Breaking down business models

What are business models?

As defined by Wienclaw (2008), a business model is “the paradigm under which an organization operates and does business in order to accomplish its goals. Business models include consideration of what the business offers of value to the marketplace, building and maintaining customer relationships, an infrastructure that allows the organization to produce its offering, and the income, cash flow, and cost structure of the organization.”

The two models I have chosen to analyse and share are Consumer-to-Consumer (C2C) and Business-to-Consumer (B2C), as both are prominent in today’s digital age.

The consumer-to-consumer (C2C) business model essentially facilitates transactions of goods and services between buyers and sellers. C2C selling can include the advertising of products and services in a newspaper, an auction or on the Internet via websites such as EBay, Facebook, Gumtree and Amazon, to name a few. As a result of digitisation, the nature and the content of C2C e-commerce is constantly changing (Yrjola, Rintamaki, Saarijarvi, Joensuu, 2017).

Since 1995, EBay has been successful in allowing individuals to sign up and begin selling any item of their choice, as well as locating other sellers to purchase from. In turn, it provides access to everyone of a vast choice of goods, as well as offering a channel in which people can sell goods (Yrjola et al., 2017).

The digital age has allowed convenience and wide access to a range of products, which have all been categorized into clothes, electronice, furniture and home supplies and many more. This means that consumers can now compare pricing and find the best quality product in an efficient, timely manner.

Secondly, I will analyse the business model known as Business-to-Consumer (B2C), as it is among the most well known for sales models. The B2C model entails a business or transaction conducted between a company and consumers, in either products or services (http://www.investopedia.com/terms).

Traditionally, B2C can be known as retail stores selling products directly to customers, eating out at restaurants and receiving a direct service and so on. However, similarly to the C2C model, many businesses also carry an online store (e-commerce) available to consumers to purchase a product or service.

B2C has allowed companies to expand their businesses to people all over the world, creating more revenue and building a reputation. When we compare the C2C and B2C models, it can be seen that there are advantages and disadvantages to both. Well known brands such as Nike, Adidas, Puma and Asics have already built a solid reputation throughout the world, and therefore consumers may prefer to buy directly from their websites rather than buy second hand from other consumers. On the other hand, those wanting to save money and utilize their time in seeking quality second hand items can also do so on websites such as Facebook and Gumtree.

References

Yrjölä, M., Rintamäki, T., Saarijärvi, H. & Joensuu, J. (2017). Consumer-to-consumer e-commerce: outcomes and implications, The International Review of Retail, Distribution and Consumer Research, 27(3), 300-315. DOI: 10.1080/09593969.2017.1314864

Wienclaw, R. (2008). B2B Business Models. Research Starters: Academic Topic Overviews, 1-6.

#businessmodels #business #marketing #services #products #C2C #B2C #ecommerce