Notes and Study Materials

Business Models Of E-Commerce



In E-commerce, business models are models that define the way in which business is' done over the Internet. Creating and deploying an E-commerce Website is a prerequisite for creating any E-commerce solution. Identification of the business model is first step in the development of an E-commerce Website.
Business models in E-commerce can be categorized into the following four types, depending on the type of parties involved in transaction:


1. Business-to-Business:

It is defined as E-commerce between any two companies. Business-to-Business (B2B) E-commerce, which deals with relationships among businesses that have two primary components, E-frastructure and E-market. E-frastructure is the architecture of B2B, and E-market refers to a Website where buyers and sellers interact with each other and conduct transactions. Some of the application areas of B2B are supplier management, inventory management, distribution management, channel management and payment management.


2. Business-to-Consumer:


It is defined as E-commerce between companies and consumers. Business-to-Customer (B2C) involves selling and buying of goods and services over the Internet from Web retailers to Web customers. With B2C E-commerce, the retailer sells the products and the services to unknown and un trusted strangers. Therefore, extra effort must be made to capture customer and payment information. The most common application areas of this type of E-commerce are purchasing product and information and personal finance management.



3. Business-to-Government:


It is defined as E-commerce between companies and the public sector. Business-to-Government (B2G) E-commerce refers to the use of the Internet for public procurement, licensing procedures and the other government-related operations. Internet-based purchasing policies increase the transparency of the procurement process and reduce the risk of irregularities.


4. Consumer-to-Consumer:


It is defined as E-commerce between consumers. Customer-to-Customer (C2C) E-commerce is characterized by the growth of the E-marketplace and on-line auctions, particularly in industries where business firms can bid for what they want from multiple suppliers. 

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