Debitoor's accounting dictionary

B2C - What is B2C?

B2C means ‘Business-to-consumer’ and refers to the direct sale from a business to a customer (as opposed to a sale to another business)

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Although it may seem like a trendy term, ‘B2C’ is part of common use when discussing types of commerce between a seller and a buyer. While it can technically be used in any situation where a business sells directly to the end customer, it is mostly used in an online context.

Where the term ‘B2C’ came from

This term certainly was considered trendy when it was first introduced, allegedly as early as 1979. Originally it was used in connection with television sales (think the shopping channel or infomercials). It was also applied to direct consumer purchase experiences like eating out or shopping in shopping centres.

The term gained notoriety in the 1990s during the first major growth spurt of online businesses. ‘B2C’ was an important term because business that sold directly to the consumer were an important part of the development of the internet boom. Huge amounts of venture capital funds were siphoned into businesses offering discounted prices directly to consumers in a new sales platform.

The new B2C online businesses were able to target customers online and were often able to provide lower prices for products that could be found in bricks-and-mortar shops because there was no need for price markups for profits.

However, the burst of the dot-com bubble in 2000 hit the B2C businesses hardest. Many weathered the crash by quickly learning to convert their business from B2C to B2B. While many believed that the B2C market would never recover, the continued rapid expansion of the internet has meant the revival of B2C markets.

Examples of B2C businesses

Today, a number of the ‘original’ B2C online businesses are still around. Perhaps the most notable is Amazon. Priceline is another B2C business that survived the bubble burst and both of these businesses have experienced considerable success.

Other companies have capitalised on the success that is still available in the B2C sphere, with newer businesses such as Netflix releasing a service and resulting in incredible profits.

Marketing for B2C

Because the target audience for B2C businesses is the consumer themselves, the marketing strategies for these businesses tend to be focused more on hitting an emotional or personal chord with the potential customer.

This is in contrast to B2B marketing, which focuses more on the utility of the product or service that can be provided and how it can potentially benefit the business on the purchasing end.

Types of B2C business models

Traditionally, there are 5 different business models under B2C:

1. Direct seller B2Cs

This is the most known type of B2C model - it is the traditional online retailer selling products to individuals. While many are based only online, retailers that have physical stores but also offer online shops fall into this category (think major department stores or electronics brands).

2. Online intermediary B2Cs

You’re also likely familiar with these types of online businesses. They act as the middle-man selling products or services provided by other businesses to the end consumer. Examples include travel websites such as Booking.com or Etsy.

3. Advertising-based B2Cs

This type of B2C uses free content to draw in viewers to their site. Their website then features many different adverts that are meant to appeal to visitors and encourage them to click. Examples of this are major media websites or blogs.

4. Community-based B2Cs

As the name of this business model implies, this type of B2C centres around building a community of users and then appealing to the interests of that community by showing adverts from other suppliers. These ads are targeted based on a number of different factors including geographical location and demographics.

5. Fee-based B2Cs

Sites that charge a fee in order for customers to access their product/service fall into this type of B2C model. Sometimes, a limited amount of content is offered free in order to give potential customers a preview of what is available. Sites such as Netflix and The New York Times fall into this category.

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