Types of e-Commerce Businesses: Understanding the Differences

e-Commerce

E-commerce has become the new way of doing business inside the digital world nowadays. It has risen exponentially across the years and has grown into a wide variety of types to fit the needs of every business and/or customer. You can’t just jump right into e-commerce without fully understanding the types that exist today and knowing the differences of each type.

The process of classifying the types of e-commerce businesses is a little bit tricky – not at all daunting but it is essential to understanding the fundamentals behind them and the purpose why it is segregated into different categories. As you go through this article, you will eventually realize that some of the types of e-commerce businesses may look a lot similar however, there are clear and definitive differences that will help you tell which one from the other.

Before we go down and jump right over our list, let’s take a look at the two parameters that govern e-commerce – type of goods sold and the nature of the participants.

The Types of Goods Sold

In the e-commerce world, the following are what the businesses sell:

  • Physical goods, such as gadgets, books, furniture, appliances, fashion wear, home tools, toys, etc.
  • Digital goods, such as e-books, software, videos, music, images, texts, etc.
  • Services, such as insurance, tickets, work, etc.

These classifications of the types of goods sold enables the analyst to get an insight of the business model as well as the financial model of the enterprise. That said, it is extremely important. The logistics also play a big role into this. Physical goods require the physical delivery of goods to the buyer and that whole process involves actual end to end logistics. In most cases, there’s a challenge in delivering the goods due to supply chain specifics.

On the other hand, businesses who sell digital goods don’t encounter any of this problem. Lastly, the businesses who sell services require a lot of focus and commitment to meet all of the many parameters set within the delivery of the services real time. Say for example, an airline ticketing service will require effective management of availability, meal preferences and even refunds.

The Nature of the Participants

There are three common participants in e-commerce. These are the businesses, the administration and then the consumers. In relation to that, the following are the six primary types of e-commerce:

  1. Business-to-Business (B2B) – in this type of e-commerce, the participants are both businesses. The volume and value of this type of e-commerce is huge. One example of this type of e-commerce is the manufacturer of mobile gadget components who source their products to the manufacturer of the mobile devices.
  2. Business-to-Consumer (B2C) – by far this is the most familiar type of e-commerce. This basically construes as ‘the’ e-commerce. The most basic example to this type of e-commerce is Amazon. This type of e-commerce removes the need of a physical store completely out of the picture and instead is replaced by a powerful online retail shopping store that can directly engage and sell to consumers.
  3. Consumer-to-Business (C2B) – at first glance this type of e-commerce looks nonsense. However, this is completely on the rise as more and more shopping sites allow for consumers to provide their needs where businesses can jump in and fight for the bid. This is more common to websites selling services where a consumer would post his or her travel requirements and then different travel businesses would go ahead and pitch their offers.
  4. Consumer-to-Consumer (C2C) – this type of e-commerce is also very familiar and popular. Like B2C, the Consumer-to-Consumer type of e-commerce brings consumers to other consumers who sell closely together. One very perfect example of this is eBay.com. This platform has enabled a lot of consumers online who sell goods to reach a wide and more engaging and interested consumer base.
  5. Business-to-Administration (B2A) – what administration means is public, or simple term, the administration of government entities. That said, this type of e-commerce allows for businesses to reach the wider and high potential administration or government markets. There are a lot of electronic services that the public or the government needs and the B2A model is huge advantage for businesses and administration alike.

Consumer-to-Administration (C2A) – like the B2A, the Consumer-to-Administration brings people who sells products or services closer to the administration or government markets.

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