Did you know that there are seven different types of ecommerce? Yes! And, each one means something different to every small and medium business (SMB) owner.
Whether you’re trying to find the right ecommerce type for you, or your expanding your ecommerce business, you’ll discover most transactions fall into one of these seven types. Depending on what your business sells and how your products are marketed, you can find the right type of ecommerce that will be the best fit for you. We’ll cover the seven different types of commerce for small business, along with benefits and trends for each.
Seven types of ecommerce for growing businesses
There are seven common types of ecommerce interactions. They describe the directional sale of goods or services among businesses (B), consumers (C), and government agencies (G).
The most common types of ecommerce business are business-to-consumer (B2C) and business-to-business (B2B). While these are often positioned as opposites — B2B vs. B2C — they share a similar focus on customer satisfaction and generating loyalty over time. They simply speak to different audiences.
B2C transactions make up hundreds of thousands of online marketplaces that sell a wealth of consumer goods that can often be delivered in days or even hours. B2B transactions, on the other hand, are simply a digital form of business interactions that have been going on for decades.
1. Business-to-consumer (B2C)
Business-to-consumer (B2C) ecommerce businesses sell goods and services online directly to consumers. Products may be produced and sold by the business or purchased from other suppliers and resold to consumers.
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Online marketplaces are the most familiar example of B2C operations. These businesses offer a variety of products from different brands that can be purchased and shipped directly to customers. Some B2C businesses offer free shipping over a certain dollar value, and others offer memberships that include faster delivery options. In this model, both the B2C seller and the business that manufactured the product each receive a portion of the sales price.
Ecommerce storefronts may also be maintained by first-party retailers. For example, a clothing line might choose to build an ecommerce website that only sells its brand of apparel.
Tips for B2C success
B2C success depends on capturing consumer interest, driving sales conversion, and keeping customers coming back.
To capture interest, companies need to connect with consumers on the platforms of their choice. For example, B2C brands might promote their products on social media platforms.
Sales conversion requires a combination of price and positioning. Products should be priced competitively, and ecommerce platforms should showcase products in an easily accessible format. Product quality and performance can keep customers coming back. According to the Salesforce Connected Shopper Report, 74% of shoppers say it takes no more than three bad experiences for them to abandon a brand.
B2C might be right for you if…
- You manufacture products intended for consumers
- You prefer the reliability of large-scale online marketplaces
2. Business-to-business (B2B)
Business-to-business (B2B) ecommerce transactions occur between one business and another. Businesses may sell products, services, or information to other businesses. Salesforce is an example of a B2B company, selling cloud-based solutions and platforms to businesses to help them improve marketing, sales, and service.
Right now among B2B businesses, 42% of their revenue comes from ecommerce channels, according to our research. And, it’s expected to reach 54% in the years to come.
Tips for B2B success
The B2B buying process is different than the process for consumers. In a B2C scenario, a customer who sees a product they like may simply make a purchase. When it comes to B2B, however, purchases are typically vetted by team leaders or C-suite members.
This means the sales cycle may take longer as multiple levels of approval may be required.
B2B might be right for you if…
- You sell a platform, product, or service primarily used by other businesses
- Your sales model depends on as-a-service solutions that are designed for long-term use
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3. Consumer-to-consumer (C2C)
Consumer-to-consumer (C2C) and consumer-to-business (C2B) are both models that represent an inversion of the types mentioned above. Instead of businesses providing products for consumers or other companies, consumers initiate the transactions.
C2C and C2B ecommerce are only possible thanks to the development of accessible ecommerce platforms. These allow consumers to create their own websites and take payments directly or partner with online marketplaces that improve their digital reach.
C2C platforms facilitate the movement of goods from one consumer to another. C2C ecommerce often takes the form of bespoke goods sold on third-party platforms. Items may be handmade or limited in quantity, and buyers can typically contact sellers directly for more information.
Some C2C platforms use a mobile application model to sell goods. For example, a variety of resale apps allow users to sell vintage clothing and other items directly to buyers right from their tablets or devices.
Tips for C2C success
Quality is big for C2C transactions. Unlike B2C purchases, where buyers expect products that meet industry-defined standards for quality and performance, C2C goods are often bought because they are one-of-a-kind or have been crafted by hand.
While the person-to-person nature of C2C transactions changes the social dynamic, buyers still have familiar expectations of service. For example, 65% of customers said they expect someone to respond immediately when they reach out with questions or concerns, according to the Salesforce State of the Connected Customer report.
C2C might be right for you if…
- You’re an independent business owner who produces goods locally
- You prefer to sell to other consumers directly rather than using large-scale online marketplaces
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4. Consumer-to-business (C2B)
In a consumer-to-business (C2B) model, consumers sell goods or services directly to businesses. C2B models aren’t new, but they’ve evolved significantly over the past few years.
Consider a print newspaper that purchases and publishes a photograph from a reader. This is a C2B transaction — the consumer (reader) sells their product (photo) to the business (newspaper), which then prints the image.
The rise of digital assets and social media sites has changed how these transactions occur. For example, a user might sell a digital image to a stock photography site. Or a social media influencer may sell their social impact to a business to promote products or services.
Tips for C2B success
With a C2B model, building influence is key, usually with social media by acquiring followers and creating content that’s reshared. If enough people watch and engage with this content, brands may take notice and seek out partnerships.
Find a market need and sell products that directly meet this need, such as digital images or custom copywriting content.
C2B might be right for you if…
- Your business model is predominately driven by social media
- You have the skills to produce content types that digital businesses need
5. Direct-to-consumer (D2C)
Direct-to-consumer (D2C) ecommerce removes the middleman — and the associated cost markups — by selling products directly to customers.
Historically, producers have relied on retailers to serve customers (B2C) or wholesalers to supply businesses (B2B). This arrangement worked because retailers and wholesalers had physical spaces for inventory storage and in-person purchases and took on the task of marketing to target audiences.
The rise of ecommerce means that manufacturers can now connect with consumers directly. Products can be advertised, evaluated, and sold entirely online, removing the need for additional sales steps.
D2C sales are on track to reach $200 billion in 2024, with 64% of consumers buying directly from manufacturers.
Tips for D2C success
D2C success starts with personalization. More than 60% of customers expect companies to adapt to their changing needs and preferences. For D2C businesses to capture market share, they must be willing to build reciprocal relationships with customers that prioritize what buyers want and create marketing and sales campaigns to match.
Direct-to-consumer models also offer the potential for rapid product iteration. Where retailers or wholesales typically prefer tried-and-tested products with reliable sales history, a D2C approach lets companies test out new features and functions and develop best-fit products based on direct customer feedback.
D2C might be right for you if…
- Have brand and product recognition among consumers or businesses
- Currently own or can invest in the logistics infrastructure necessary to ship directly to buyers
- Are capable of connecting with customers across multiple purchasing channels to deliver omnichannel support
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6. Government-to-business (G2B)
Government-to-business (G2B) interactions happen when local, state, or federal governments provide ecommerce services to businesses. One example of a G2B in action is the provision of an online portal for private companies to pay their municipal or state taxes. The government creates and maintains the portal, and either provides the service for free or for a small cost to businesses.
Benefits of these portals include reduced processing time and digital notifications if businesses make a filing error or if more information is required.
Tips for G2B success
Success in government-to-business (G2B) operations is distinct from other ecommerce types because it focuses on providing essential services rather than generating profit. G2B services, which aim to recover costs rather than generate significant revenue, depend heavily on their functionality.
For instance, state governments may offer online services for business license renewals or applications, which need to be user-friendly. If these services are complex, local businesses might continue using traditional paper forms. However, if the process is simplified and efficient, it encourages businesses to adopt G2B transactions, enhancing overall operational effectiveness.
G2B might be right for you if…
- Are a government agency
- Are a business authorized to provide government services to businesses
7. Business-to-government (B2G)
Business-to-government (B2G) frameworks see businesses providing goods or services to government agencies and organizations. B2G contracts are commonplace across industries such as construction or manufacturing. For example, a road work company might bid on a government contract to build an overpass or highway.
In the ecommerce space, meanwhile, business offerings may take the form of software development, cybersecurity services, or website design.
Tips for B2G success
B2G sales differ significantly from other ecommerce categories due to the use of a request for proposal (RFP) process, where businesses submit bids to government agencies, detailing their offerings in terms of price, quality, and performance. This competitive setup allows agencies to select the proposal that best meets their criteria, presenting both opportunities and challenges for businesses.
Opportunities in B2G sales include potentially higher transaction values and longer contract durations than those typically seen in the private sector. However, challenges are also notable, including lengthy sales cycles driven by extensive regulatory and approval processes, and stringent compliance demands, such as the Cyber Maturity Model Certification (CMMC) standards required for businesses working with the Department of Defense.
B2G might be right for you if…
- You offer a product or service that governments need
- Are compliant with regulations such as CMMC, HIPAA, and the CCPA
- You can afford longer sales cycles
Sub-types of ecommerce
Additionally, there are more ecommerce types that fall under these umbrella categories. Each of these models serves different needs and target audiences, and some businesses may operate using a combination of these ecommerce types.
Mobile Commerce (Mcommerce)
Mcommerce specifically involves buying and selling via mobile devices, such as smartphones and tablets. Selling mobile applications is big for this type of ecommerce. A great example of this is Insight Timer or Uber Eats.
Social Commerce
Social commerce integrates ecommerce directly into social media platforms, allowing users to buy products without leaving the platform. Some prime examples are Instagram Shopping, Facebook Marketplace, and Pinterest Buyable Pins.
Subscription-based Commerce
Subscription-based commerce businesses offer products or services through a subscription model, where consumers pay a recurring fee to receive goods or services monthly or yearly. This is popular, some examples of this are Netflix, Dollar Shave Club, and Blue Apron.
Ecommerce and your growing business
To make the most of ecommerce opportunities, businesses should focus on what matters most: keeping customers happy while driving revenue. This means leveraging AI-powered technologies capable of managing sales, service, commerce, and marketing simultaneously. Now with Small Business Commerce you can open up your digital storefront for any type of ecommerce that your business needs to grow.
