B2C or business to consumer means when a business sells its products and services directly to the end consumers without any intermediary. The businesses and companies that approach customers directly and don’t employ middlemen are B2C companies and businesses.
Ecommerce and online shopping have promoted the B2C, where manufacturers and retailers market their products and services directly to the end customers by using the internet.
Michael Aldrich is the first person who made use of the B2C concept at his TV show in 1979, where he targeted his end consumers by using TV. Having a meal at the hotel, watching a movie at a cinema, shopping malls used to fall in the category of business to consumers. But the internet has given a whole new perspective and definition to the B2C phenomenon.
In other words, we can say that;
- B2C is the art of selling your product and services directly to the customers, without any third party or a middleman.
- Business to consumer market comprises of online retailers who approach their customers through the internet and online.
- Business to consumer market poses a serious threat to the conventional type of retail middlemen businesses who are accustomed to add their mark up.
- Daraz, eBay, Amazon, and Priceline are some of the pioneers of B2C business who broke the barriers and laid the foundation of the new era.
B2C is a type of business model that relies on its customers’ feedback so that they’d return for the shopping. Unlike business to business where you don’t need to worry about the service quality or the marketing campaign, it doesn’t involve customers’ emotional response.
Difference between B2C and B2B Model
B2B or business to business means that one business or a company buys products or services as a raw material from the other company. The business further reuses the product or service and then resells it to the end consumers.
B2B buying is formal and it involves a lot of documentations and clarifications, such types of deals are usually for the long term. B2C selling and purchases are usually quick because it involves only one person. The price and other terms and conditions also vary in both of these types of B2C and B2B models.
Types of Business to Consumer Models
Businesses and companies use different types of models to approach customers, business to consumer model offers five types of models and they are as follows;
Direct sellers are very casual types of models where people purchase products and services online. Small businesses, manufacturers and producers could be the direct sellers that market their products and services by using the online outlet.
Amway, Mary Kay, Avon Product, and Pampered Chef are some of the examples of direct sellers.
Online intermediaries comprise of different online platforms that redirect the traffic to the retail site. Such platforms don’t own or manufacture anything, the only thing they have is the traffic. Newly established online stores display their products ads on such platforms, and they work as an intermediary for such retail stores.
Etsy, Expedia, and Trivago are some of the famous platforms that work as online intermediaries.
Advertising based models comprise of those sites that offer something free content. Even though offering free content costs them a lot, but it helps them to increase the traffic on their website. Once they have huge traffic on their blog or site, then they can their platform into an online intermediary. Nowadays, most bloggers and website owners are using their platforms for ads.
Huffington Post offers free quality content to its users, and it has great traffic on its website in return.
Social and professional networking sites offer people a free platform to establish their social and professional networks based on their interests. Businesses use such platforms to directly target their required market or demographic.
Facebook, Instagram, LinkedIn, and Twitter are some of the very common examples of community-based models.
Fee-based models are such platforms that directly charge their customers by offering them the content of their choice or an unlimited on their platform for sometimes. Once the offer expires, you have to pay again to get unlimited access.
New York Times and Netflix are such fee-based platforms that charge from their customers.
Advantages of Business to Consumer
B2B and B2C are completely two different models; however, every model has some specific characteristics. Some of the advantages of business to consumer model are as follows;
According to an estimate, as on January 2020 more than 4.5 billion people use the internet across the world. The market over the internet doesn’t have any boundary, companies, and businesses are using the internet and multiple platforms to target their customers directly. They’re doing it by spreading information about their product when people have the awareness and knowledge, then they’d demand it.
When buyers and sellers directly communicate with one another, then it’s highly likely that the seller would satisfy the buyer’s needs and requirements, because now the seller knows the exact requirements of the buyer. Instead when there are multiple layers of middlemen are involved.
When businesses directly contact consumers, then they have to be very cautious about their product, delivery, and other services. All of these things combined to impact the perception of customers. If a customer has a better experience with the service, then it’s probable that he’d come again.
The messages businesses send to their consumers are very precise. Marketing team of businesses and companies work on their messages what they have to send to their customers so that the message shouldn’t be out of the context. It should mean what it’s planned to mean it.
Disadvantages of Business to Consumer
Some of the limitations and disadvantages of the B2C model are as follows;
You must have observed one thing while online shopping that there are so many online platforms. In other words, e-commerce and online shopping fields where there so many retailers who targeting their end consumers, are highly competitive. You won’t find any niche or field without competition.
One can easily enter in the e-commerce field and target its market, but attaining maximum market share is very difficult. Or even staying in the competition is very hard for a new business.
Although e-commerce provides businesses an opportunity to reach people globally, but the tricky question is what do they have the infrastructure to deliver their product or service? Country’s borders, taxes, political and other legal issues are involved that inhibit the business to reach the doorsteps of their customers globally.
Companies and businesses that are running their business operations across the world, they have made multiple deals with various governments of different countries.
Although buyers and sellers meet and contact directly, but their connection is limited to the images and written content only; the buyer has to make a decision based on the information provided by the seller. Buyer himself can’t check and feel the textures, shape, size, and quality of the product; he’s completely reliant on the seller’s words.
When buyer is completely reliant on the seller’s promise, then it raises a serious question on the buyer’s security. There are many platforms involved in the fraudulent activities, they aren’t providing the quality products or services what they claim to do so. The customer doesn’t have any leverage in the end.
In B2C, marketers have to consistently work on their platform to make it interesting and flashier, so the customers keep visiting the seller’s site. They also have to keep their website optimized with different search engines. If the site isn’t well optimized, then it won’t rank up in the searches, which means the customers won’t be to visit your platform for shopping.
SEO rules and policies of different search engines keep on changing with time; therefore, you need professional digital marketers whose job only searches engine optimization. Maintenance and SEO cost accumulates to make it very costly. At the end, it all comes down to the capital, the more money and resources your business has to hire professionals. It’s highly probable that you’d gather a larger market share.
Online security is one of the biggest challenges that online and e-businesses face today. Customers are reluctant to share their confidential debit and credit card details online unless your platform is safe.
To counter such issues, platforms like PayPal, Payoneer, and Venmo that provide the service of online payment processing.
Future of B2C
If we study the graph of online shopping and eCommerce trends, then there’s been an exponential increase in this field for the past decade. We can assume that e-commerce or business to consumer market is going to stay with us. We’ll witness revolutionary changes soon.
According to an estimate, retail in the US from 2009 to 2019 has risen from 34.1 million to 154.5 million US dollars. Therefore, it’s safe to deem that the future belongs to business to consumer model.