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Business Models for E-commerce

Here, we discuss about Business models for E-commerce and its types in detail one by one as follows-

Business Models for E-commerce
  • The business models for e-commerce are defined based on the parties involved and the types of the business activities or services provided.
  • Many business models have been under proposal.
  • The following are the most common and most popular business models.
  1. Business to Business (B2B)
  2. Business to Customer (B2C)
  3. Customer to Customer (C2C)
  4. Government to Business (G2B)
  5. Government to Citizen (G2C)
Now, we will discuss one by one in detail as follows-
(1) Business to Business (B2B) -
  • The business activities done by different business partners is called the Business to Business known as B2B.
  • A company who has implemented e-commerce may be dealing with other business organizations.
  • Implementing B2B e-commerce between businesses allows them to perform the transactions very fast without errors at low cost.
  • Two business parties involved in B2B exchange the information using set of standards known as EDI (Electronic Data Interchange) enabling them to perform the business transactions using computers without the involvement of human beings.
  • As the purchase orders are processed fast it reduces the total cycle time from the purchase order to shipping and finally billing.
  • Also possible to track the status of the orders. The payments between the partners are handled electronically which reduce the overhead as payments are done very quickly and without any errors.
  • As networks of two businesses communicate using Internet, the security becomes a major concern as sensitive information is exchanged between them, might be observed or interpreted by competitors. High-level security is required to implement B2B ecommerce model.
  • eg- www.tradeindia.com, www.cisco.com
(2) Business to Customer (B2C)
  • The B2C model built around selling of goods or providing the services to the customer using websites on Internet.
  • Any online shop selling goods directly to the customer falls in this catetory. eg- www.amazon.com
  • This type of websites provide very attractive catalog highlighting features of items with images including price. Some times video is available for the product.
  • Customer can select them by putting into shopping cart. Facilities are generally provided to view the items into cart, delete or update the items in cart.
  • When checkout is done the customers are prompted for online payment through credit card or net banking or such other options.
  • This model is widely used easy and popular model in e-commerce.
  • e.g. www.amazon.com, www.flipkart.com, www.rediff.com etc.
(3) Customer to Customer (C2C) -
  • C2C model enables peer to peer communication among the customers without involving business house.
  • The business house acts as broker and provides the platform for performing activities for the customers on their website.
  • A customer can register on the website and perform business activities directly with other customer.
  • The business house charges them based on transactions.
  • The online auctions of the goods by the customers are an example of C2C.
  • e.g. www.eBay.com, www.fabmart.com
(4) Government to Business (G2B) -
  • G2B is the part of e-governance initiatives by governments to help the business community to provide information and services online through websites on government network.
  • The business organizations can get the information regarding business policies, approvals for starting the business and other issues from the website directly.
  • The forms are provided which can be downloaded and submitted after filling them along with necessary documents.
  • In many cases, the facility of online filling and submission of the forms also provided. e.g. www.incometaxindia.gov.in is the website in which all the rules and regulations of taxes, different forms and facility to file the income tax return online are provided.
  • This model helps greatly in improving the efficiency of the government departments and encourages the business community to have hassle-free communication.
(5) Government to Citizen (G2C) -
  • G2C is also a part of e-governance where focus is on providing better services to the individual citizens.
  • The website provides necessary information regarding various government departments, various welfare schemes, different types of forms to be used by citizens for different applications, etc.
  • It also possible to provide different types of certificates like birth or death certificate online after applying in proper forms and providing necessary documents.
  • The Government of Gujarat developed their own network called GSWAN - (Gujarat State Wide Area Network) for this purpose and accessible as www.gswan.gov.in where links to all departments are provided.
Business Models for E-commerce
Business to Business (B2B)
Business to Customer (B2C)
Customer to Customer (C2C)
Government to Business (G2B)
Government to Citizen (G2C)
EDI
Business Models for E-commerce
Kinnari
Tech writer at NewsandStory
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