What is B2C ecommerce?
B2C business-to-consumer ecommerce, also called retail ecommerce, is a business model that involves sales between online businesses and consumers. B2C ecommerce is one of four major ecommerce business models, the other three being B2B (business-to-business), C2B (consumer-to-business), and C2C (consumer-to-consumer).
A popular example of a B2C ecommerce platform is Amazon. Ecommerce sales happen almost entirely over the internet, apart from the shipping and delivery processes, so they give sellers and buyers the comfort and freedom to make transactions at any time and from any place. This increased ease of both buying and selling online, as compared to traditional sales, has made B2C ecommerce one of the fastest growing sectors in the global economy and it’s estimated to make around 6.3 trillion USD in global sales by 2024.
In this guide we will be walking you through the basics of B2C ecommerce, including its types, benefits, and how its warehouses and order fulfillment work.
What are the types of B2C ecommerce businesses?
There are five popular types of B2C ecommerce businesses:
Direct sellers are what most people think of when they they hear B2C ecommerce. These are the online retail stores that either sell products from their own brand or sell a variety of brands. For instance, Zara’s online store sells products that specifically come under Zara’s brand. Other stores like Walmart and Costco sell products from all sorts of brands, but they’re still direct sellers.
Online intermediaries are mediators who use their websites to bring businesses and potential customers together. Online intermediaries do not own any product, service, or brand, and their only job is to form a path between those who sell and those who buy. For example, Etsy allows individuals and small businesses to sell their artistic products and services on the Etsy website under their own individual brands. Customers can then visit the site and make purchases directly from the sellers.
Advertisement-based ecommerce sites also do not own any products or services. Instead, they sell advertisements for products and services that other businesses own. Over time, as these sites grow more popular, they start to be referred to as influential websites that promote other businesses. The Huffington Post and the Guardian are examples of this type of ecommerce model, where both sites post ads for products and services sold by other businesses.
In the community-based ecommerce model, businesses target online forums that are related to the products and services they sell, and market their products there. For example, Facebook hosts groups and communities related to specific interests, so businesses can find an appropriate one in which to pitch what they offer.
Fee-based ecommerce sites charge customers to use their websites, because their products or services can be directly accessed there. Examples include subscription-based entertainment service sites like Netflix, Amazon Prime, and Hulu, or sites that offer articles and stories, like Medium.
How can B2C ecommerce benefit you over a traditional store?
Reach more customers
With a traditional store, you can expect that most of your customers either live in your area or have some reason to visit it. While you might have customers who don’t visit in person, they probably won’t make up the majority of your business. So your primary audience is limited to people with access to your store.
The “ecommerce” part of B2C ecommerce can overcome this problem. By putting your business on the internet, you’re making your store available to everyone who’s online, regardless of where they live. This not only includes potential customers who live in your area, but also customers across the country and even global customers if you choose to expand internationally. With ecommerce, your primary audience becomes everyone who can access your online store and is looking for the products you sell.
Reduce your overhead costs
Every business incurs some form of overhead costs. With traditional B2C commerce, running the physical store alone can entail expensive overhead costs like rent, employee salaries, property taxes, maintenance, utility bills (like water, phones, and electricity), and insurance. But the business also has other overhead costs that aren’t related to the physical store, like inventory purchases and the warehouse space to store them. So the physical store adds even more overhead to the already expensive process of running a business.
By switching to ecommerce, you can significantly reduce your total overhead costs, since you will be able to run your store entirely online and won’t require a physical store.
Create detailed customer profiles
If you run a traditional store, you may have a few trusted or favorite customers who place regular orders with you. With these customers, you usually already know what they’re looking for. So you can help them shop for their usual items quickly, or you can convince them to try new products or services that they might be interested in, or you could even reserve highly desirable products just for them. While these are all good options to offer, you will probably only be able to do this with customers you actually know, which means that your other customers may not get the same personalized experience.
A B2C ecommerce store can change this for you, with the help of customer or consumer profiles. Customer profiles (or customer profiling) is when businesses use an online analytical tool to gather data about each customer’s individual shopping interests, shopping history, patterns, frequency, regions they buy from, age group, occupation, how they learned about your business, and any issues or complaints that they have had in the past. Using this information, you can put together a thorough profile for each customer, which can help you offer them all a more customized shopping experience. Additionally, the information that you collect from each customer can help you pick out common factors amongst all of your customers. This can further help you identify other potential customers who share these characteristics, and target them in places you know they will see, like online ads on social media.
B2C ecommerce is essentially an online version of traditional retail stores, where instead of walking into a store to make a purchase, the customer just has to go online. Processes like placing and accepting orders and payments take place over the internet, which can make things easier for you. Besides simplifying your sales, B2C ecommerce can also help your business in ways that a traditional store can’t—like making your store available to everyone who’s online regardless of where they live, saving physical overhead costs, and offering all of your buyers a customized shopping experience. Learning about all of these advantages can help you understand what running a B2C ecommerce business entails and determine whether your business can really benefit from it.