More people than ever before around the world are using the internet to shop, and that trend looks to continue as worldwide e-commerce sales grow from $3.6 trillion in 2019 to more than $6.5 trillion in 2023.

The COVID-19 outbreak devastated governments across the globe, leading to strict lockdowns that forced physical stores to stay shut and consumers to remain at home. This gave online retail a boost as people went on the internet to carry out their purchases.

With e-commerce business models are getting more complex each year. With tons of products and features, businesses are looking to build a better experience for the buyers and stand out from the competition. Keeping this in mind, I have created a list of what I consider to be the 6 most common e-commerce business models.

What is an E-commerce Business Model

E-commerce, or electronic commerce, is the buying and selling of goods and services over the internet. It’s a way to conduct business that’s largely done through websites, but it can also be done through apps on your phone.

The digital marketplace is the platform for showcasing and selling these products or services. The digital signage systems are integrated with a secured payment gateway facilitating product purchases and financial transactions.

E-commerce Business Models

Business to Consumer (B2C)

The B2C e-commerce model is the most common, and it’s basically the same as any brick-and-mortar retail business. The only difference is that you don’t have to deal with all the hassles of running a physical store, like rent and employee expenses.

You can sell anything from jewelry to clothing to electronics or even groceries online using this model, but you’ll need to be able to handle shipping and returns if you’re going to do well in this market.

This model can be used for almost any type of product or service. Some popular examples include:

-Amazon (books, electronics, clothing)

-Walmart (pretty much everything)

-Target (clothing and home goods)

-Best Buy (electronics)

Business to Business (B2B)

Business to business (B2B) is a type of e-commerce that allows companies to sell their products and services to other companies.

B2B e-commerce platforms are often used by manufacturers, distributors, wholesalers, and retailers, who all use these platforms to find products and services for their business.

B2B e-commerce can also be used for non-business purposes such as dating websites, social media networks, and video streaming sites.

B2B e-commerce websites are often more complex than traditional storefronts because they involve multiple parties and an extensive array of services.

Business to Business to Consumer (B2B2C)

This is a business model in which a company sells products to other businesses, rather than consumers directly. In this model, the company acts as a middleman between suppliers and customers, taking orders and fulfilling them by taking orders from suppliers and delivering the orders to customers.

A company may a company rebrand an item to present it as its own — the end customer understands that they are buying a product or using a service from the original company

Business to Government (B2G)

Business to Government (B2G) is a type of e-commerce that deals directly with government organizations. This can include federal, state, and local governments. The goal is to provide products or services for the government in order to help them be more efficient and effective.

Examples of this model include:

-Selling software or hardware to the government

-Providing consulting services to the government regarding their technology needs

The key to success with this model is having a strong relationship with government agencies. This means that you will need to spend time building relationships with them and understanding their needs. You may also need to adjust your prices based on how much money they have available for purchasing new equipment or software.

The main advantage of this model is that it allows you to sell directly to the government without having to go through multiple layers of bureaucracy, which can be an expensive and time-consuming process. However, the downside is that there are often fewer opportunities for profit because you’re selling to a single customer instead of multiple individuals.

Consumer to Consumer (C2C)

Consumer to consumer, or C2C, is one of the most common e-commerce business models. It’s also known as peer-to-peer (P2P) and individual-to-individual (I2I). With this model, buyers and sellers interact directly with each other. The company functions as a facilitator—it provides an online space for sellers to sell their products directly to buyers. This makes it easy for buyers to find what they’re looking for and for sellers to have access to a huge audience.

This model allows people to sell their items and set their own prices without having to maintain an online storefront.

An example of a C2C e-commerce business would be Craigslist or eBay, where users buy and sell products directly from each other.

Consumer to Business (C2B)

This is most seen in websites that allow individuals (contractors or freelancers) to share work or services they’re skilled in.

This model is a great way for businesses to get help from consumers. For example, a business might post that they need help with their website design, and then individuals will submit bids for how much they’ll charge to do the work. The business can then choose the best bid and hire them!

Upwork is an example of a C2B model, Upwork connects businesses directly with talent (freelancers) so that they can find the right people to help them achieve their goals.

Affiliate marketing services would also be considered C2B. Affiliate marketing is a unique way to promote your products and services, and it’s a great way to get started in the business world. Affiliate marketers are people who promote other companies’ products and services on their own websites or social media profiles. If someone clicks through the link you provide and makes a purchase, you will earn a commission on the sale. Affiliate marketing platforms like Referwo can help you find the right influencers for your campaign.

Takeaway

If you decide to open an e-commerce store, here are 6 business models that you could use. Whichever one you choose will depend on the type of products you sell and the nature of your target market. Remember that no model is the best for everyone. So, choose the one that best fits your skills, experience, and the nature of your business.