Advantages of B2B and B2C

• Increased Awareness
• Better Interaction
• Better Service – Speed, Secure, Easy Administration
• Refined Messaging
• Addition of new target resulting into addition of revenue
• Increased brand awareness through an additional channel
• Unlimited marketplace
• Optimized search experience
• Process Automation
• Cost Minimization

E-business Models based on the relationship of Transaction parties

1. Government - to – Citizen (G2C)

Model	Description	Examples
B2B	Sells products or services to other businesses or brings multiple buyers and sellers together in a central marketplace	MetalSite.com, VerticalNet.com, SHOP2gether.com
B2C	Sells products or services directly to cunsumers	amazon.com, autobytel.com, eDiets.com
C2B	Consumers fix price on their own, which businesses accept or decline	Priceline.com
C2C	Consumers sell directly to other consumers	Ebay.com, InfoRocket.com
G2B	Used by government to trade and exchange information with various business organizations.
B2G	Government uses B2G model website to approach business organizations.	iGov.com
G2C	Government uses G2C model website to approach citizen in general.

Difference between B2B and B2C

The volume of B2B sales is much greater than that of B2C sales.

“Buying one can of soft drink involves little money, and thus little risk”.

The purchase of B2B products is much risker than B2C products, because purchasing the wrong product or quantity, or at the wrong terms, can put the entire purchasing business at risk.

B2B companies behave differently when buying. Purchases are usually made by committee, and decisions are specification-driven.

(“The decision-making process for B2B products is usually much longer than in B2C”. )

B2B companies avoid mass media when promoting their brand, instead targeting their customers directly through trade shows, specialized magazines, etc.

(“Brand loyalty in B2B is therefore much higher than in consumer goods markets”).

Government - to – Citizen (G2C)

Government uses G2C model website to approach citizen in general. Such websites support auctions of vehicles, machinery or any other material.

Such website also provides services like registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce average time for fulfilling people requests for various government services

Government - to – Business (G2B)

Government uses B2G model website to approach business organizations. Here, the seller is a government entity and the buyer is a business.

Such websites support auctions, tenders, taxation and application submission functionalities.

Business - to – Government (B2G)

B2G model is a variant of B2B model. Such websites are used by government to trade and exchange information with various business organizations.

Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government.

Consumer - to – Business (C2B)

In this model, a consumer approaches website showing multiple business organizations for a particular service.

Consumer places an estimate of amount he/she wants to spend for a particular service. For example, comparison of interest rates of personal loan/ car loan provided by various banks via website.

Business organization who fulfills the consumer's requirement within specified budget approaches the customer and provides its services.

It is also called a reverse auction or demand collection model, which enables buyer to name their own price, often binding, for a specific good or service generating demand. 

For example – ReverseAuction.com (travel, autos, consumer electronics) and priceline.com(travel, telephone, mortgages). 

Consumer - to – Consumer (C2C)

Website following C2C business model helps consumer to sell their assets like residential property, cars, motorcycles etc. or rent a room by publishing their information on the website.

Website may or may not charge the consumer for its services. Another consumer may select to buy the product of the first consumer by viewing the post/advertisement on the website.

Thus in C2C business model, consumers sell directly to the other consumers via online classified ads and auctions, or by selling personal services or expertise online.

For example – ebay.com (auction) and TraderOnline.com (classified ads),Hamrobazaar.com

         

Thus in C2C business model, consumers sell directly to the other consumers via online classified ads and auctions, or by selling personal services or expertise online.

For example – ebay.com (auction) and TraderOnline.com (classified ads)

There are a number of new consumer-to-consumer expert information exchanges such as AskMe.com, abuzz, InfoRocket.com (one of the first question-and-answer marketplaces) which is an person-to-person auction format. 

Business - to – Customer (B2C)

Website following B2C business model sells its product directly to a customer. A customer can view products shown on the website of business organization. The customer can choose a product and order the same. Website will send a notification to the business organization via email and organization will dispatch the product/goods to the customer. B2C enterprises include bestbookbuys.com and gartner.com. Most B2C models generate revenue from direct sales and processing fees. B2C also is known as electronic retail or e-tail and may include purchases such as airline tickets, entertainment venue tickets, hotel rooms, and shares of stock.

Some B2C e-businesses provide high-value content to consumers for a subscription fee, for example, Wall Street Journal (financial news and articles), Consumer Reports (product reviews and evaluations), and eDiets.com (nutritional counseling).

Some of the major advantages of B2C are;

i. inexpensive costs, big opportunities

ii. Globalization

iii. Reduced operational Costs

iv.  Customer convenience

v. Knowledge management

vi. Disintermediation

vi. Disintermediation

In traditional commerce, there are intermediating agents like wholesalers, distributors, retailers between manufacturer and consumer. In B2C website, manufacturer can sell products directly to consumers. This process of removal of business layers responsible for intermediary functions is called Disintermediation.

How B2C Works

•      Visiting the virtual mall

•      Customer registers

•      Customer buys products

•      Merchant processes the order

•      Credit card is processed

•      Operations management

•      Shipment and delivery

•      Customer receives

•      After-sales service

Business - to - Business (B2B)

B2B is that ebusiness model in which a company conducts its trading and other commercial activity through the internet and the customer is another business itself.Website following B2B business model sells its product to an intermediate buyer who then sells the product to the final customer.B2B implies that seller as well as buyer is business entity.Some of the leading items in B2B e-Commerce are Electronics, Shipping and Warehousing, Motor Vehicles, Petrochemicals, Paper, Office products, Food, Agriculture.

The major advantages of B2B are as follwos;

• Direct interaction with customer.
• Focussed sales promotion
• Building customer loyalty
• Scalability
• Savings in distribution costs

Key technologies used in B2B e-commerce;

• Electronic Data Interchange (EDI) − EDI is an inter organizational exchange of business documents in a structured and machine process compatible format.
• Internet − Internet represents world wide web or network of networks connecting computers across the world.
• Intranet − Intranet represents a dedicated network of computers within a single organization
• Extranet − Extranet represents a network where outside business partners, supplier or customers can have limited access to a portion of enterprise intranet/network.
• Back-End Information System Integration − Back End information systems are database management systems used to manage the business data.

The B2B ecommerce is further classified depending on who controls the marketplace: the buyer, the supplier or the intermediary.

Supplier Oriented marketplace − In this type of model, a common marketplace provided by supplier is used by both individual customers as well as business users. A supplier offers an e-stores for sales promotion

Buyer Oriented marketplace − In this type of model, buyer has his/her own market place or e-market. He invites suppliers to bid on product's catalog. A Buyer company opens a bidding site.

Intermediary Oriented marketplace − In this type of model, an intermediary company runs a market place where business buyers and sellers can transact with each other.

Type of e-commerce/E-business model

E-business Models based on the relationship of Transaction parties

• Business - to - Business (B2B)
• Business - to - Consumer (B2C)
• Consumer - to - Consumer (C2C)
• Consumer - to - Business (C2B)
• Business - to - Government (B2G)
• Government - to - Business (G2B)
• Government - to - Citizen (G2C)

Type of e-commerce/E-business model

Broadly categorized as :

• E-Business model based on relationship of transaction parties
• E-Business model based on the relationship of transaction types
• Classification by revenue model
• Classification by distribution channel

Classification by revenue model

A revenue model may comprise –

(a.) Product Sales Model that charges customers directly for the products or services they buy;

(b.) Subscription Model that charges a fixed monthly or annual rental for the service;

A revenue model may comprise –

(c.) transaction fee model that charges a service fee based on volume and value of the transactions offered;

            advertising support model that charges advertisers instead of charging users; and

            sponsorship model that provides sponsorship by companies for non-financial reasons

Classification by distribution channel

A distribution channel may comprise –

(a) Direct marketing where manufacturers such as Dell, Nike, Lego or Sony market directly from company sites to individual customers;

(b) Pure play e-tailors who have no physical stores, only an online sales presence. Eg-Amazon.com

(c) Click-and-mortar retailers who are traditional retailers with a supplementary website, like walmart.com

Business model

A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers.

It is the method of doing business by which a company can sustain itself and generate revenue.

The business model spells out how a company makes money by specifying where it is positioned in the value chain.

Some models are quite simple.

A company produces goods or services and sells it to the customers. If everything goes normal, the revenues from sales exceed the cost of operation and the company realizes profit.

Whereas, other models can be more complicated eg- Radio and television broadcasting. The broadcaster is a part of a complex network of distributors, content creators, advertisers, and listeners or viewers. In this case, we cannot clearly state who makes money and how much, it depends on many competing factors.

The concept of e-business model is similar to business model but used in the online presence, i.e. the sustainability is attained electronically.