Understanding the Business-to-Consumer (B2C) Model
How It Differs From B2B
B2C is an acronym for "business-to-consumer." A B2C business is one that sells products or services directly to the consumer.
When the Internet our homes in the mid-1990s, the world of small business changed forever. For the first time, the ability of small businesses to market directly to consumers in a robust way became possible. Although there are services that are set up to provide direct-to-consumer services, such as eBay for selling goods or Amazon, for selling everything else, small business owners were given the opportunity to can create their own storefronts via e-commerce.
With the ability to sell directly to consumers, the B2C model, in essence, got rid of the middleman and, often times, eliminates the need for eBay, Amazon, and others entirely.
The B2C Challenge
The challenge of the business-to-consumer model is that businesses need to maintain a steady sales steam to stay viable. When the economy gets tough, consumers may make changes in their spending, and that can affect a B2C business. While a cutback on consumer spending can also affect the B2B model (because businesses often require goods and services to stay in business), the impact is greater when it comes to a B2C business. For example, businesses always need marketing, and therefore companies that provide marketing services to a large client roster have a better chance of survival.
That said, targeting the right group of consumers is a practical way to build a business with a steady sales stream. For example, providing high-end or gourmet products targeted to the affluent community is recession-proof. Health and wellness is an area that always does well.
Examples of the B2C Model
B2C businesses include, but are not limited to, the following:
- A gourmet pet foods business
- A home staging business. It can be a B2B business as well if the home stager is hired by a real estate agent.
- A pet sitting business
- eBay selling
- Online storefront. It can include a multitude of products such as jewelry, books, home decor items, clothing, or anything used by individuals in their personal lives.
How Is B2C Different From B2B?
A B2B business is one that offers products or services directly to other businesses. The business can be the end buyer, such as when a company hires a copywriter (the copywriter is the B2B business), or it can be a source of the business. For example, drop shippers provide products to other companies who then sell them to the end user. The drop shipper is a B2B company selling their goods to B2C businesses.
B2B businesses include, but are not limited to, the following:
- A virtual assistant business providing support services to entrepreneurs.
- A direct mail marketing service that provides mail marketing services to other business.
Some businesses may operate as both B2C and B2B businesses. For example, a daycare business may be open to the public but may also provide special arrangements to care for the children of employees of a local business as a group. Or office stores, such as Staples, which offers supplies for both businesses and individuals (such as students).