E-Commerce Models: Advantages or Desadvantages 2022

What are e-commerce models? 5-10 years ago, we were hesitant to shop online. Traditional markets have always been thought of as much better for the consumer. With the developing technology and the effects of the pandemic period, everyone started to shop online, albeit slowly.

E-commerce is one of the blessings that the widespread use of the internet has given us. Both those who already have a physical store or those who want to establish a new business establish or transform their business as e-commerce.

In e-commerce, any product or service can be sold. Physical books, e-books, clothes, jewellery, electronic goods, furniture and many other categories can be easily traded thanks to online sales.

The most important factor in e-commerce is to produce in accordance with the target audience and to reach the target audience. For this, what you need to do is to realize your sales by adopting the e-commerce model that suits you.

E-commerce Models

E-commerce models consist of eight different models in total, of which four are basic. These models are as follows;

• B2B – Business to Business
• B2C – Business to Consumer
• C2B – Consumer to Business
• C2C – Consumer to Consumer
• B2G – Business to Government
• G2B – Government to Business
• G2C – Government to Consumer
• G2G – Government to Government

In this article, we will talk about these e-commerce models for you. You can find the detailed description of the models below.

B2B – Business to Business

In the business-to-business business model, it is a business model between the manufacturer companies or between the manufacturer and the seller company. Firms that adopt this trade model act as producers in the trade chain.

Advantages:

• Business stability can be achieved.
• The future of the business and the market is predictable.
• Once the system is installed, the costs are much lower.
• High volume sales can be realized at once.
• Although lower profits are obtained over the unit price, the profit in total sales is higher.

Disadvantages:

• Large amounts are spent when establishing a business.
• Due to wholesale sales, the unit price is kept lower than retail sales.
• You have certain customers.
• It is more difficult to reach customers and win over them.
• In bulk sales, the supplier’s profit rate is lower than the seller’s profit rate.

B2C – Business to Consumer

In the business-to-consumer commerce model, products are sold directly to the consumer. The products sold by companies that adopt this trade model can be purchased from the supplier group in the B2B model or can be produced by the seller.

Advantages:

• Initial capital is low.
• It has a wide range of products and services.
• It can be sold to audiences of all ages.
• It is easier to reach the target audience.
• It can be easily shaped according to the market.

Disadvantages:

• Competition is high.
• Financial risks may arise in the manufacture of the products sold.
• It is a constantly evolving market. For this reason, businesses also need to constantly update themselves.

C2B – Consumer to Business

In the consumer-to-business commerce model, the consumer offers a product or service model to a business where he is not an employee. In a way, the business undertakes the role of sponsor here. The consumer has an idea and needs infrastructure. Once the necessary reassurances are provided, the business is likely to be successful. The business does a joint business by providing assurance to the consumer.

For example; Anyone who takes photos of anything can sell them as stock photos. Freelancing is the easiest example of this trading model. A freelance designer presents the image he has made to a business where he is not an employee, and thus the trade takes place.

Advantages:

• By doing business with people working as freelancers, the workload can be reduced.
• National and international working style can be adopted.
• More than one product and service may be offered.
• Employees can be provided to work during their most productive hours.

Disadvantages:

• Communication breakdowns may occur.
• People with low self-confidence and communication may have the problem of not being able to find a job.
• Due to the way of working remotely, the deserved payment may not be received.

C2C – Consumer to Consumer

In the consumer-to-consumer trade model, trade is made between two consumers. A consumer sells his goods as second-hand and offers them to another consumer. The C2C business model is a business model in which second-hand products are sold.

Advantages:

• With second-hand sales, you can earn income from products you do not use.
• You can make a profit by selling the products at a higher price than you bought them.

Disadvantages:

• The sites where sales are made are also paid in the form of commissions.

B2G – Business to Government

In the business-to-government trade model, the products or services marketed by the enterprises to the government are sold. As the shortest example, a construction company is needed even for the erection of a government building. The production of various visuals, advertising posters and videos in agreement with the agencies during election times is also an example of commerce in this context.

G2B – Government to Business

In the state-to-business model, the state is on the seller side. Various loans, incentives, auctions and tenders offered by the government to businesses online are in this group.

G2C – Government to Consumer

It covers the sales made by the state to its citizens in the state-to-citizen business model. The fact that PTT, which is an official institution in Turkey, sells directly to citizens as “pttavm” is the best example that explains this model.

G2G – Government to Government

The state-to-government business model includes online sales between states. In this trade model, one state provides products to another state. In this case, a trade flow takes place.