Business-to-consumer electronic commerce
Business-to-consumer electronic commerce (B2C) is a form of
electronic commerce in which products or services are sold from a firm
to a consumer.
1.Five Classifications of B2C E-Commerce
188.8.131.52 Types of Brokers:
1.3 Advertising-Based Models
1.4 Community-Based Models
1.5 Fee-Based Models
2.Advantages of B2C E-commerce
3.Challenges Faced by B2C E-Commerce
4.What Separates the Best from the Rest?
1.Five Classifications of B 2C E-Commerce
Companies that provide products or services directly to customers
are called direct sellers. These types of B 2C companies are the most
well-known. There are two types of direct sellers: e-tailers and
Upon receiving an order, the e-tailer ships products directly to the consumer or to a wholesaler or manufacturer for delivery.
* Example: Amazon.com
The manufacturer sells directly to consumers via the internet. The
goal is to remove intermediaries, through a process called
disintermediation, and to establish direct customer relationships.
Disintermediation is not a new idea as catalog companies have been
utilizing this method for years.
* Example: Dell.com
Online intermediaries are companies that facilitate transactions
between buyers and sellers and receive a percentage of the
transaction's value. These firms make up the largest group of B 2C
companies today. There are two types of online intermediaries: brokers
A broker is a company that facilitates transactions between buyers and sellers.
1.2.1 .1.Types of Brokers:
A corporation that helps consumers place buy and sell orders.
A company that helps consumers buy from a variety of stores.
Example: Yahoo! Stores
A firm that offers customers access to a variety of stores and
provides them with transaction services, such as financial services.
Example: Amazon zShops
An intermediary that offers a fee to locate a person, place, or idea.
Example: BountyQuest (now defunct)
A company that helps consumers compare different stores.
An infomediary is a firm that acts as a filter between companies and
consumers. Individuals provide infomediaries with personal information
and in turn receive targeted ads. Companies pay these infomediaries for
the information that they collect.
In an advertising-based system, businesses' sites have ad inventory,
which they sell to interested parties. There are two guiding
philosophies for this practice: high-traffic or niche. Advertisers take
a high-traffic approach when attempting to reach a larger audience.
These advertisers are willing to pay a premium for a site that can
deliver high numbers, for example advertisements on Yahoo! or AOL. When
advertisers are trying to reach a smaller group of buyers, they take a
niche approach. These buyers are well-defined, clearly identified, and
desirable. The niche approach focuses on quality, not quantity. For
example, an advertisement on WSJ.com would chiefly be viewed by
business people and executives.
In a community-based system, companies allow users worldwide to
interact with each other on the basis of similar areas of interest.
These firms make money by accumulating loyal users and targeting them
* Example: Yahoo! Groups
In a fee-based system, a firm charges a subscription fee to view its
content. There are varying degrees of content restriction and
subscription types ranging from flat-fees to pay-as-you-go.
2.Advantages of B 2C E-commerce
* Shopping can be faster and more convienient.
* Offerings and prices can change instantaneously.
* Call centers can be integrated with the website.
* Broadband telecommunications will enhance the buying experience.
3.Challenges Faced by B 2C E-Commerce
The two main challenges faced by B 2C e-commerce are building
traffic and sustaining customer loyalty. Due to the winner-take-all
nature of the B 2C structure, many smaller firms find it difficult to
enter a market and remain competitive. In addition, online shoppers are
very price-sensitive and are easily lured away, so acquiring and
keeping new customers is difficult.
4.What Separates the Best from the Rest?
A study of top B 2C companies by McKinsey found that:
* Top performers had over three times as many unique visitors per
month than the median. In addition, the top performer had 2,500 times
more visiters than the worst performer.
* Top performers had an 18% conversion rate of new visitors, twice that of the median.
* Top performers had a revenue per transaction of 2.5 times the median.
* Top performers had an average gross margin three times the median.
* There was no significant difference in the number of transactions per customer and the visitor acquisition cost.
Essentially, these masters of B 2C e-commerce (eBay, Amazon, etc.)
remain at the top because of effective communication and value to the
* Business-to-business electronic commerce
* Bricks and clicks
* Krishnamurthy, Sandeep. E-Commerce Management. Mason , Ohio : Thomson/South-Western, 2003.
* Haag, Stephen, Maeve Cummings, Donald J. McCubbrey, Alain
Pinsonneault, and Richard Donovan. Management Information Systerms: For
the Information Age. 2nd Canadian ed. New York : McGraw-Hill Ryerson,