C2C business model is the easiest way to buy and sell products or services online from anywhere. One needs to sign up on an e-commerce website, form the listing of their products and start selling. Various websites these days are following C2C business models that allow their customers to sell or buy the products like apparels, cars and even properties for residence or rent. Some of these sales platforms take a small cut as listing fees from the sellers and maintaining the transaction details.
A typical C2C business model is composed of individual sellers, buyers, business websites, various payment modes, and an effective delivery system. Simply one customer can sell their assets by adding the information of the products on an e-commerce website, and another customer may decide to buy those products by viewing the advertisement online. The diagram given depicts the overall tradeoff between two consumers. Suppose one consumer wants to sell a product online without going to an intermediate business service. They can list that product on an e-commerce website like eBay or Craigslist, and another customer wants to buy that product by looking at the advertisement. Both consumers can then directly communicate with each other using the marketplace platform. Buyers can directly pay money via payment modes offered by e-commerce website or seller, and then, the product is delivered. This cuts down the commission of intermediate parties like wholesalers and retailers, which results in a high profit margin for sellers.
C2C Market Growth
E-commerce websites like Etsy, eBay, Olx and Craigslist provide a common platform to sell, buy or trade products online. Some of these platforms also offer assistance tools for business development, managing orders, and listing products or services. Apart from direct selling, eBay provides an auction facility for some assets and conducts online bidding. These Consumer-to-Consumer websites make money by charging a listing fee or referral commission from sellers. They can also charge for additional advertisement features and providing quality payment options.
C2C market growth is increasing gradually because of rising consumer’s interest due to cost efficiency. As the additional cost of intermediate wholesalers and retailers is declining, the profit margin increases. C2C e-commerce platforms are also suitable because there is no need to visit a physical store or shop. This advantage reduces extra costs, unlike traditional business storefronts.
Online selling at a good margin and buying products at competitive prices emerges as a cost-effective business model. Some of the benefits of C2C e-commerce are as follows:
Cost-Reduction: The main advantage of direct selling is the reduction of extra overheads for sellers such as store rent, maintenance charges or salaries of workers.
Profit Growth: Due to the absence of retailers and wholesalers, the additional cost for a seller reduces, leading to a high-profit margin.
Wide Range of Clients: The major benefit of selling via the marketplace is a seller can reach national and international consumers from anywhere. One can cover a wide range of market for growing their business worldwide.
Competitive Price: Buyers can deal with different sellers and can purchase the products at a reduced price. They can get the best deals by directly contacting top sellers without intermediate parties.
Easy Transactions: E-commerce websites acts as intermediaries for providing effective transaction modes online using debit/credit cards or PayPal. These websites provide secure, effortless and less time-consuming payment methods.
Shortcomings of C2C Model
Competition, payment issues, and platform fees are some of the major disadvantages of the C2C E-commerce sector.
Online Frauds: Both vendors and buyers may encounter frauds from any side. For example, some deceits may mislead customers using a fake identity and depredate money online.
Lack of Quality: One of the major drawbacks is a deficiency of quality control measures. As a result, one cannot predict that the money paid for a product is worth paying or not. Sometimes, no refunds or warranty are given by the vendors.
No Payment Assurance: Due to a lack of strict protocols, sometimes buyers refuse to pay for the products, which may cause loss for sellers.
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