Nine Types of eCommerce Models—Classifying Relationships
Updated · Mar 06, 2023
There are many types of ecommerce. The broadest models are defined by the parties involved.
In this blog post, we will take a closer look at nine of the broadest models. We will explore what each model entails.
By the end of this post, you should have a better understanding of which ecommerce models your business will fit into.
There are nine broad categories of ecommerce:
- Business-to-business (B2B)
- Business-to-consumer (B2C)
- Consumer-to-business (C2B)
- Consumer-to-consumer (C2C)
- Business-to-government (B2G)
- Consumer-to-government (C2G)
- Government-to-business (G2B)
- Government-to-government (G2G)
- Government-to-consumer (G2C).
Each of these ecommerce business models is distinguished by the different parties involved. As you can probably tell by now, half of the models are just an inversion of the other four, so why aren’t they counted as the same thing? How does, for example, B2C differ from C2B?
Well, when looking at the acronyms (G2B, B2C, etc) the first letter indicates the provider, while the second indicates the client. Therefore in B2C, a business is providing something to a consumer, while in C2B, a consumer is providing something to a business.
Various businesses may engage in more than one type of ecommerce, too, as you’ll soon see.
Side note: Although “C” always means “consumer”, it’d be better to think of it as meaning “individual.”
With the groundwork laid, let’s explore each model.
B2B eCommerce Model
Business-to-business (B2B) ecommerce refers to the electronic exchange of goods and services between businesses. It makes up 80% of business transactions, with only a small 20% occurring offline.
Although B2B ecommerce can take many forms, it typically involves the use of online ordering systems, automated inventory management systems, and electronic data interchange (EDI) to streamline the exchange of information between buyers and sellers.
B2B ecommerce is the largest type of ecommerce. Businesses often pay each other millions of dollars for goods and services.
A good example of B2B is Amazon, which engages in nearly every one of these models. Let’s be more specific. Amazon Web Services provides hosting to a number of big businesses. This includes Netflix, Reddit, and Salesforce, among others.
To illustrate it further: Amazon (business) provides a service to Netflix/Reddit/Salesforce (businesses).
B2C eCommerce Model
Business-to-consumer (B2C) ecommerce refers to the online sale of goods and services from businesses to consumers. This is the model most people are familiar with from personal experience. It’s prevalent throughout daily life: ordering groceries online, paying for streaming subscriptions, etc.
B2C is used by everyone from small retailers to large multinational corporations. B2C ecommerce generally entails a lower degree of customization and personalization than business-to-business (B2B) ecommerce, as customers are typically less involved in the product development process, and are usually looking for “ready to go” products and services.
Some common examples of companies that B2C ecommerce business models include online retailers such as Amazon, as well as the vendors that operate on its marketplace, and digital service providers such as Spotify and Uber.
Illustration: Spotify (business) sells a subscription to you (consumer).
C2B eCommerce Model
Customer-to-business (C2B) ecommerce, is a type of online transaction in which consumers/individuals sell products or services to businesses. This is a less common model, as it inverts the setup most are used to.
A common type of C2B is freelancing, through sites like Fiverr. It has become common for businesses to get freelancers to do small jobs. A good example of this is corporate design. Businesses often get individual artists to design logos or even graphics for once-off campaigns.
Another good example is affiliate marketing. Here individuals will drive traffic towards businesses for commissions.
Example: You design a logo and sell it to a business.
C2C eCommerce Model
Consumer-to-consumer (C2C) ecommerce is any type of transaction that takes place between two private individuals. This is normally done through online marketplaces or classifieds.
The individual may or may not be a registered business, and transactions of this nature can often be informal. For example, one may be selling a second-hand sofa, post an ad online, and then someone else will come along and buy it in cash.
The Facebook Marketplace is a good example of this, but the most prominent example has to be eBay. eBay allows anyone to set up a storefront and begin selling items new or secondhand.
In these cases, a consumer is selling to another consumer. Example: You sell a wood carving to another individual.
B2G eCommerce Model
Business-to-government (B2G) ecommerce is a term that refers to transactions where businesses provide goods or services to government agencies.
This is one of the most lucrative models because it usually involves elaborate projects, or years-long contracts worth billions of dollars. For these same reasons, it also requires a lot of security and very strict oversight and is usually subject to regulatory compliance requirements.
We’re sure you can guess the example we’ll use for this ecommerce model… Amazon Web Services has cloud services that cater specifically to governments. Competition between businesses for government contracts is often hot, just think of that time Amazon and Microsoft fought over a Pentagon contract.
The coronavirus pandemic saw a boom in B2G relations, with governments all over to world awarding PPE contracts to various businesses.
To illustrate: Amazon and Google agree to build a cloud system for the Japanese government.
G2B eCommerce Model
Government-to-business (G2B) ecommerce is very closely related to B2G, more so than other models and their counterparts.
G2B is more focused on the infrastructure that allows businesses to offer services to the government and apply for contracts. It also refers to non-commercial interactions, such as the granting of business licenses, and businesses seeking government intervention.
It could also include state-owned entities (nationalized mines, state banks, etc) providing to businesses.
Simply put, it’s the government providing services to businesses.
G2C eCommerce Model
Government-to-consumer (G2C) ecommerce, is the process of government agencies selling products and services to consumers online.
This can include anything from renewing a driver's license to buying a fishing license to paying taxes.
Much like G2B, G2C ecommerce is focused on infrastructure, and more uniquely, digitalizing civil procedures.
G2G eCommerce Model
Government-to-government (G2G) ecommerce encapsulates governments or government agencies, providing to each other.
This most commonly refers to international trade between governments, for example, the selling of gas, oil, or weapons, and in some cases noncommercial transactions like disaster relief.
It could also refer to international infrastructure projects, such as building undersea cables that will improve private services like hosting.
On a local level, it can refer to government agencies cooperating and assisting each other.
C2G eCommerce Model
The most uncommon model is consumer-to-government (C2G). This normally just refers to the process of consumers reaching out to governments to make use of G2C, although it could also refer to citizens who report things to the government.
Citizens making use of a helpline to report infrastructure damage, corruption, and so on, can be thought of as C2G, with consumers/individuals providing help to the government.
There you have nine types of ecommerce and the parties that are involved in them.
The ones involving the government are less often discussed, due to them often being non-commercial, but are still important for a rounded knowledge of the ecommerce landscape.
Remember, anyone business or person could be involved in more than one type, so take the time to understand each one, and you may just discover new opportunities for your existing business.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.