What is the B2C model of e-commerce?


Quick Answer

The business to consumer model or B2C model of e-commerce is based on individuals who purchase goods directly from a company through websites which feature online catalogs, explains About.com. The wholesale purchaser is eliminated from these type of transactions. B2C is effective for smaller companies.

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What is the B2C model of e-commerce?
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Full Answer

According to the Houston Chronicle, the B2C model enables companies to make a higher profit, as the wholesale purchaser is eliminated. The B2C model is characterized by a lower purchase volume for higher priced goods. Examples include airline tickets and electronics. B2C companies are classified into five major categories, according to the Houston Chronicle: direct sellers, online intermediaries, advertising-based models, community-based models and fee-based models.

Direct sellers market their products or services directly to consumers through their websites. Online intermediaries are like brokers, as they alter the price setting processes by creating large profit margins.

Advertising-based sellers offer a free service or product to consumers and cover the costs through advertising revenue from other companies. Companies that advertise on popular sites pay those sites for a significant number of hits. Community-based models focus on specialized groups. This is accomplished primarily through social media and online networking. Online ads are generated according to the consumers interests, or their specific location. Fee-based models are paid subscription services, such as Netflix, where you can watch movies and shows for a monthly fee.

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