B2B & B2C business model

The development of the information infrastructure of global internet networks has led to changes in the ways of doing business and the emergence of the electronic market. It is known that e-business is an entrepreneurial activity in which the advantages of information technologies are used to create profit. Today the main models of e-business on the world wide web are B2B and B2C.

What is B2C business model

From a commercial point of view, the business to сonsumer model seems to be the most promising direction of e-commerce, as its basis is e-retail. Retail sales through the Internet belong to a rapidly developing field of the economy and constitute a significant share of the e-commerce market.

Types of B2C business models:

  1. Portal – it is a platform that combines content (such as news, meteorological outlooks, rates of currency etc) and services (community forum, downloads, chat, entertainment etc). The owner gets profit due to advertising, subscription and transaction payments.
  2. E-tailer – is a web version of a traditional store. It can be like a virtual storefront that provides only price lists or an online store that allows to choose and buy goods via the online global network.
  3. Content provider – a platform that contains digital content, such as music, video, photos etc. The profit is gained by subscription commission, advertising or download payments.
  4. Transaction broker – process online transactions usually conducted in person by phone or e-mail. The owner gets profits via transaction payments.
  5. Market creator – uses Internet technology to develop markets that connect buyers and sellers. The revenue is got by transaction commissions.
  6. Service provider – provides services that save time, are convenient or cheaper alternatives to common service providers. Owners get profit via subscription fees, advertising, sales of services.
  7. Community provider – it is a social network that brings together people with the same interests and allows sharing content, communication etc. The profit is gained by advertising payments, subscription commissions, sales revenues, transaction fees, affiliate fees.

Let’s take a look at a real b2c business model example. A certified personal trainer and a group fitness instructor approached SpdLoad team with the idea of creating a platform that gives people from all over the world who want to change their bodies access to her fitness programs.

Therefore, we developed a website that is an example of a B2B e-tailer model. The client sells fitness videos and receipts for healthy nutrition, so the platform includes referral program, coupons, promotions; user dashboard and admin panel; payment and payback systems and booking that are important features of a B2B site.

What is B2B model

Model business to business represents a virtual interaction of companies using appropriate information technologies. Through special B2B sites, companies can exchange information, find new partners and suppliers, and conduct trading operations with other companies.

Trading B2B-site unites solutions for consumers and suppliers in a single whole on the basis of a centralized online portal. There are several architecture types of b2b model that will be considered later.

These are the main types of B2B business models:

  1. E-distributor. These are companies that provide goods and services directly to sole businesses and make profits via this activity. These companies are run by a firm that wants to work for many customers.
  2. E-procurement. These firms create and sell access to digital e-markets. They make profits by transaction commissions, payments based on the number of computers using the service or annual licensing payments and are usually named as application service providers
  3. Exchanges (B2B hubs). This is an e-marketplace where providers of products and commercial purchasers can do business. They get profits by charging a commission fee that depends on the size of the transaction conducted among business parties.
  4. Single firm network. They are the most widespread and are run wholly by a one large purchasing company. Joining in is by offer only to a long-term supplier of direct inputs.
  5. Industry-wide network. These are networks controlled by a consortium of large companies in a field and their goals are:
  • provide a neutral set of standards for commercial communication;
  • shared and open technology platforms for solving problems within a field;
  • collaborative activities
3 types of B2B architecture model in e-business can be distinguished
  • Supplier Oriented marketplace − a typical marketplace offered by supplier created for sole clients and business representatives. A supplier provides e-shops for sales boost.
  • Buyer Oriented marketplace − buyer possesses a marketplace or an e-market. He wants providers of goods and services to bid on product’s catalog. A Buyer firm starts an auction website.
  • Intermediary Oriented marketplace − an agent firm owns a marketplace for business consumers and suppliers to do business together.

A B2B business model example is a platform that was developed by SpdLoad team and is aimed at local noise recognition with the subsequent transfer of audio tracks to the server and their display in the web part. Noisam is an audio security system that monitors property security. It can be used by businesses in such cases:

  1. Hotels without staff – to determine the level of noise in the halls, kitchens in the evening rest of the guests. The information is being transmitted that it is noisy and the hotel administrator takes measures
  2. Safety of the objects such as factories, ports, power generating stations, warehouses, railway stations, even forest tracts.

This solution saves time and money for companies, that is why the platform has its demand, the owner sells these services to other companies and it is a good example of a b2b model.

What distinguishes a B2B from a B2C e-business model
Target audience Large Small & focused market
Sales Cycle Shorter Longer (up to 1 year)
Sales Driver Recognition & repetition Relationship and detailed information
Prices Fixed price Highly variable
Purchasing decisions Emotions, impulse. Simple Rational, complex
Number of decision makers 1 or 2 5-12
Aim of marketing Awareness Education, consensus building

Looking at the table above, it can be concluded that b2b and b2c models have a lot of distinguishes. In spite of different approaches, types and architecture models, b2b platforms, as well as b2c platforms, are good ideas for business, since e-commerce is the most widespread and beneficial way of doing business nowadays. Although, all the details should be taken into account in order not to lose among other e-business competitors.

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