Categories of Electronic Commerce and the Consumer - Paper Example

In the modern world, the internet has become the most powerful tool in conducting business. As a consequence, many businesses have evolved as a result of proper utilization of the internet. Also, consumers find it easier to access goods online and make purchases. The trends have resulted in the rise of e-commerce companies such as Amazon.com and Alibaba.com. Such companies have dominated the market providing products to consumers in different ways. The study analyzes the three main categories of electronic commerce looking at the most valuable to an individual consumer.

Analysis

In electronic commerce (e-commerce), transactions are made online which involve buying and selling of goods (Laudon & Laudon, 2012). E-commerce involves various technologies which are involved including internet marketing, electronic payment, among many others that facilitate the online business. The e-commerce industry mainly saw growth during the 90s with the rise of giants Amazon, Alibaba and E-bay. The three companies still dominate the market in most parts of the world till present. There are three main categories of e-commerce which are business to consumers (b2c), business to business (b2b), and consumer to consumer (c2c).

The three main forms of e-commerce are executed well in the modern business environment. Companies have worked in every way possible to ensure that they can reach customers. Currently, there are numerous e-commerce start-ups across the world founded with the goal of providing a platform where customers make purchases of products and services. The three main e-commerce categories are as discussed below.

Business to Consumer (B2C)

Business to consumer is one of the most popular forms of e-commerce in the world. It involves business transactions conducted by a company and its customers. The customers are the end-users of the products and services (Sharma, 2016). All customers that sell directly to customers are referred to as business to consumer companies. The term was largely used to refer to online retailers of goods and services.

The rise of business to consumer e-commerce companies around the world can be attributed to the emergence of the dotcom era. The rise of internet usage in the United States was among the factors that pushed for individuals to look for ways to connect buyers and sellers via the internet. Companies that rose during this era attracted venture capitalists who funded their growth in the industry heavily. Some of the businesses that utilized the internet revolution in the 90's includes Alibaba, Amazon, E-bay and even Priceline. The names companies have experienced great success since their launch in the 90's to present.

The business to consumer form of e-commerce has the following advantages;

First, the business to consumer e-commerce model plays an advantage due to the readily available market for the goods and services. According to statistics, there has been a rise in the number of internet users across the united states (Sharma, 2016). As a consequence, the number provides a large market for e-commerce with products online waiting for consumers to make purchases. It is thus easier for a company to succeed in the business to consumers.

Research shows that the world is endowed with over six billion internet users. All the internet users in the world represent an opportunity and a ready market for products and services. Additionally, the B2C business model involves understanding the markets and thus exploring all the challenges. With the internet, businesses can explore the competition available and understand the areas where they can improve. The B to C business model makes it easier for businesses to understand about competition and their market size easily thus creating an easier path towards the creation of a stable business environment.

Secondly, the B to C model of e-commerce makes it easier for business owners to define their strategies for capturing the largest market size (Sharma, 2016). In the B2C environment, consumers continuously make purchases via a website or any other online platform. It is thus easier to read and understand the different consumer patterns involved in the business. Once a business can read and understand the different consumer patterns of its customers, it becomes easier to custom design advertisements specified to the customer. As a consequence, it becomes easier for the business to understand the customer needs and make adjustments where necessary thus gaining a competitive advantage to the B to C retailers that do not have an online platform.

Lastly, the business to consumer model of e-commerce makes it easier for customers to shop for their products and receive them right at their doorsteps. It thus increases the customer experience and customer satisfaction. As a consequence, the B2C model increases the ability of businesses to increase their customer base. The business can take advantage of the customer needs to provide better services that are served at their doorstep and thus provide a platform for the business growth in the long run. B2C business models are thus advantageous to business owners who can utilize on every resource to maximize the sales.

The business to consumer form of e-commerce has many advantages that are attached which are visible to successful companies such as Amazon.com. Even though the advantages play a key role to companies in the industry, the following disadvantages have contributed to the failure in some of the major e-commerce brands in the market. The following disadvantages will apply to the business to consumer e-commerce companies in world;

Business to consumer platforms requires constant marketing which involves all forms of marketing. Marketing of the platforms helps in increasing awareness of the brand in the market. It thus becomes more difficult for an e-commerce company to succeed without the continuous use of advertisements. Additionally, the ads come at an extra cost. The extra fee charged for marketing might not be enough to create returns on investment. Such cases present a barrier to entry for small e-commerce companies looking to explore the new market.

Business to consumer e-commerce platforms is likely to be unable to monitor the quality issue of all products supplied by their suppliers in the market. For example, in a platform with millions of suppliers, it becomes difficult for the management of the e-commerce to go through each store to evaluate the validity and genuineness of an item. Customers are likely to be disappointed once in a while because of the substandard goods and services distributed by the suppliers. In most cases, suppliers majorly focus on making sales rather than providing quality products and services. It is thus a difficult task handling such an issue when it comes to observing the quality of products.

Business to Business (B2B)

The business to business e-commerce model involves conducting e-commerce transactions between businesses (Barnes-Vieyra & Claycomb, 2001). For example, the purchase of products in wholesale by Walmart stores from the manufactured stores. The use of business to business e-commerce platform is advantageous to small businesses looking to achieve their goal of increasing their market share and increasing their sales. Business to business e-commerce offers such small businesses with good deals when it comes to wholesale products and also creates an environment for negotiations regarding pricing thus coming up with the best offers for the wholesale items. The B2B space provides the bulk transactions when it comes to sales which are not recognized by the media.

In the business to business e-commerce, it is important to consider factors such as procurement optimization to avoid low inventories, provision of best prices and also understanding the client needs (Barnes-Vieyra & Claycomb, 2001). In e-commerce, one of the most important aspects that need to be considered is customer satisfaction. Customers who purchase products online can easily trust or easily lose trust depending on the quality of goods and services they purchase. Wholesalers are thus a contributor to the global e-commerce revolution through their b to c platform the covers low-cost goods and services.

Alibaba.com is one of the B2B websites in the world that has contributed to the success of many small businesses. Businesses make orders for bulk purchases from Alibaba across the globe and receive their products within a short period. B2B thus plays at an advantage for business that is looking to get cheap products in bulk and sell to their customers locally. B2B websites are therefore marketplaces for businesses and wholesalers who communicate to agree on pricing among other factors.

Consumer to Consumer (C2C)

Consumer to consumer e-commerce websites has gained popularity over the past few years. The websites provide platforms for consumers to buy and sell their products at free will (Pee, 2016). The websites act as an agent to gain the market. The form of transactions seen in the consumer to consumer model is seen in the classifieds websites such as Kijiji. C2C is advantageous models of business since it helps individuals get rid of items that do not wish to sell and also dispose of some items easily.

The C2C business model is utterly self-regulated as consumers post their products and services and wait for willing buyers and sellers. At no point does the consumer interact with the website management. C2C platforms thus provide an opportunity to millions of people who wish to dispose of their goods and services. The platform provides the advantage of mitigating the payment risk by providing a trustworthy payment method (Laudon & Laudon, 2012). The e-commerce platform thus has more advantages to customers in comparison to the management of the website.

E-bay is one of the companies that has experienced massive success due to its adoption of C2C e-commerce since it was found in 1995. The company has been able to grow and stabilize in the market thus representing the importance of understanding individual market niche. Amazon has also participated in both c2c and b2c markets utilizing every opportunity that is available in the market. The c2c platforms have thus provided a marketplace where consumers can meet other consumers for their products and trade (Pee, 2016). In most cases, the platforms earn from fees and commissions levied.

Most Valuable E-commerce Model to Individual Customer

The three categories of e-commerce are considered important in their way since they serve different markets as discussed above. However, only one e-commerce category can be considered to be the most valuable to individual customers. The business to consumer (B2C) model can be considered as highly valuable to consumers all over the world. Consumers can get products that they want from such websites, pay for them and wait for their shipment to the physical address. E-commerce is considered sensitive since products are purchased online. C2C websites thus do not offer all the customer needs regarding product collection which is not the same case with B2C platforms.

In the United States, customers value Amazon more than E-bay due to the ability to browse through numerous new, refurbished and used products offered by different businesses. The model of business to consumer is thus very important to consumers as they get the service and goods they require. The case can be noted in most e-commerce companies established all over the world. Companies such as Souq.com have focused on providing B2C services to clients who are considered exceptional (Mouchawar, 2017). The B2C model thus works well with the current markets around the globe.

Conclusion

The study has identified the three important...