerce Business Models
04 Conclusion
What is an Ecommerce Business Model?
An ecommerce business model refers to how a business operates to sell goods
and services online. There are 6 main types of ecommerce business models,
namely Business-to-Government (B2G), Business-to-Business (B2B),
Business_x0002_to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-
Business
(C2B), and Business-to-Business-to-Consumer (B2B2C).
In order to find the right ecommerce model for your business, you need to
define two things. Firstly, you will have to define who you will sell to, and then
define how you will position what you have to sell. Then, figure out your
ecommerce business plan. This will define how you will attract customers and
how they will engage with your product. Lastly, figure out your delivery
framework, by assessing what will work best for your ecommerce business.
What do You Want to Sell?
The beauty of online commerce is that you can sell pretty much anything. However, it is always a good idea to
start with a small range of products. Your store can sell physical products (clothing or shoes), digital products
(eBooks are a good place to start), or services such as babysitting.
Let’s see what type of products are currently being sold online and how you can tap their market.
Physical Products
This is the most commonly sold commodity on ecommerce stores. Physical products (pretty much anything that
requires packing, shipping and delivery) often achieve the highest sales.
Analyze your chosen niche and find the opportunity gaps. This covers all the aspects of the industry that are
underserved. Similarly, try to analyze the pain points of the target customers.
Next, conduct keyword research on the product you wish to sell. This way, you can pinpoint the demand for
your product that will help you plan your inventory and order placements.
Digital Products
There are many products that can be delivered to a customer online. Are you a web designer, content writer, or
drawing artist? You can create an ecommerce store around digital products. Piracy and Copyrights infringements
is a serious challenge for such stores. Another important requirement is the FAQ and Legal sections that cover the
mechanism of product delivery and the copyright status of your offerings
Services
If you have a crew of skilled carpenters, or house cleaners, or you are an expert hair
stylist who offers to visit the customer’s residence, why not create a website to sell these
services online? You can significantly increase the demand for your services by creating a
comprehensive FAQ section and a Legal section detailing exactly what you are offering
and what the customers can expect.
Types of Ecommerce Business Models
1. Business-to-Business (B2B)
If the nature of your products or services is geared towards meeting the needs of businesses, setting
up a B2B
strategy is your best bet. Networking and reaching out is a bigger part of this strategy. A big
advertising budget is
not of much help. The most important challenge you would face is convincing established businesses
that your
products/services are a great fit for their processes.
The advantage of this business model is that order sizes are usually large, and repeat orders are very
common, if
you maintain the quality of your products and services. An example of a great B2B model is Media
Lounge
2. Business-to-Consumer (B2C)
This is the model you should adopt if your products/services are targeted primarily
towards individuals. The potential customer finds your website and determines whether
your product could address their pain points
3. Consumer-to-Consumer (C2C)
While B2B and B2B business concepts are familiar, Customer-to-Customer (C2C) is a concept unique
to ecommerce. This is mainly due to the sheer demand of the platforms such as Craigslist, OLX, and
eBay.
These platforms allow their users to trade, buy, sell, and rent products and services. In all
transactions, the platforms receives a small commission. This business model is complex
and requires careful planning to operate. Many platforms have failed, generally due to
legal issues
4. Consumer-to-Business (C2B)
Customer-to-Business (C2B) business model is another great concept that is popular mainly
due to platforms that cater to freelancers. In C2B, freelance workers work on tasks
provided by clients. Most of these clients are commercial entities and freelancers are often
individuals. In simpler terms, consider C2B is a sole proprietorship serving larger businesses.
Reverse auction websites, freelance marketplaces, affiliate marketing all form part of this
business model. Again, this model requires planning due to the legal complexities involved.
5. Business to Government (B2G)
Business to Government (B2G) is an ecommerce business model where a business markets
its products to government agencies. If you want to choose this ecommerce business
model, you will have to bid on government contracts. Governments usually put up requests
for proposals and ecommerce businesses then have to bid on government projects. In most
cases, a government agency would not come to place an order on your ecommerce
website. However, some local government agencies are exceptions to the rule, depending
on their needs.
6. Business to Business to Consumer (B2B2C)
When a business sells products to another business, and then that business sells to the
consumers online, this is what is defined as B2B2C ecommerce.
There are three parties involved in this type of ecommerce business model. For example, if
you choose to go with it, you will have to partner with another business, and only then can
you sell its products and offer the partner a commission for each sale.
Ecommerce store owners choose this business model mainly for new customer acquisition.
This happens because even though customers are already familiar with the partner’s
products, they can’t order from them online, due to obstacles such as geographical
location, hefty shipping costs, and others.
Hence, this ecommerce business model is most suitable for new ecommerce store owners
Conclusion
The emergence of e-commerce is notably one of the greatest
innovations of modern times. E-commerce has revolutionized business
practices by effectively addressing issues of cost, reliability and market
competitiveness. Today, businesses are quickly adapting to B2C, B2B,
C2C and m-commerce models as a conformity to modern business
practices. Apparently, companies, products and services that used
conventional business practices can now subscribe to new models as a
matter of necessity
Thank you