Business models are the structure ‘in which a company generates revenue and makes a profit from company operations’ (Investopedia.com, n.d.). Business models are broken down into what operations sell to what operations whether it be businesses, consumers, and or the government. Examples of business models include Consumer to Consumer (C2C) and Business to Consumers (B2C) of which will be listed in detail below for further explanation.

A C2C business model, is the model of which consumers and other consumers will simultaneously be the buyers and the sellers in exchanging products between each other. Consumer A will put up a product that they would like to sell, and Consumer B will show interest and exchange money for the product Consumer A is selling. In the areas of internet marketing, websites are used to act as the host or the medium in the exchanges, specifically sites like carsales.com.au and gumtree, allow consumers to locate the product that they would like to purchase. The product belongs to other users of the website, and not the website itself. C2C businesses can use advertisements as a form of revenue stream or take commissions through having a product hosted through the site (e.g. Steam’s item Marketplace). Providing premium user account status, is another way for C2C consumers to make money through their website.

A B2C business model is the most common business model you will encounter online. A B2C business model is the operation of e-commerce and internet business that denotes a transaction between the business and the consumer (Techopedia.com, n.d.). The B2C model is likely your most common form of interaction with e-commerce, as you purchase clothing items, entertainment, groceries, etc. online. The B2C model is most common in online retailers, either as an online only store (Kogan) or as the online version of a physical store (JB Hi-Fi, and JB Hi-Fi online). Other forms of B2C can come the manufacturers of the products themselves, allowing them to cut out the middleman and go straight to the consumer.

2 examples of C2C and B2C business models are eBay and Amazon respectively. These two companies deal all their business online and have no physical operations to work in at all. eBay acts as the host medium for consumers to engage in the entire purchasing process. An eBay user will look to sell an item they have and would use eBay to host the product as the auction bay and to advertise other users on eBay to scope out the product for a potential buyer. Another user on eBay will hopefully find the product and then place a bid in order to hopefully secure the product. For Amazon on the other hand, it acts like any physical retailer where the products are all displayed for the customer to buy. Amazon also differentiates itself from physical retailers by having different levels of quality for the products available, providing cheaper options for consumers and the ability to turnover items of stock that they would have difficulty selling, if at all.

References

Investopedia.com. (n.d.). Business Model. [online] Available at: http://www.investopedia.com/terms/b/businessmodel.asp [Accessed 27 Aug. 2017].

Sundheim, K. (n.d.). What Is B2B And Why Choose This Business Model For Your Startup?. [online] Entrepreneurs-Journey.com. Available at: https://www.entrepreneurs-journey.com/8127/what-is-b2b/ [Accessed 27 Aug. 2017].

Techopedia.com. (n.d.). What is Business-to-Consumer (B2C)? – Definition from Techopedia. [online] Available at: https://www.techopedia.com/definition/1424/business-to-consumer-b2c [Accessed 27 Aug. 2017].