What is B2C and how it works.
What is B2C?
Business-to-Consumer or better known as B2C is a model of retail where materials and products from a business move directly to the customer who has purchased the product for personal use. B2B and B2C (Business-to-Business and Business-to-Consumer) are frequently confused over because of their similarities in function. B2B and B2C are also compared often because of how B2C is starting to become more of a viable option than B2B. For context, B2B is defined as the exchange of goods and services between companies and businesses as opposed to B2C meaning of businesses to customers.
B2C definition and the term apply to any transaction of business where the customer receives the goods or services they purchased directly. B2C examples are retail stores, doctor’s offices, restaurants, and many more. It is common for these businesses that utilize the B2C retail model to take advantage of e-commerce platforms that use the internet to connect their goods and services with customers.
While B2C may be considered to be applied in any type of direct transaction between a business and the consumer, it has become more connected with e-commerce and online selling. It began in the late 1990s and picked up popularity in 1998 when North American e-commerce giant, Amazon, surpassed more than a billion dollars in sales for the first time in history. As a result, your typical “brick-and-mortar” businesses have seen struggle against the competition with these online retailers as online retailers offer ease and convenience of shopping, often enabling consumers to purchase the products they want with just a single tap. B2C and online retailer Amazon has seen even more exposure and profit during the COVID-19 pandemic, effectively doubling their profits as consumers are forced to stay at home and get their desired products online instead.
Advantages of Online Business-to-Consumer Retail Model (B2C)
With how online retail stores are taking over the world by storm, B2C definition has become more inclined with it too. Here are some of the benefits that B2C can give you:
- International/Global Reach
Perhaps the most important aspect of online B2C is how your reach is potentially unlimited. Of course, it’s still up to you if you want to serve your customers all around the globe since shipping and packaging will also cost you. But it’s important to note that almost, if not all, online e-commerce stores offer their services to consumers all over the world. We highly recommend that you try this out! You have the choice to charge consumers their orders’ shipping fee anyway, so if you’re scared or find global delivery too daunting, then now is the time to not be. The availability to sell any of your products and services to anyone anywhere in the globe will make sure your success in the e-commerce scene is inevitable. This is also evident with the likes of Amazon, eBay, and Alibaba who saw exponential growth over the past decade because of their ability to deliver packages to all 195 countries.
- Abundance of data to profile consumers
Being an online e-commerce retailer also gives you the ability to use data of consumers like their demographic, location, previously viewed ads, etc. And utilize them to profile and keep tabs on what their next move on your platform may be. You can create AI algorithms that can predict suggestions of what they may want as their next purchase and send them as a notification on their mobile phones. You may also use advanced analytics tools like Google Analytics to learn more about your avid buyers. This information is a big help with building a complete profile of customers and will be your key to lure them to their next big purchase.
- Less physical overheads and employees to manage
Another benefit of being an online B2C retailer is that you are also able to reduce physical overhead and responsibility. Fewer employees mean less money to dish out for their salary, and fewer people to manage. The B2C model has changed the landscape of selling products as online retailers can manage the task with only a few partners. Of course, as your business grows bigger you will eventually need more people. But if you are just starting from scratch then one or two people are most likely enough for the job. Even traditional brick-and-mortar retailers like Walmart have already started their e-commerce stores, thanks to the power of the internet.
- Advertising is made easier and is cost-effective
We’ve all been in that time where there is that one ad that gets repeatedly played on our gadgets, so much so that it stuck in our head by now. Thanks to e-commerce retailers, their advertisements are not only on televisions or billboards but are now played on social media platforms like Facebook and YouTube too. Advertising as an e-commerce retailer is much easier since the platform you serve your customers in and the platform they (the customers) use for social media and entertainment is combined to one powerful device: the smartphone. With the recent but exponential growth of smartphone owners over the past years, they have become the target of advertisers and B2C e-commerce retailers alike. While TV ads are still a thing, they are not as cost-effective as online advertising. TV ads only appear a preset amount of time during the day, while online advertising can appear on customers’ devices anytime and anywhere.
- Everything else is made easier and is cheaper
As an e-commerce B2C retailer, everything is just made easier and more convenient for your business. Need to build a good-looking website to attract consumers? There are thousands of that online. Need a blog or forum to build a community that will be loyal to your product and business? Easy peasy. Need to advertise your latest product? No need to pay hundreds of thousands, if not millions, just to get your product on consumers’ television screens. The advent of the internet and technology has really created wonder for not only consumers but also business owners themselves. It has made everyone’s business and lives easier. In most cases, both the B2C retailer and the consumer do not have to leave their seats to get a product shipped door-to-door. E-commerce, the internet, and social media have all been big factors in forming the B2C definition we know today.
Business-to-Consumer (B2C) Dropshipping
Now that we have answered what is B2C, let’s discuss one of its more lucrative B2C business model - Dropshipping. Dropshipping has seen recent popularity due to services like Shopify where it has been proven successful and profitable. With dropshipping, you run an e-commerce B2C store with no holding in your inventory. You only order materials for your products as customers come in with their orders. There is no need to worry about overstocking or being out of stock. There is also no need to stress about packaging, shipping, and storage as all of these responsibilities will be held by your supplier who will ship the products straight to your avid customers.
B2C dropshipping is an excellent business model for those who are starting out and looking to make big profits and scale accordingly in the foreseeable future. With consumers coming from anywhere around the globe, the potential of profit with dropshipping is unlimited and the only responsibility that you as a business owner will hold is to be consistent with your ways.
Best methods and strategies for B2C Marketing
As we have mentioned earlier, marketing and advertising are also made easier as a B2C online retailer. With the use of extensive market research, you, as a potential B2C retailer, will have the capability to craft effective advertising and messaging to lure consumers to your online store. The first step is to know who your customers are going to be. If you are targeting women in their 30s, then maybe they’ll appreciate a bunch of candles. If your target buyers are instead teenagers (Gen-Z), then streetwear like hoodies and crop tops may be your target product. The key to knowing these data is to look over past analytics and what those demographics have in their wishlists. Get to know trends, research what’s in and what’s not. Dedicating time and energy to discovering the wants of consumers is the key to success for your B2C business. Here are more B2C examples of marketing strategies:
- Affiliate marketing
- Business-to-Consumer (B2C) content marketing
- Creative contests
- Email marketing
- Big giveaways and freebies
- Influencer marketing (often found on Instagram and TikTok)
- Loyalty and reward programs
- Mobile-first marketing
- Paid search advertising
- SEO optimization (website building)
- Social media marketing and advertising
Those are just some of the B2C examples regarding marketing strategies to help your business grow and expand. There is more to know and research about B2C, and most business practices may also apply, like building a good brand image and starting a solid foundation for your business to thrive on. We hope that you have understood and will put the B2C definition to good use for your business.
We wish you good luck with your business ventures!