What are the 3 types of e-commerce – One of the first things you will learn when entering the world of internet sales is that there are different types of electronic commerce. Each of them opens up various possibilities for commercial exchanges between large and small businesses, individuals and even governments.
In this article, we will review the types of businesses that exist in online sales, from the most common to some that you may never have heard of. We will also present examples of each one to understand them a little better.
All ready? Let us begin!
What is electronic commerce?
Electronic commerce or e-commerce (a word that comes from electronic commerce). Refers to commercial transactions carried out entirely online. The entire process must be carried out digitally, from the choice of the product by the customer to the completion of the order.
In this type of trade, the only stage in the physical world is the logistics of delivering orders to buyers.
In addition to purchasing processes, electronic commerce is mainly based on the dissemination and promotion of products or services —since both can be sold online— through digital marketing. Therefore, this part of client attraction is usually done through the Internet.
How many types of commerce are there on the Internet?
Although indeed, they are usually recognized in four significant types of commerce: B2B, B2C, C2B and C2C (we will review them one by one later), technological advances have helped internet sales to reach more and more industries. . This expansion has resulted in the emergence of new types of e-commerce.
Next, we will explore each of the seven types of e-commerce, and incidentally, we will review some examples and online business opportunities in each case. 🛒
7 types of e-commerce and examples
1. B2B e-commerce
By its acronym in English, Business to Business (business to business) refers to a commercial transaction between companies with a presence and operations on the Internet. Final consumers are not involved in this type of business.
To participate in this type of electronic commerce, it is advisable to have previous experience in commercial relations with other brands. It is also suggested to have sufficiently robust logistics to satisfy the clients’ needs, that is, the other companies.
Another critical point is to ensure you have your tax situation in order, so you will avoid problems operating, issuing invoices and declaring taxes.
Some of the most common examples in B2B e-commerce are:
- A company that makes wholesale purchases from another company.
- Platforms to create and manage online stores, such as Tiendanube.
- A virtual store that acts as an intermediary between a provider and end customers. This business model is known as drop shipping.
Tiendanube Fracking Design, for example, is a sustainable B2B company that produces corporate products such as bags, wallets, etc. It should be noted that it also sells to the final Consumer (B2C) since the e-commerce platform allows both options.
2. B2C e-commerce
Business to Consumer e-commerce fosters business relationships between firms of any size and consumers. Online stores and marketplaces fall into this category.
This type of trade is oriented to satisfy the end customer’s needs, so customer service must be a priority for the companies that are part of this classification.
In B2C businesses, we find intermediaries that facilitate commercial exchange between company and client, some examples of this type of e-commerce are:
- Marketplace such as Mercado Libre, Amazon or Linio.
- The virtual store of a company that sells retail, such as Walmart.
- Companies like Spotify or Netflix offer a service to their customers.
An example of a Tiendanube in B2C e-commerce is Fera, a stationery and publishing brand that offers products with the original design
3. C2B e-commerce
Consumer to Business electronic commerce refers to those transactions in which consumers or professionals working independently offer their services or products to companies.
This type of e-commerce has become increasingly common, thanks to digital media such as blogs, social networks, videos, and podcasts.
Next, we will know some examples of this type of electronic commerce.
- A professional or amateur photographer sells his photos to an image bank such as Shutterstock.
- A person who participates in market research paid for by brands.
- An influencer receives a commission for each person who visits a link posted on one of his social networks.
4. C2C e-commerce
The last one that we could consider among the most traditional or well-known types of e-commerce is Consumer to Consumer electronic commerce (Consumer to Consumer).
As its name says, C2C commerce occurs when the exchange is carried out between consumers, and no type of company is involved. It is a more informal transaction and, regularly, at lower prices than other types of commerce.
In this category, it is widespread (although not exclusive) to find used product sales.
- A person who advertises his car on the Facebook Marketplace or used product sales platforms.
- Sites like Etsy or eBay, where anyone can register and sell their products.
- Airbnb is also an example of C2C e-commerce, as it facilitates individual transactions.
5. G2C e-commerce
Government to Consumer (government to Consumer) is the classification of electronic commerce in which digital monetary transactions are carried out between governments or administrations and consumers through official portals.
As regards the advantage of this type of commerce —in addition to security and speed in carrying out procedures— the Consumer has access to the payment platforms anytime and anywhere.
At first glance, it may seem challenging to find examples of G2C e-commerce, but the reality is that almost everyone has used them at some point.
I know some below:
- Digital procedures with cost, for example, the payment of the driver’s license.
- Payment of vehicle fines.
- A business that pays its taxes through the AFIP portal.
6. B2G or B2A e-commerce
The Business to Government category, also known as Business to Administration (B2A), is one in which a government entity purchases digital goods or services from companies through electronic commerce.
Examples of B2G or B2A
This type of e-commerce is much more common than you can imagine; here are some examples:
- A design agency developing an identity for a government campaign.
- When the government hires a company to create a web page.
- The sale of urban furniture for the improvement of a public area.
7. B2E e-commerce
Finally, Business to Employee e-commerce refers to the purchases that companies make for their workers.
This is a fairly common strategy in work, especially in competitive markets with a lot of staff turnover.
- When a company pays for a software license so that its employees can use it.
- The prepaid medicine payment that a company makes for its employees.
- The purchase of equipment that a company makes so that its employees can work remotely.
Now that you know a little more about each type of electronic commerce that exists, you can compare them and choose the one that most appeals to you to start planning your business.
And while the ideas begin to arrive, here we tell you what almost nobody tells you (and you definitely should know) about making sales online, from how to collect and make shipments to the legal aspects that you should take into account if your business is in Argentina.