E-Commerce Business Models

E-Commerce Business Models

Introduction

The era of electronic commerce has existed since 1995. The computer revolution in the business world has since changed immensely with the introduction of Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C) and m-commerce models. Majority of the business firms have adopted e-commerce in harnessing growth and development (Loudon & Traver, 2013). The current technology development has become an integral factor in improving business and market competitiveness.

However, e-commerce exists in different models such as the B2B, B2C, C2C and m-commerce. B2B business model involves transactions between businesses. For instance, a supplier is involved in a B2B when supplying to other individual businesses. Importantly, B2B is supported by Electronic Data Interchange (ED) technology. B2C business model involves firms selling directly to individual consumers. For example, retailers dealing with end consumers are an example of B2C business model.

Other business examples include travel services offered in the tourism industry. Online retailers, transaction brokers and market creators are exemplary models of B2C business. C2C is a business model that allows consumers sell to each other without involving retailers or wholesalers. C2C allows the consumer to place an item for sale on an online market without charges. Amazon and eBay are examples of online markets that facilitate C2C business model. M-commerce is the latest business model that utilizes mobile devices in conducting transactions.

M-commerce is a wireless mode of business where the use of laptops and smart phones connect to the web for transactions such as banking, stock trading and travel reservations. M-commerce is expected to outgrow other models of business in the future. The following research highlights examples of B2C, B2B, C2C and m-commerce business models. In addition, the research focuses on companies, products and services that do not subscribe to e-commerce, and how they can apply the same in conducting business.

B2C E-Commerce Business Models

Online retail stores are components of B2C models and are similar to bricks-and mortar businesses. Typically, online retail stores have physical subsidiaries and virtual stores. Barnes & Noble, Walmart and Staples are examples of companies that operate virtual and physical stores. However, there are companies that only operate in a virtual world. For example, Amazon, iTunes, Drugsore.com and eBay are typical e-tailers that use online mall and catalogs (Loudon & Traver, 2013).

Community providers like Facebook, LinkedIn, Well.com, iVillage, Fool.com and Twitter are renowned for their social connection services. Community providers provide an online platform for business to share information on products and services they intend to sell. Sharing of video, pictures and information regarding products and services is a common characteristic of community providers. Another example of B2C model is content providers that trade on information.

In any case, content providers deal in intellectual property, distribution of information, video, music and text using the web as a marketplace. Trading of e-books, online journals and magazines, are also a within the scope of content providers. Renowned content providers include WSJ.com, CNN.com and CBSSports.com. B2C business model incorporates the use of portals or search engines like Google, Yahoo, Ask.com and MSN in providing content and services (Loudon & Traver, 2013).

In most cases, consumers use portals as a gateway to search for their favorite products and services. Other prominent examples of business models associated with B2C model include service providers like Google Docs and Gmail, as well as transaction brokers like Ameritrade and Datek.

B2B E-Commerce Business Models

Business-to-Business (B2B) models are more prevalent than B2C commerce. As indicated earlier, B2B utilizes EDI technology to ensure transactions between suppliers and purchaser remain private and confidential (Loudon & Traver, 2013). Examples of models that suit B2B business include the e-distributor, where companies utilize online catalogues to display their items. Grainger.com is a renowned e-distributor with online catalogs used to access and provide information of over 1 million items.

E-procurement firms like Ariba use customized software and integrated online catalogs that organize procurement procedures for vendors. The customized software and integrated online catalogs integrate additional information on services such as shipping, insurance and finance. In this context, e-procurement software is an integral element of value chain management. E-procurement software service providers earn money by charging tra