Business To Consumers

Business-to-Consumer (B2C)
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.
B2C became immensely popular during the dotcom boom of the late 1990s when
it was mainly used to refer to online retailers who sold products and services to
consumers through the Internet.
As a business model, business-to-consumer differs significantly from

the business-to-business model, which refers to commerce between two or more
businesses.
KEY TAKEAWAYS
 Business-to-consumer refers to the process of businesses selling products

and services directly to consumers, with no middleperson.
 B2C is typically used to refer 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.
Understanding Business-to-Consumer
Business-to-consumer (B2C) is among the most popular and widely known of
sales models. The idea of B2C was first utilized by Michael Aldrich in 1979, who
used television as the primary medium to reach out to consumers.
B2C traditionally referred to mall shopping, eating out at restaurants, pay-per-

view movies, and infomercials. However, the rise of the Internet created a whole
new B2C business channel in the form of e-commerce, or selling goods and
services over the Internet.
Although many B2C companies fell victim to the subsequent dot-com bust as
investor interest in the sector dwindled and venture capital funding dried up, B2C
leaders such as Amazon and Priceline survived the shakeout and have since
seen great success.
Any business that relies on B2C sales must maintain good relations with
their customers to ensure they return. Unlike business-to-business (B2B), whose
marketing campaigns are geared to demonstrate the value of a product or
service, companies that rely on B2C must elicit an emotional response to their
marketing in their customers.
Business-to-Consumer
B2C Storefronts Vs. Internet Retailers
Traditionally, many manufacturers sold their products to retailers with physical
locations. Retailers made profits on the markup they added to the price paid to
the manufacturer. But that changed once the Internet came. New businesses
arose that promised to sell directly to the consumer, thus cutting out the
middleperson—the retailer—and lowering prices. During the bust of the dotcom
boom in the 1990s, businesses fought to secure a web presence. Many retailers
were forced to shutter their doors and went out of business.
Decades after the dotcom revolution, B2C companies with a web presence are
continuing to dominate over their traditional brick-and-mortar competitors.
Companies such as Amazon, Priceline, and eBay are survivors of the early dot
com boom. They have gone on to expand upon their early success to become
industry disruptors.
Online B2C can be broken down into 5 categories: direct sellers, online
intermediaries, advertising-based B2C, community-based, and fee-based.
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. These may include manufacturers or small businesses, or
simply online versions of department stores that sell products from different
manufacturers.
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. Basically, large
volumes of web traffic are used to sell advertising, which sells goods and
services. Media sites like the Huffington Post, a high-traffic site that mixes in
advertising with its native content is one example.
4. Community-based. Sites like Facebook, which builds online communities
based on shared interests, help marketers and advertisers promote their
products directly to consumers. Websites will 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.
B2C Companies and Mobile

Decades after the e-commerce boom, B2C companies are continuing to eye a
growing market: mobile purchasing. With smartphone apps and traffic growing
year-over-year, B2C companies have been shifting attention to mobile users and
capitalizing on this popular technology.
Throughout the early 2010s, B2C companies were rushing to develop mobile
apps, just as they were with websites decades earlier. In short, success in a B2C
model is predicated on continuously evolving with the appetites, opinions, trends,
and the desires of consumers.

Because of the nature of the purchases and relationships between businesses,
sales in the B2B model may take longer than those in the B2C model.
B2C Vs. Business-to-Business (B2B)

As mentioned above, the business-to-consumer model differs from the business-
to-business (B2B) model. While consumers buy products for their personal use,
businesses buy products to use for their companies. Large purchases, such as
capital equipment, generally requires approval from those who head up a
company. This makes a business' purchasing power much more complex than
that of the average consumer.
Unlike the B2C business model, pricing structures tend to be different in the B2B
model. With B2C, consumers often pay the same price for the same products.
However, prices are not necessarily the same. In fact, businesses tend to
negotiate prices and payment terms.
Frequently Asked Questions

What is business to consumer?
After surging in popularity in the 1990s, business to consumer (B2C) increasingly
became a term that referred to companies with consumers as their end users.
This stands in contrast to business to business (B2B), or companies whose
primary clients are other businesses. B2C companies operate on the internet and
sell products to customers online. Amazon, Facebook, and Walmart are some
examples of B2C companies.
What is an example of a business to consumer company?

One example of a major B2C company today is Shopify, which has developed a
platform for small retailers to sell their products and reach a broader audience
online. Before the advent of the internet, however, business to consumer was a
term that was used to describe take out restaurants, or companies in a mall, for
instance. In 1979, Michael Aldrich further utilized this term to attract consumers
through television.
What are the five types of business to consumer models?

Broadly speaking, B2C models will 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.

Business To Consumers

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Business To Consumers

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Business-to-Consumer (B2C)

What Is Business-to-Consumer (B2C)?

As a business model, business-to-consumer differs significantly from

 Business-to-consumer refers to the process of businesses selling products

B2C traditionally referred to mall shopping, eating out at restaurants, pay-per-

2. Online intermediaries. These are liaisons or go-betweens who don’t actually

3. Advertising-based B2C. This model uses free content to get visitors to a

5. Fee-based. Direct-to-consumer sites like Netflix charge a fee so consumers

B2C Companies and Mobile

B2C Vs. Business-to-Business (B2B)

Frequently Asked Questions

What is an example of a business to consumer company?

What are the five types of business to consumer models?

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