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What is B2C? Everything About Business to Customer Model

9 min read

There are two primary business models in the modern landscape. The first is selling to other businesses, known as B2B (business to business). The second method is selling directly to consumers, called B2C or business-to-consumer.

This post will answer the question, “What does B2C mean?” and provide you with everything you need to know about running a B2C business.

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What is a B2C Business Model?

In the B2C model, organizations purchase products and goods from wholesalers or manufacturers and sell them to consumers at higher retail prices.

Before the internet, B2C mostly referred to in-person shopping at big box retailers through infomercials or TV or radio advertisements.

Nowadays, B2C has a massive business channel thanks to the internet. Ecommerce selling, or buying goods online, continues to shape the economy and the future of shopping behavior.

In 2023 alone, global ecommerce revenue is projected to reach over $6 trillion USD.

What is a B2C Company?

Now that you know what the B2C business model looks like, let’s explore what a B2C company is.

B2C Company Examples

A B2C company is any company that sells products and services directly to the consumer, whether in-store, online, or both.

Big company names and services you may recognize are:

  • Amazon
  • Target
  • Walmart
  • Ebay
  • Walgreens
  • Verizon
  • Netflix
  • Pandora
  • Starbucks
  • Old Navy
  • Restaurant chains
  • Hotels, Air BnB
  • Hair salons and beauty services
  • Housekeeping services

As you can see, the companies listed span various markets, including technology, beauty, clothing, travel, media, and more. B2C is one of the largest markets in the world!

A B2C company may provide a service to consumers, like a hair salon, a restaurant, or a hotel stay. They may sell products like smartphones, clothing, or makeup. They can be media entities or streaming services, like Netflix, Hulu, or Disney+.

What is B2C Sales?

B2C sales consist of all the ways businesses can sell products and services to consumers, from brick-and-mortar stores via streaming services to online selling through ecommerce websites.

The Primary Challenge of B2C

In the last decade, the internet has completely changed how consumers shop. In 2022, 21% of global retail sales occurred online; we can only expect those numbers to increase as time passes.

B2C companies that utilize online storefronts can market to their potential customers in various ways, from social media to newsletters, SMS marketing, and tailored website content. Companies can present a branded experience 24/7 rather than when customers enter the store’s doors.

Ecommerce is the critical change in B2C since the birth of the internet. Not to say there isn’t still a place for brick-and-mortar stores in the market; the highest category of goods bought in-person is groceries at 60%.

It’s also important to consider the hybrid shopping experience, where consumers may browse products online first and then purchase in-store. This usually occurs for apparel, shoes, and home decor items.

Types of B2C Ecommerce Companies

Now that you have a few examples of B2C companies, let’s explore the various types of B2C ecommerce companies and see how they differ.

Direct Sales

These companies, like Amazon, Target, or Apple, sell directly to consumers online. Many of these companies also have brick-and-mortar stores, making them more competitive in the market as they cast a wider net.

Direct sales companies include small businesses that create and sell their products online to customers.

Intermediaries

Intermediaries don’t offer their own products. Instead, they act as a middleman between buyers and sellers. This type of company typically charges a small fee for orchestrating the connection between the two parties, which is how they profit.

Intermediary examples include Poshmark, eBay, Etsy, and Expedia.

Ad-based

Advertising-based B2C companies leverage web traffic on various sites and platforms (including social media) to promote products to consumers on Facebook, Instagram, and different popular websites.

Affiliate marketing is an ad-based strategy where companies partner with influencers to promote their products to their audience.

Community

Community-based companies, including online forums and social media platforms, leverage user insights and data to serve targeted ads to website visitors.

Facebook offers paid advertising for companies by creating targeting ads through the data gathered about their users.

Fee-based

Fee-based B2C companies utilize the subscription model, charging consumers monthly to access their service or content. Fee-based services offer exclusive content that consumers won’t find anywhere else.

They also create tiers within their content so users can pay a flat fee or upgrade to a higher tier for additional, exclusive content.

Fee-based platforms include news outlets like The Wall Street Journal and streaming services like Netflix and Disney+.

Benefits of B2C Ecommerce for Brands

Whether you’re migrating from a physical store or just launching a new business, B2C ecommerce has many benefits and values for all kinds of companies.

Reach

The beauty of ecommerce lies in the global reach you’re accessing. No matter your location, someone across the ocean can find your business and become a customer. That type of reach isn’t possible with brick-and-mortar stores, even for the biggest names in the industry.

Cost-effective

Without the cost of running a physical store, companies can save significant cash by migrating to ecommerce stores. This means less money spent on paying employees, utility bills, and running the physical store.

These funds can be redirected to a more substantial marketing budget, more inventory, better quality products, and expanding your offerings.

Time to buy

In the online setting, most consumers are ready to buy, or at least easily influenced to buy. The sales process is much shorter when compared to B2B marketing, which involves many stakeholders, product comparisons, and research.

Marketing metrics

Thanks to B2C ecommerce platforms and tools, tracking metrics and buyer behavior is much more efficient. Companies can track the success of their paid ad campaigns, monitor conversions on their website, track high-performing products and website pages, and determine how a visitor found their website.

Analytics like these help improve marketing strategies, create better websites, and build better customer relationships.

Promising business model

While B2C has existed for decades, the ecommerce piece is new to the scene. Ecommerce sales in Q3 of 2022 were 14.8% of total retail sales, 2.5 times higher than the same quarter in 2013.

The growth of ecommerce is exponential, and the companies that adapt to consumer and market changes are setting themselves up for success in the long run.

B2C vs. B2B: Key Differences

While B2C companies sell to consumers, B2B companies sell to other businesses. This is the primary difference, but here are a few other critical differences between the two.

B2B companies aim to provide other businesses with work-related products and services, while B2C companies provide consumers and everyday people with products to improve their lives.

While both business models strive to build strong relationships, B2B focuses on the business relationship, and B2C focuses on providing value and credibility to consumers and building a solid customer base.

Other differences include order size, product offerings, and the end-user.

Final Thoughts on B2C

As a business model, B2C offers invaluable benefits for companies and consumers. You’ll enjoy global reach, less overhead costs, improved marketing metrics, and more.

A critical piece of running a B2C business is the ecommerce component. Online companies are much more accessible to their customer base and can create better interactions and relationships through social media, online forums, and their website. Get started with your ecommerce website today using Ecwid.

 

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About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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