Choosing and applying the right business model to suit your eCommerce business is sometimes easier said than done. Especially if you are just getting started as an eCommerce entrepreneur. Once you’ve determined your niche, you need to see which model best suits the target audience of this niche. In this blog , I take a look at the 5 main business models in eCommerce. And what to keep in mind when deciding which model best suits your business plan.
The 5 business models in eCommerce are:
B2B – Business to Business
B2C – Business to Consumer
C2B – Consumer to Business
C2C – Consumer to Consumer
D2C – Direct to Customer
Each model has its own advantages and disadvantages, and it’s important to understand the differences before starting an online business.
B2B – Business to Business
Business to Business is a model that focuses on trading between companies. B2B companies are usually wholesalers, manufacturing companies and distributors. It’s not the largest form of business in eCommerce, but it remains an important part.
Now, especially since SaaS has been on the rise for a number of years, the B2B share in eCommerce is growing.
Do you think a B2B model suits you best? Then ask yourself these questions.
- Is your target audience interested in buying in bulk?
- Do your customers have specific wishes?
- What are your competitive advantages?
- Can you maintain competitive prices and maintain a healthy ROI?
Make sure to research the B2B industry carefully, as it can be quite complex! If you think a B2B model would suit your business, don’t hesitate to get started!
the B2B market could be a tough one.
Often there are special price agreements, and you have to deal with buyers who are only busy getting the best deal for their company. The decision-making process can also take much longer.
Make sure you understand your target audience and what they’re looking for before diving into B2B. It’s not as simple as B2C, but it can be more profitable if you get it right!
B2C – Business to Consumer
In the B2C model, the retailer or eCommerce company sells directly to the consumer. Compared to B2B, B2C is “simpler”. In the sense that B2C are smaller purchases as opposed to selling in bulk through the B2B model. Retailing is easier to maintain than bulk sales to businesses.
This type of eCommerce usually involves products that are less expensive and easier to transport. The most common items sold in this way are clothes, cosmetics, books, music and home electronics. Because of the simplicity of this type of eCommerce, it’s very popular and a lot of retailers have adopted it.
The B2C model does have some disadvantages though. For one, it can be more difficult to build relationships with customers. Also, the retailer has to compete with a lot of other businesses selling similar products. Finally, it can be more difficult to manage inventory and shipping logistics.
Despite these disadvantages, B2C is still the most popular type of eCommerce. This is because it’s simple, convenient and relatively low-risk for the retailer. Consumers also prefer buying products from businesses they know and trust, which is easier to do in the B2C model. B2C entrepreneurs mainly opt for marketing strategies based on online marketing, marketing via influencers and social media marketing. B2C eCommerce entrepreneurs spend more time and effort in getting traffic, marketing and sales conversions.
If you’re looking to start an online business, the B2C model might be a good option for you. It’s simple, convenient and relatively low-risk. However, it’s important to keep in mind the disadvantages of B2C when planning your business. Make sure you have a solid marketing strategy and invest enough time and effort into getting traffic and conversions.
C2B – Consumer to Business
Compared to B2C and B2B, this form is much less known among the general public.
C2B is a Consumer who sells goods or services to a company. This could be anything from handmade jewelry to custom software development. The key advantage of this type of transaction is that the company gets exactly what it needs, while the consumer can get the best possible price for their product or service.
There are a few things to keep in mind when selling to a company as a consumer. First, be sure to have a good understanding of what the company needs and what its budget is. Also, be prepared to negotiate and be flexible with your pricing.
Finally, always be professional and courteous in your interactions with the company. This will help to ensure a positive experience for both parties.
Important: Always discuss the payment term carefully. Because large companies sometimes have a payment term of 3 months. If you have to wait 3 months for your money, this can cause problems. For example, you as an entrepreneur must advance the VAT. So keep this in mind. This can put you in a lot of trouble with the tax authorities.
Marketplaces for freelancers
When it comes to selling through marketplaces like Upwork and Fiverr, there are a few important things to keep in mind. First, be sure to read the terms and conditions of the marketplace carefully. This will help you understand the requirements and expectations of both parties.
Also, be sure to price your services competitively. There is a lot of competition on these platforms, so it’s important to offer a good value for the customer. Finally, always be professional and courteous in your interactions. This will help to ensure a positive experience for both parties.
C2C – Consumer to Consumer
When most people think of buying and selling, they think of businesses engaging in transactions with one another. However, consumer to consumer (C2C) selling is becoming an increasingly popular way to buy and sell products and services. C2C platforms such as eBay and markplaats.nl allow individual consumers to sell directly to other consumers, and there are also a number of Facebook groups where C2C selling is popular.
There are a number of advantages to C2C selling. For buyers, it can be a great way to find unique or hard-to-find products at a lower price than they would find in stores. C2C sellers also have the opportunity to make a profit by selling used or unused items that they no longer need.
For sellers, C2C selling can be a great way to get rid of unwanted items, and it can also be a way to make some extra money. In addition, C2C platforms often have more buyers than other online marketplaces, so sellers have a greater chance of making a sale.
There are, however, a few things to keep in mind when selling or buying products C2C. First, it is important to be aware of the risks involved in any online transaction. Second, buyers and sellers should be sure to check out each other’s ratings and reviews before making a purchase or sale. This can help ensure that both parties are happy with the transaction.
Overall, C2C selling is a great way for buyers and sellers to connect with each other and to get a good deal on the products they want. With a little caution, it can be safe and easy to buy and sell products C2C.
If you’re looking for a way to buy or sell products online, be sure to check out C2C selling! There are a number of platforms and groups where you can find great deals on products from other consumers.
D2C – Direct to Consumer
Direct to Consumer, or D2C, is a business model where companies sell products and services directly to consumers instead of through retailers or other intermediaries. D2C has been around for a long time, but it has become increasingly popular in recent years as more and more consumers shift their buying habits online.
There are several advantages to D2C businesses. First, D2C companies can typically offer lower prices because they don’t have to pay the middleman. They also have a direct relationship with their customers, which allows them to collect valuable data about their preferences and use it to create better products and services. D2C companies also tend to be more nimble and responsive to customer feedback, which can result in a better customer experience.
Finally, D2C businesses can be more profitable than traditional businesses because they don’t have to share their profits with intermediaries. However, D2C businesses also face some challenges, including the need to build a strong brand and create compelling content. They also need to be able to handle customer service and fulfillment themselves, which can be expensive and time-consuming.
Overall, D2C is a growing trend that offers many advantages for both companies and consumers. It’s likely to continue to grow in popularity in the years ahead.
Right now this is the best and the most sustainable way to start a new eCommerce business.
Simply because the middleman makes everything so expensive. Other advantages are that you are in control as a manufacturer or brand. You determine the sales prices and your product or service is not offered for sale on a marketplace like Amazon, eBay, AliXpress. D2C businesses also get valuable customer insights which can be used to improve their products or service. Besides that, D2C businesses are very flexible and can quickly adapt to customer feedback. This often results in a better customer experience. Last but not least, D2C businesses have more profit margin because they do not have to share it with any intermediaries.
However, D2C businesses also have some disadvantages. For example, they need to build a strong brand and create compelling content. They also need to be able to handle customer service and fulfillment themselves, which can be expensive and time-consuming.
In conclusion, D2C is a growing trend that offers many advantages for both companies and consumers. I believe it is here to stay and will continue to grow in popularity in the years ahead.
If you’re looking to get into D2C, there are a few things you need to keep in mind. First, you need to build a strong brand and create compelling content. This is essential for getting people to buy from you. You also need to be able to handle customer service and fulfillment yourself, which can be expensive and time-consuming.
Overall, D2C is a great way to sell products and services directly to consumers. It offers many advantages for both companies and consumers, and I believe it is here to stay. If you’re looking to start a new eCommerce business, D2C is a great option.
If you are an existing brand or manufacturer and you want to sell directly to consumers, pay attention!
In most cases you already have a large and existing sales network with importers, distributors, and resellers. These have made your brand what it is today. They will ask a lot of questions why you will approach the consumer directly. Otherwise, you can quickly see your company go to hell.
Come up with a really good story for this. Otherwise, you can quickly see your company go to hell. You want to avoid this at all times. Hire special advice for this. Dries de Gelder specializes in this. D2C is his bread and butter.
Dries de Gelder knows the ins and outs of D2C. He has been working in this field for many years and knows how to reach the consumer directly. He can help you set up your own shop, advise you on what products to sell, and help you reach your target market.
Do not try to do this on your own. Dries de Gelder can help you every step of the way. He knows what works and what doesn’t, and he can help you avoid the common pitfalls associated with D2C. Contact him today for more information!