Understand the Different Types of Ecommerce Models

Segregating e-commerce business could be dicey, but it is essential to ascertain the basis and aim of these business by classifying them into different segments. Some are same while others are quire difference. The two factors which make most sense here are the kind of good eCommerce business sells and its participants nature.

Type of goods being sold

eCommerce business sells:

  1. Physical products such as furnishings, appliances, devices and books.
  2. Digital items like eBooks, images, videos, program and software
  3. Software like insurance and tickets

Such classification is necessary as it provides the analyst an insight in the business model and the monetary model of the company. The physical goods delivery logistics can be a big challenge for some companies while sellers of digital items don’t have this issue. When you talk about selling tickets, several other factors have to be evaluated like location of the seat, meal preference, refundable vs. non-refundable tickets etc.

Nature of the participants

The major participants in eCommerce are business, consumer and administration. The 6 types of ecommerce are given below:

  1. Business to Business (B2B): This type of eCommerce model involves both parties are business and value and volume of B2B can be huge. For instance, if you are a manufacturer of gadgets which supplies parts online to manufacturers who use them to make their own devices.
  2. Business to Consumers (B2C): Often people think about B2C when they are asked about eCommerce. For instance, Amazon.com. It is one name which pops up when you talk about B2C. Removal of physical stores is the biggest benefit of this eCommerce type, but the logistic costs could be a barrier in its growth.
  3. Consumer to Business (C2B): Though it may appear lopsided in the first look, but eCommerce has empowered consumers to create requirements which is fulfilled by businesses. For instance: job board. A consumer can place his requirement and multiple companies bid to get the assignment. Another example could be a customer posting his requisitions for a tour package and tour operators make offers online.
  4. Consumer to Consumer (C2C): Yes, eBay.com is one of the biggest platform for consumers to sell goods and services to other consumers.
  5. Business to Administration: Administration could refer to government or public administration. There are dozens of government branches relying on e-services or products in one form or the other, especially when it is about employment or documentation.
  6. Consumer to Administration (C2A): Consumers are also involved in this equation. Though government doesn’t really buy any product or service from people, but sometimes individuals use electronic payment to fil tax returns.

Types of eCommerce Business Models

Setting a shop of Facebook could be a quick developing eCommerce segment, hence it has been given the name f-commerce. Similarly, m-Commerce is the name given to mobile eCommerce.

Brick and clicks stands for those sellers with brick and mortar shops and eCommerce site too. Multichannel purveyor comprises of physically mailed catalogs with their retail stores and site. For instance, Dell and Victoria’s Secret.

Dropshipping comprises of a kind of liaison between the supplier and consumer by setting a store front such as the one available on Shopify.

Be clear about the type of eCommerce business you want to enter into to better understand the business model.