A guide to B2C ecommerce
It can be tricky to fully understand business-to-consumer (B2C) ecommerce, including the various types, their benefits, and how they differ from business-to-business (B2B) ecommerce. But it’s important to know, especially for marketers and ecommerce business owners, so they can strategize effectively.
Our guide defines B2C ecommerce, outlines the different types, and explains how it differs from B2B ecommerce.
Specifically, we’ll cover the following:
What is B2C?
In B2C, ecommerce businesses sell their products and services directly to consumers. There are five main types of ecommerce — direct sellers, intermediaries, advertising-based, community-based, and fee-based.
Types of B2C ecommerce
There are five main types of B2C ecommerce that describe different individual business models. However, some businesses choose to combine some approaches.
- Direct sellers. This is the most common type of B2C ecommerce model — in it, consumers buy goods directly from retailers. Manufacturers and their online stores fall in the direct sellers category. Examples of this would be Walmart or Target, where customers buy products directly from the online store.
- Intermediaries. These sellers operate between businesses and potential customers. Intermediary companies don’t own the products or services on their websites but serve as a platform to connect buyers and sellers. Examples of this include travel sites like Expedia and marketplaces like Etsy.
- Advertising-based. In this model, companies use free content to bring visitors to a website that displays ads. Examples of this are media outlets like The Guardian and HuffPost, which publish ads for products and services from other companies.
- Community-based. This type of ecommerce model helps marketers and advertisers promote products in online communities related to their products. Ads are put on user feeds based on demographics and location. Facebook groups are an example of this — people join groups based on specific interests, and businesses can use this as an opportunity to find their target audience.
- Fee-based. These ecommerce companies charge a fee to access their products and services. The website may offer free content, but it will be limited and payment is required to use most of the features. Some examples of this are Netflix and The New York Times.
While B2C ecommerce offers a variety of approaches for companies to reach their customer base, some businesses require an entirely different model.
B2C vs. B2B
While B2C and B2B business models have some similarities, there are several key differences between them:
- B2C customers buy products for personal use. The product is purchased by an individual and used mainly by that individual.
- B2C usually tries to elicit an emotional response. B2C brands advertise to appeal to the customer’s aspirations, needs, and fears.
- B2C customers usually pay the same price. When buyers go to a company’s website, the price will be the same for all visitors unless they have a coupon or discount code.
- B2C is usually a one-step process. Buyers visit an ecommerce website and choose the item they want, typically during the same visit.
- More money is spent on B2C marketing per sale. B2C companies need to reach their audience segments through different mediums, so more money typically is invested in marketing than in a B2B company.
- B2B businesses buy products for their companies. A product is purchased to be used by a business rather than an individual.
- B2B campaigns usually demonstrate the value of the product or service. Because companies are likely comparing similar businesses, B2B campaigns have to show what makes their product better than similar items on the market.
- B2B price structures can vary. Prices are adjusted to secure a sale and make the customer feel like they got the best deal possible for the type of product or service they received.
- The B2B sales cycle is longer and more complex. More approvals are required by companies to make the decision to purchase a product, meaning the cycle can last weeks or even months.
- B2B marketing is a smaller expense per sale. B2B is marketed toward business leaders, who are more difficult to grab the attention of, so the marketing focuses on fewer mediums to sell through.
Both B2B and B2C models require excellent customer service to build a loyal customer base. While both have their unique benefits, B2C has a greater potential to reach a wider audience, among other advantages.
Benefits of B2C ecommerce
No matter which type of B2C model you choose, there are a variety of benefits.
- Global reach. One of the greatest benefits of B2C ecommerce is that everyone has access to your product, no matter where they are. Whether you’re a large corporation or a small business, B2C ecommerce gives any company the opportunity to grow.
- Lower cost. B2C ecommerce cuts down on overhead and operating costs because there’s no need for a physical storefront. Property taxes, rent, utility bills, maintenance, insurance, and other costs are reduced by selling to customers directly online.
- Personalization. It can be easier to market to niche audiences and personalize marketing for individual consumers using advanced tools and metrics like shopping cart abandonment rates. Online ecommerce makes segmenting customers a simpler process.
- Customer experience. In B2C ecommerce, you have the ability to control almost every aspect of the customer experience, and good customer service can increase customer loyalty.
- Customer data. Using data like email addresses, customer behavior patterns, and conversion stats can inform marketing campaigns. With online shopping, analytics are helpful in identifying personas and patterns that can help you target customers directly.
B2C has the power to customize and personalize experiences to keep customers engaged and excited about your company’s offerings.
Different B2C companies use different approaches to host and sell their products in a way that makes the most sense for their specific business and customers.
The following are real-life examples of B2C companies using some of the five common ecommerce sale types:
- Costco — direct seller. Even though Costco sells products from a variety of brands, the company is still selling directly to the consumer from its store.
- The Wall Street Journal — fee-based. While The Wall Street Journal offers some free articles, readers need to pay a subscription fee for full access to the newspaper’s content.
- Etsy — intermediary. Etsy does not sell products on its own but rather provides a platform for businesses and potential customers to come together. Small business owners can sell their products on the platform, and customers can buy products from these businesses through the Etsy platform.
- Twitter — advertisement-based. Twitter does not own the products or services shown on its platform. Rather, it has ad space that companies can buy to promote their products and services.
- Facebook — community-based. Marketers can use Facebook to target ads to potential customers based on certain demographics. With Facebook Groups, people can interact with others who share their interests, making it easy for marketers to find their target audience.
B2C ecommerce is a great way to connect with customers across the globe. But to reach all those customers, you need to have the right tools and technologies in place.
Getting started with B2C ecommerce
There are many benefits to B2C ecommerce and a variety of business models to choose from. While they share some characteristics, B2C and B2B ecommerce are very different. When you’re ready to get started with B2C ecommerce, think about which model makes sense for your company. You may want to sell a product or service directly to consumers — or maybe using an intermediary makes more sense.
No matter how you’re selling your product or service, Adobe Commerce gives you all the tools you need to manage multiple channels, personalize customer experiences, and process payments.