What is Business-to-Consumer?
What Is Business-to-Consumer (B2C)?
The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.
KEY TAKEAWAYS
- Business-to-consumer refers to the process of businesses selling products and services directly to consumers, with no middle person.
- B2C typically refers to online retailers who sell products and services to consumers through the internet.
- Online B2C became a threat to traditional retailers, who profited from adding a markup to the price.
- However, companies like Amazon, eBay, and Priceline have thrived, ultimately becoming industry disruptors.
B2C in the Digital World
There are typically five types of online B2C business models that most companies use online to target consumers.
1. Direct sellers. This is the most common model in which people buy goods from online retailers.
2. Online intermediaries. These are liaisons or go-betweens who don’t actually own products or services that put buyers and sellers together. Sites like Expedia, trivago, and Etsy fall into this category.
3. Advertising-based B2C. This model uses free content to get visitors to a website. Those visitors, in turn, come across digital or online ads. Large volumes of web traffic are used to sell advertising, which sells goods and services. One example is media sites like HuffPost, a high-traffic site that mixes advertising with its native content.
4. Community-based. Sites like Meta (formerly Facebook), which build online communities based on shared interests, help marketers and advertisers promote their products directly to consumers. Websites typically target ads based on users’ demographics and geographical location.
5. Fee-based. Direct-to-consumer sites like Netflix charge a fee so consumers can access their content. The site may also offer free but limited content while charging for most of it. The New York Times and other large newspapers often use a fee-based B2C business model.
What Are the 5 Types of Business-to-Consumer Models?
Typically, B2C models fall into the following five categories: direct sellers, online intermediaries, advertising-based B2C, community-based, and fee-based. The most frequently occurring is the direct seller model, where goods are purchased directly from online retailers. By contrast, an online intermediary model would include companies like Expedia, which connect buyers and sellers. Meanwhile, a fee-based model includes services such as Disney+, which charges a subscription to stream their video-on-demand content.
