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Types of E-commerce Models
An business model refers to the method of doing business through which a company is capable of generating revenue. E-commerce is a type of business model that enables the firm to conduct business over the internet. There are several types of E-commerce models and they are mainly classifies based on the nature of market relationship and the technology used.
In Law of e-commerce, these models are classified on 2 basis- market relationship and based on the technology used. Classification based on market relationship includes Business to Consumer (BSB), Business to Business (B2B), Consumer to Consumer (C2C) and Consumer to Business (C2B). these four models form the form the 4 fundamental models while Business to Government, Government to Citizens and Government to Business are derivates of the above four. Based on the technology used, E-commerce can also be classified into Peer to Peer (P2P) and Mobile Commerce (M-Commerce).
Based on market relationship:
- Business to Consumer (B2C)
This is the earliest type of model which includes the traditionally way of transaction between a business and its consumers. It is the second biggest model and is also known as the B2B model. This model started to expand after 1995 and has now become the most common E-commerce. It includes all sorts of tangible products, such as cutlery as well as intangible products such as software and audio books. The basic concept is to sell products through a website, while the website serves the purpose of a shop. Some examples of this model are Snapdeal and Amazon.
- Business to Business (B2B)
Known as the B2B model, it is the largest e-commerce model based on revenue which involves trillions of USD. In this, both the buyers and the sellers of are business entities as the name suggests. This model includes commercial transactions between businesses, such as that between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Some examples are Oracle and Kickstarter.
- Customer to Customer (C2C)
Also known as the C2C model, these markets provide an innovative way to allow customers to interact with each other. The business facilitates an environment where customers can sell goods/services to each other. Examples of this includes Ebay, OLX and Quikr India.
- Customer to Business (C2B)
Also known as the reverse auction model, in this scenario, individual customers create a certain value which is consumed by a business. For example, positive feedback and criticism, reviewing a book or a movie or a useful idea for a new product given by the customer to the business to improve upon. Freelancing sites such as Fiverr, Freelancer and Shutterstock are examples for this type of model.
Based on the technology used:
- Peer to Peer (P2P)
Peers are computer systems which are connected to each other via the internet. Files can be shared directly between systems on the network without a central service. Peers make a portion of their resources such as processing power, disk storage or network bandwidth, directly available to other network participants, without the requirement of a central coordination by services/stable hosts. Peers are both consumers and suppliers of resources.
A distributed network architecture may be called a P2P network, if the participants share a part of their own hardware resources. These shared resources are necessary to provide the service and content offered by the network (like file sharing/workspaces for collaboration). They are accessible by other peers.
- Mobile Commerce (M-Commerce)
This model uses mobile devices such as mobile phone, smart phones and other emerging mobile equipment to carry out online transactions.
