5 Major Types of eCommerce

  Reviewed by: Michelle Seidel, B.Sc., LL.B., MBA
  Written by: Rose Johnson      Updated November 21, 2018
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With significant increases in technology over the past couple of decades, e-commerce has become a major force in the economy. On computers, smartphones and tablets, businesses sell to other businesses and consumers, consumers sell to each other and to businesses and even the government offers online transactions to businesses and consumers alike.

Business to Business, B2B

Business to business (B2B) e-commerce transactions happen between two companies. B2B activity is not new, but the internet has changed how everything is transacted. Examples of B2B is a company that outsources its bookkeeping activities to another company, and a business that buys its products from a wholesaler. B2B transactions are usually handled with lines of credit and companies often have long-lasting relationships with one another. The seller has responsibility of determining the buyer's creditworthiness.

Business to Consumer, B2C

Business to consumer (B2C) e-commerce transactions happen when customers purchase products and services from companies through the internet. Online shopping has increased significantly in recent years. Many companies take extreme security measures to protect the sensitive financial information of consumers. B2C e-commerce transactions are not strictly bound to retail shopping. Many customers purchase health insurance, auto insurance and similar products online. One reason for the popularity of B2C e-commerce is consumers enjoy the convenience of purchasing products and services online.

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Consumer to Consumer, C2C

Consumer to Consumer (C2C) e-commerce activity is more recent, and usually requires a business to play the middleman. Companies like eBay and Amazon have made C2C more popular. It works by companies listing their products to sell on a third-party site. Consumers looking to purchase products visit the site and search the available products. The consumer purchases the product and the seller is responsible for delivering the product. The business that plays the middleman usually requires a transaction fee from either the seller or buyer.

Consumer to Business, C2B

Consumer to business (C2B) transactions occur when a company places a job online and businesses bid on the project. For example, a consumer needing a new website will place the details of the job on a bidding site along with his budget. Companies with experience in web design will submit bid proposals to the consumer. The consumer chooses a company, submits the agreed upon payment to the business and waits for the delivery of the website. Bidding companies act as the middleman verifying that payment and service are delivered.

Government E-commerce, G2B and G2C

Government e-commerce transactions serve both businesses and consumers. Examples of government to business, or G2B, transactions, include government auctions, tenders, requests for proposals and license applications. Government to consumer, or G2C, transactions include things like registering for a marriage certificate, or paying for a parking ticket. A key benefit of government e-commerce services include reduced wait times and faster access to government services.

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