E-commerce is expanding in many fields like retail, consumer electronics and transportation, making it a hot market for new business. If you are thinking about entering the market for the first time, this article will help, telling you about the different types of business models and accounting tools you need to know.
For seasoned business owners who are thinking of diversifying their business into e-commerce, you are at the right place. You might be wondering what types of e-commerce business models fit best for your particular business.
1) Business to Business (B2B)
In the B2B e-commerce business model, you are selling to other businesses instead of consumers. You can sell to local businesses in your area or sell to suppliers or other companies you might buy from.
In the B2B model, you sell products or services that are not readily available in a certain region. If your customers are willing to buy products or services online, they are more likely to buy from you because they know you can deliver the products or services they want at the right time.
2) Business to Consumer (B2C)
A business selling to consumers is known as B2C. Consumer electronics and home appliances are good examples of this business model. You might be selling different products to different customers or selling the same product to multiple customers.
A key trait of the B2C model is that it’s easy to understand and easy to approach. Since the product is marketed directly to consumers, there is no need to find an intermediary or buyer.
3) Consumer to Business (C2B)
The C2B model does not include the usual amount of intermediaries or middlemen and is the opposite of B2B. In the C2B model, the business or company is the one who is buying or using the products or services. Consumers can also use the e-commerce platform to directly communicate with and negotiate prices with the businesses they are buying from.
A C2B model is commonly used by small and medium-sized businesses that want to gain access to the advantages of e-commerce, but don’t have the resources of a large business.
In this model, the business on the other end of the transaction is not a consumer. The practice is commonly seen in industries such as heavy equipment manufacturing and mining.
4) Consumer to Consumer (C2C)
The C2C model is common in marketplaces and apps. In this business model, the product is sold directly to the consumer without going through any intermediaries. EBay and Amazon are good examples of C2C models.
Comparing these e-commerce business models with other business models you might already know about, you will notice that it is similar to the “direct marketing” or “bulk marketing” model, in which the company sells directly to the consumer like the C2C model.
Finding the Right Kind of Business Model for You
Depending on your market and your business model, you can choose the right e-commerce business model for your business. The important thing for you to do is to check if the model you want to do fits your business and your customers.
Conclusion
Accounting in e-commerce is a rapidly changing field, and having a good accountant will help you make sure you can take advantage of all the tax-saving opportunities and the different kinds of e-commerce business models.
If you have any questions about the different kinds of e-commerce business models, or if you want help in setting up your e-commerce business, the ECommerce Accountant can help. We offer accountant services online for quicker and faster consultations. Get in touch with us today to learn more.
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