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Categorizing eCommerce Business Models

There are many e-commerce business models, and more are being invented every day. The number of such models is limited only by the human imagination, and our list of different business models is certainly not exhaustive. However, despite the abundance of potential models, it is possible to identify the major generic types (and subtle variations) of business models that have been developed for the ecommerce arena and describe their key features. It is important to realize, however, that there is no one correct way to categorize these business models.

Our approach is to categorize business models according to the different e-commerce sectors-B2C, B2B, C2C, etc.—in which they are utilized. You will note, however, that fundamentally similar business models may appear in more than one sector. For example, the business models of online retailers (often called e-tailers) and e-distributors are quite similar. However, they are distinguished by the market focus of the sector in which they are used. In the case of e-tailers in the B2C sector, the busi-ness model focuses on sales to the individual consumer, while in the case of the e-distributor, the business model focuses on sales to another business.

The type of e-commerce technology involved can also affect the classification of a business model. M-commerce, for instance, refers to e-commerce conducted over wireless networks. The e-tail business model, for instance, can also be used in m-commerce, and while the basic business model may remain fundamentally the same as that used in the B2C sector, it will nonetheless have to be adapted to the spe-cial challenges posed by the m-commerce environment.

Finally, you will also note that some companies use multiple business models. For instance, eBay.com can be considered as a B2C market maker. At the same time, eBay can also be considered as having a C2C business model. If eBay adopts wireless mobile computing, allowing customers to bid on auctions from their telephones or wireless Web appliances, then eBay may also be described as having a B2C m-commerce busi-ness model. We can expect many companies will have closely related B2C, B2B, and m-commerce variations on their basic business model. The purpose will be to leverage investments and assets developed with one business model into a new business model.

The several types of e-commerce in use today are classified based on the nature of the transactions: business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), consumer-to business (C2B), and non-business and government, and organizational (intra-business).


     


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