UNIT: III Business Models for E-

commerce
What is an E-commerce Business Model?
 It is a business model that lets businesses and consumers
make purchases or sell things online.

 There are six major eCommerce business models:

– Business to Consumer (B2C)
– Business to Business (B2B)
– Business to Government (B2G)
– Business to Business to Consumer (B2B2C)
– Consumer to Consumer (C2C)
– Consumer to Business (C2B)
1. Business to Consumer (B2C)
 Business to consumer (B2C) is when a company
markets its products or services directly to end users.
 It is the most widely known form of commerce. 
 B2C ecommerce is fairly straightforward.

 You complete a B2C transaction every time you purchase

food from a grocery store, eat dinner at a restaurant, watch
a movie at a theater, and get a haircut. You are the end user
of the products and services these companies sell.
 Cont’d… B2C
 There are five different B2C business models
• Direct selling is the most common model. It is when consumers buy
products from online retailers.
• Online intermediaries are online businesses that bring sellers and
consumers together and take a cut of each transaction made.

• In the advertising-based model, information is given away for free and

money is made from advertising on the site.

• Facebook is an example of a community-based site that makes money

from targeting ads to users based on their demographics and location.

• Finally, the fee-based model involves companies that sell information or

entertainment to consumers for a fee, like Netflix or subscription-based
newspapers.
 2. Business to Business (B2B)
 Business to business (B2B) is when a company markets its
products or services directly to other businesses. 
 B2B ecommerce can be broken down into two methodologies,
vertical and horizontal.

 Vertically oriented businesses sell to customers within a specific

industry.
 industry expertise and market depth (vertical)

 With a horizontal approach, you are selling to customers across a

numerous industries.
 wide-spread market coverage and diversification (horizontal).
3. Business to Government (B2G)
 Business to government (B2G) is when a company
markets its products and services directly to a
government agency.
 This agency could be a local, county, state, or
federal agency.

 An example of a local B2G relationship is when a private

engineering company sells its engineering services to a
county government (Regional Government) to develop a
new water and sewer system for the community.
4. Business to Business to Consumer (B2B2C)
 In B2B2C ecommerce, a company sells products to another
company which are then sold to consumers.

 An example of a B2B2C arrangement is when a wholesale

distributor sells merchandise to retail stores that then sell the
merchandise to end users.

 The B2B2C model is comprised of three parts: the first business (the
business of product origin), an intermediary, and the end user.

– For example, a company could partner with another company to

promote its products and services, giving the partner a
commission for each sale.
 5. Consumer to Business (C2B)
 In the C2B ecommerce business model, individuals
sell goods and services directly to companies. We
see this most commonly in websites that allow
individuals (contractors or freelancers) to share
work or services they’re skilled in.

 Often, businesses will put in a request or a bid for

that person’s time and will pay the person through
that platform.
6. Consumer to Consumer (C2C)
 Consumer to consumer, or C2C, is the
business model that facilitates commerce
between private individuals.

 Whether it's for goods or services, this

category of e-commerce connects people to do
business with one another.
 End
Thank you
 Concept of E-procurement
What is E-procurement ?

 also known as supplier exchange) is the business-to-business or business-

to-consumer or business-to-government purchase and sale

of supplies, work, and services through the Internet as well as other

information and networking systems, such as electronic data interchange .

 The e-procurement value chain consists of e-Informing, e-Tendering, e-

Auctioning, vendor management,  purchase order integration, Order Status,

Ship Notice, e-invoicing, e-payment, and contract management.

 Types of E-procurement

E-Tendering
• Electronic tendering ("e-Tendering") is a process for sending and
receiving tenders by electronic means, rather than the old paper-
based method.
• Instead of inserting documents into an envelope and posting them,
participants will now exchange them securely via the Internet.

E-Ordering
• Process of creating and approving purchasing requisition, both
placing purchase orders and receiving goods and services ordered,
while using a software system based on internet technology which
greatly improves the supply chain performance.
Cont’d…
E-Purchasing
• E-Purchasing is used in procurement of goods and services that are
of low value and high volume.
• It electronically simplifies the purchasing process of such goods and
services.
• The process starts from publication of items online by the suppliers,
and continues to the electronic selection, order, reception, and
finishes with payment by the purchasing side.

E-Auctioning
• E-auction is the process of conducting an auction to sell assets,
natural resources or other goods through online competitive bidding.
• Compared to physical auction, electronic auction provides complete
transparency and enables more parties to take part.
Cont’d…

E -Invoicing
• E-Invoicing is any method by which an invoice is
electronically presented to a customer for payment.
• In larger companies, accounts payable departments are
responsible for the invoices to be approved, processed,
and paid.

E-Contract Management
• This type of management consists of management of
payments, contract settlements, contract variations,
performance securities, and auditing and control activities.
Benefits of E- procurement
 The Limitations and Challenges of E-
Procurement
Unfortunately, e-procurement practices have some
limitations and risks such as:
- The total cost (TCO) may be too high.
- It may be subject to hacker attacks.
- It may be difficult to get suppliers to cooperate
electronically.
- The system may be too complex (e.g., when it uses a
traditional EDI)
- It may be difficult to have internal and external integration
- The technology may change frequently.
 End
Thank you