What is E-business model? Explain different types of E-business models in detail.

 

What is E-business model? Explain different types of E-business models in detail.

Meaning- 

An e-business model is essentially a company's strategy for becoming a successful online business. The administration of running any business via the internet, extranet, online, and intranet is known as electronic business (E-Business). This would include purchasing and selling goods or services using electronic business transactions, as well as offering customer or technical support via the internet. E-business is related to E-commerce, but it includes more than just the act of purchasing and selling services or items through the internet. Online order processing, Customer Relationship Management, supply chain management, and other business activities are all part of e-business. Because e-commerce is a subset of e-business.

Types of E-business Models-

1.      Business-to-Business(B2B) E-business model- The exchange of products, services, or information between businesses, rather than between businesses and customers, is known as B2B. A B2B transaction occurs when two businesses, such as wholesalers and online retailers, conduct business together. Each company benefits in some way in most B2B business models, and they often have similar negotiation power.

Significance of B2B E-business model-

  (i)  Wider Visibility- Geographical limitations are removed when items and services are offered online. Potential customers from all over the world can see a company's catalogue and make purchases using an internet connection. Because the company is online, it can use digital marketing practices like search engine optimization to expand its reach even farther at a lower cost than traditional advertising methods.

   (ii)  Versatility- E-commerce can enable a B2B business to sell both to businesses and directly to consumers, as proven by the B2B2C model. A B2B company can expand its sales and customer base by building the system to handle buy amounts of all sizes and targeting marketing to multiple audiences.

   (iii) Lower Costs- A B2B e-commerce business that operates only online can eliminate the need for a storefront and all of the related overhead costs and personnel requirements. A digital platform may also automate repetitive procedures like invoicing and order fulfilment, which can assist to expedite operations while reducing the risk of costly mistakes.

        Examples of B2B E-business Model is Amazon Business, Alibaba, AliExpress etc.

2.  Business-to-Consumer(B2C) E-business model- Business-to-consumer (B2C) refers to the process of selling products and services directly to customers who are the end-users of the company's products or services. The majority of businesses that sell directly to consumers are referred to as B2C businesses. In the B2C model, a customer visits a website, chooses a catalogue, places an order, and an email is delivered to the company. The goods are dispatched to the buyer after the order is received.

    Significance-

    (i)  Reach more customers- This difficulty can be solved by using the "ecommerce" component of B2C ecommerce. By putting your business online, you're making it accessible to anyone who has access to the internet, regardless of where they live. This includes not only local clients, but also people from across the country and even worldwide customers if you chose to expand globally. When it comes to ecommerce, your target market is anyone who can get to your online store and is looking for the things you sell.

    (ii)  Reduce overhead Costs- Overhead costs are incurred by every firm. Running a physical business alone in traditional B2C commerce might require high overhead expenditures such as rent, employee pay, utility bills (such as water, phones, and electricity), and so on. However, the company has other overhead costs that are unrelated to the physical store, such as inventory purchases and warehouse space. As a result, the physical store adds to the already costly process of running a business. You can considerably lower your total overhead costs by converting to ecommerce because you won't need a physical store and will be able to manage your store purely online.

        Examples- Amazon, Walmart, Shopify etc.

 3. Consumer to Consumer (C2C) E-business Model - Consumer-to-consumer commerce, or C2C, is commonly defined as one person selling goods or services to another person over the internet. This transaction is handled by a third party who takes care of the transaction details in exchange for a fee for connecting the parties. While one person may technically be the seller in this scenario, it is classified as consumer-to-consumer because the seller is not a traditional firm.

    Significance of C2C E-business model-

    Both buyers and sellers gain benefits from removing a business from a sales transaction.

(i)  Higher margins and lower prices- By cutting out the intermediary (wholesalers and retailers), sellers can earn bigger margins on their sales and buyers can get better deals.

(ii)  A larger selection of goods and services- The C2C model is great for people who trade in rare collectibles or used things that are difficult to find in regular enterprises.

(iii)  Convenience for both parties- Many of the restrictions that prohibit customers from using other company models are removed with the C2C model. Many sellers, for example, find the fees of operating a typical small business prohibitive, and some don't even want to sell as a primary source of income. Finding cheaply priced goods and services in brick-and-mortar establishments can be a headache for shoppers. C2C systems eliminate these inconvenient aspects of doing business and make it simple to do so from the comfort of your own home.

            eBay, Amazon Marketplace, and Etsy are examples of C2C businesses.

4.  Consumer-to-Business(C2B) E-business model- Businesses sell products or services directly to consumers under the business-to-consumer e-commerce model. Consumers offer products or services to businesses in exchange for cash or other benefits in a consumer-to-business (C2B) relationship. Businesses look for professional service providers or different product merchants on C2B online platforms, then recruit independent workers or freelancers who suit their demands. The platform is often a third-party that charges a fee for connecting merchants and businesses.

            Significance of C2B E-business model- 

(i)  Flexibility- Businesses and sellers can choose their own income parameters, such as service duration, payment rate, and product delivery dates. This allows freelancers to have more scheduling freedom while providing their services.

(ii)  Higher earning potential- Sellers have limitless earning potential since they can work as much as they want and sell their services and products to as many companies as they desire.

(iii)  Wider Reach- Businesses can select how they hire sellers, allowing them to hire from specific regions with lower average income or cost of living, lowering their costs.

(iv)  Variety of work- Sellers have the opportunity to obtain important job experience with a variety of businesses on a variety of projects, as well as be compensated well for their efforts.

(v)  Independence- Consumers can sell their goods or services to businesses without having to start a company or start out on their own.

Examples-

(i)  Referral programs

(ii)  Paid testimonials

(iii)  Data sharing.

(iv)  Fiver

(v)   Freelancers

(vi)  Contractors

(vii)  Gig Workers

(viii) Royalty-Free

(ix) Licensed Photography

5.  Business-to-Government (B2G) E-business model - Business-to-government (B2G) refers to the relationship between a company and government agencies and institutions. B2G is a sales model in which businesses sell goods, services, and information to governments or government agencies (such as federal, state, or local agencies). Businesses providing products, services, or information to governments or government agencies are known as business-to-government (B2G).

Example- Business pay taxes, file reports, or sell goods and services to Govt.

6.  Government-to-Business(G2B) E-Commerce- G2B (government-to-business) is a business model in which the government provides services or information to private businesses. To approach commercial entities, the government uses a B2G model website. Auctions, tenders, and application submission are all supported by such websites.

Examples are Aadhar Card, Pan card.

7.  Peer-to-Peer(P2P) E-business model- A peer-to-peer (P2P) service is a decentralized platform that allows two people to communicate directly with one another without the need for a third party to interfere. Instead, the buyer and seller use the P2P service to transact directly with one another. Search, screening, rating, payment processing, and escrow are some of the services that the P2P platform may offer.

Conclusion-

Even though the stock market and commodities plummeted, E-Commerce was able to survive and receive a high volume of transactions. In the course of our operations in Malaysia, e-commerce presents a huge opportunity. It's also about incorporating new approaches and styles into a transaction. It is truly much better to bring the goodness of the individual or the state by using the broad E-Commerce in the Internet world.

E-commerce has certainly risen to prominence in our society. Companies who take E-Commerce seriously and devote appropriate resources to its development will be successful in the future. E-commerce isn't just a technical problem; it's a full-fledged commercial venture. Companies who utilise it as an excuse to fully re-design their business operations are most likely to benefit. Furthermore, E-Commerce is a beneficial technology that allows customers to connect with businesses and enterprises all over the world.