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The ecommerce platform has transformed the way people do business worldwide. Today, there are more people shopping online than was the case only five years ago. Due to this change in consumer behaviour, many businesses and leaders are now selling their products and services online.

There are 6 different types of e-commerce business models which can be broadly grouped into two categories depending on;

  1. The type of goods that you sell
  2. The nature of your participants

The type of goods that ecommerce businesses sell can be categorized into 3 pillars. Physical goods, digital goods and services. In terms of the nature of the economic participants — there are 3 major participants in the e-commerce industry. Which are businesses, public administrators and consumers.

Such combinations and interactions create the following types of e-commerce business models:

1. Business-to-Business (B2B) Model

In this ecommerce business model, both participants are businesses. They have a high value and high volume kind of a relationship. Both businesses support and depend on each other. For instance, a manufacturer who buys raw materials online to build certain gadgets which are then bought by other businesses to aid in their operations.

2. Business-to-Consumer (B2C) Model

This ecommerce model refers to when an online business sells a product or service to an individual consumer. For instance, when an online clothing retailer sells clothes to a particular individual, they establish a B2C relationship.

3. Consumer-to-Consumer (C2C) Model

In this model, a relationship exists between an ecommerce business, consumer and another consumer. There are online businesses which allow consumers to sell to other consumers thus creating the C2C online business concept.

4. Business-to-Administration (B2A) Model

Administration is used in this scenario to refer to government entities or public administration. Public administrations also use ecommerce services or products on a daily basis. When there is such a relationship, a B2A ecommerce model is created. It can range from government buying software, consultancy or procuring tangible products.

5. Consumer-to-Business (C2B) Model

This ecommerce business model exists when consumers are the ones who are initiating the demand for certain products or services which are then fulfilled by suitable businesses. For instance, if an individual is going for a vacation, he/she might place her budget estimates and many businesses which are in tourism and hospitality niche will start submitting their offers based on the consumer’s package. Think, a marketplace platform. . . like Uber. 

6. Consumer-to-Administration (C2A) Model

A C2A ecommerce business model exists when consumers interact directly with public administration. Consumers can sell services to government entities or even use online platforms to submit payments or filling for their tax returns. 

No matter the kind of online business that you operate — when you analyze your business operations well, you will realize that you fall under one of the above ecommerce business models. Understanding your business operations will help build close relationships and insights into your target audience. This proves invaluable as it will form the basis of your strategy. Helping you pivot or devise actionable plans that will enable you to maximize your company’s potential and growth.  

From experiences working with clients in all models mentioned above — all prove lucrative. 

The question is, which one is right for you and your business? 

“There are 168 hours in a week-what you choose to do with them is up to you”

Joe Momoh

A digital marketing expert who gives key insights to companies around the globe on their digital marketing strategies, Joe has spent his career identifying tactics that achieve specific business outcomes across various channels, methodologies, approaches and buyers.