What is B2C Business? Types and Examples

April 16, 2024

Quick Summary

  • The concept of business-to-consumer (B2C) transactions is where businesses sell products or services directly to end consumers.
  • B2C business includes various models such as e-commerce, subscription services, brick-and-mortar retail, direct sales, and online marketplaces.
  • The differences between B2C and B2B business models are focusing on the target audience, sales process, product complexity, and relationship dynamics.
  • Some examples of successful B2C companies include Amazon, Apple, Nike, and Starbucks.

Table of Contents

The B2C business model, in today’s time of online trading and shopping this business model has become a go-to choice for product and service-based businesses. This business model delivers the products or services directly to the customer, without seeking any middleman. But that’s not all to this business type, the B2C market has a lot more to offer to both businesses and customers. As per stats, Indian B2C is set to grow up to 96 billion dollars by 2024.

So, if you’re someone who is looking to enter in business world through this method then this article is for you. Here you’ll learn about B2C business in detail, let’s get started.

What is Business to Consumer (B2C)?

Business to Consumer (B2C), as the name suggests, is usually associated directly with potential consumers. B2C, “Business to Consumer,” refers to the distribution of goods and services directly from business to consumers. It is the simplest yet one of the most highly effective e-commerce forms that have grown tremendously over the last two decades. In simple words, Business-to-consumer (B2C) is a unique type of e-commerce where a business or a company sells products or services directly to the consumers, i.e. end-users of the products.

Related Article: Business to Business: What Is B2B?

Types of B2C Business Models

B2C businesses vary extensively. Most enterprises adopt an amalgamation of profit models incorporating advertising and fee-based approaches. The most common types of B2C models are as follows:

Types of B2C Business Models

1. Direct Sellers

Direct Sellers involve the most common and familiar e-commerce businesses. These are retail sites or stores where consumers buy directly from the seller. Manufacturers and small companies are engaged in direct selling that now introduces their products and services to consumers. Transactions are facilitated through online platforms, and products are typically shipped directly to consumers.

Example: Flipkart is one of India’s largest e-commerce platforms, offering a wide range of products including electronics, clothing, and home appliances. Founded in 2007, Flipkart has become a household name in India’s online retail space.

2. Online Intermediaries

Online Intermediary companies are mediators that combine sellers and buyers and do not own the products. These companies, however, establish a platform for connecting buyers with sellers. These are also classified as “go-between” companies or more precisely “intermediary companies” that usually charge a small percentage of profit behind every sale from the respective vendors. Examples are Etsy, Amazon, eBay, Expedia, and Poshmark et al.

3. Advertising-Oriented

Advertising-oriented or advertising-based companies advertise their products or services on their respective platforms with their tremendous reach. These include traffic-driving strategies like content marketing and supposedly selecting the forum that could be the most effective option for advertising the products or services. Through this platform, the businesses thus ensure that numerous people gain knowledge of their products and services and they click on their advertisements to make a purchase. These platforms attract users with free content or services and then monetize their attention by selling ad space to advertisers.

Examples include Google, YouTube, and Instagram amongst others. Such platforms use their sites to advertise the products and services of other companies.

4. Community-Based

This category utilizes online communities like Facebook, Instagram, LinkedIn, Twitter, and several other online platforms to assist companies in marketing their products directly to consumers. Such community-based models use venues that host individuals having ideas, interests, and opinions along with host-targeted advertisements meant to assist the businesses in promoting and selling the products or services directly to the consumers. They make the best use of online communities fastened around particular interests and data like demographics and geography to connect website users with their targeted advertisements.

5. Fee-Based Business Models

Fee-based B2C companies require users to boast premium or paid subscriptions to permit access to supplementary content. In this way, businesses can have unrestricted access to their content—for example, Spotify, The Wall Street, Hulu, and Netflix.

6. Brick and Mortar Business Models

It comprises a physical location of a business where consumers can directly step into the store, touch, and view the products or services – for instance, restaurants, salons, car rental showrooms, and storefronts. These businesses may also have an online presence, but their primary revenue comes from offline sales.

Example: Big Bazaar is a prominent brick-and-mortar retail chain in India, offering a diverse range of products including groceries, apparel, electronics, and home goods. With numerous outlets across the country, Big Bazaar is known for its wide product selection and competitive pricing.

Also, read: 15+ Future Businesses in India for 2025

B2C vs B2B- Differences

B2C business is quite different from B2B (Business-to-Business). In B2B, products and services get exchanged amongst businesses in contrast to B2C, in which products are exchanged between businesses and consumers. The two models also differ in their marketing campaigns as B2B demonstrates the product value to other services, and B2C campaigns are designed to respond emotionally to customers’ marketing strategies. The wake of technological advancements has altered the way of performing B2C transactions. Consumers can easily buy everything online, from food to apparel to books to games.

Let’s explore the critical differences between B2C and B2B:

1. Individual Buyers (B2C) and User Groups (B2B)

B2B involves a group of businesses or stakeholders attempting to sell products or services. IT staff, managers, product users, and executives are actively involved in it. In contrast to it, B2C sells and markets its product directly to individual buyers.

2. Broad Description (B2C) and Detailed Description (B2B)

B2B formulates detailed information with longer descriptions for the customers. It involves the creation of proposals or providing a quotation to target customers. On the other hand, B2C establishes only short and broad text. For example, no formal proposal is required to sell a pair of shoes.

3. Rational (B2B) and Emotional Sentiments (B2C)

In B2B businesses, a large sum of money is involved while setting the deals. Thus, these are prone to higher risks. Whereas B2C involves emotions that play a drastic role in decision-making processes as B2C customers are quite more spontaneous and even buy unnecessary things that are not immediately required.

4. Single Pricing (B2C) and Multiple Pricing (B2B)

B2B companies offer multiple pricing tiers and discounts based on prescribed quantity and order frequency. Contrary to this, B2C companies offer a single pricing tier for the customers.

5. Personal Use (B2C) and Massive Scale (B2B)

B2B involves marketing strategies to target people who require large quantities of products or services. For instance, a single company is interested in buying multiple mobile phones for its employees. On the other hand, B2C tends to involve individuals who are interested in purchasing for themselves or their families only.

6. Sales Cycle – Longer or Shorter

Business to Business carries a longer sales cycle, meaning they are required to sustain for an extended period. Company to the customer has a shorter sales cycle where the sale is made at the initial point.

7. Customer Relationships- Longer or Shorter

Business to Business aims at establishing a long-term relationship with the customers. It necessitates a longer relationship with the customers to sell their products continuously in the future as well. B2C sales have short customer relationships where customers are not that much loyal in such cases.

8. Higher Acquisition Costs and Lower Acquisition Costs

Business-to-business has a higher acquisition cost as B2B services are generally solid investments in the company’s purchase. B2C involves lower customer acquisition costs as the assets are not that costly.

Pros and Cons of B2C

Pros of B2C (Business to Consumer)

1. Globalization

B2C businesses on a large scale always boast a large target audience. Thus, marketing campaigns and advertisements can influence numerous potential customers with the help of the Internet and various social media channels. Also, the vast and varied market offers B2C companies the benefit of targeting more customers. Small-scale businesses, that are operating from home, can also sell their products to a global audience. It increases the business profit and brand value.

2. Minimized Cost and Expenditure

A website for business operations reduces operating costs as fewer physical resources and staff are involved. B2C models minimize the additional charges concerning the infrastructure, staff, electricity, water supply, food and many others. Such companies can manage the inventory and warehouse without the help of expert managers or staff.

3. Customer Personalization

B2C businesses directly communicate with their customers in a personalized manner as they now reach the consumer sector and target audience while elaborating their products or services to individual consumers. B2C companies directly communicate through emails, text messages, push notifications, or social media platforms. One of the significant benefits is that these businesses can track desired results quickly and scrutinize which marketing strategy and communication method works best to market their product.

Also, they get direct feedback from the consumer that assists in further developing their products, or they improvise their services accordingly. Thus, they boast absolute control over user experience. It establishes better consumer service, enhanced cross-selling, and consumer trust and much more.

4. Customer Data

One can obtain the most valuable data about the customer, such as conversion statistics, emails for marketing automation, business analytics, customer behaviour, demographic features, and psychographics that further reinforce the business and marketing strategies, along with readily valuable insights about the users.

5. Broader Reach

As most people are actively involved with social media, B2C companies can reach their target audience through one screen. It benefits traditional modes like newspapers, brochures, magazines, and billboard hoardings. In addition, an interested customer who sees the advertisement can promptly buy the product by clicking on the link. The entire transaction is completed in just one go.

6. Enhanced Accessibility

One of the significant advantages of employing buyers is to buy any product or service while sitting anywhere and at any time. It diminishes the time barrier, and the businesses function the whole day and night, attracting more customers while increasing brand value.

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Cons Of B2C (Business to Consumer)

When it comes to B2C, one faces severe limitations and challenges, as mentioned below:

1. Increased Competition in the Market

B2C businesses face huge competition in the market. Most B2B companies have already established themselves by operating in every possible service. It has created a big competition for start-ups. To sustain itself, one has to market its brand and product to an extreme level. There is vast competition in pricing as well. Thus, an attractive manner is requisite to influence the target audience.

2. Retention of Customers

Because of the vast competition, BTOC companies must discover essential strategies to retain their customers while differentiating their services from the competitors. Serving as per consumer niche is quite essential for sustainability. B2C companies must invest tremendously in attracting customers and marketing their brands. Robust strategies are necessary to retain the customer, as the selling cost to already existing consumers is relatively lower than the new ones.

3. Low Margin

Another major limitation is that products sold by B2C businesses are cheap. Companies must discover powerful ways to gain lost revenue by concentrating on quantity. However, this increases the risk of missing existing customers due to quality issues that eventually affect the business’s profit.
In such situations, one can offer discounts, but only if there is a need for clearance of old stock. If a company is launching a new product, then there must be an introductory discount. This further motivates or influences the target customer to try the newly launched product.

Success Practices for Your B2C Business

To attain success in B2C business and enhance B2C sales, one must follow some essential practices that would assist in growing your Business. The best practices are as below:

1. E-Commerce Personalization

E-Commerce Personalization is quite vital when it comes to offering an outstanding shopping experience to customers. Few personalization techniques involve recommendations of products based on their form of high-selling product along with complimentary services. Along with this, B2C companies can apply location-specified offers and discounts for online customers.

2. Eye-Catching Product Images

Product images best describe the products while impressing and attracting the customer. Most customers purchase specific products by viewing the image attractiveness. When the product looks dull in the image or imparts a fake look in photographs, it will not impress the purchasers. Thus, B2C companies must ensure that pictures are genuine and high-quality.

3. Detailed and Useful Product Descriptions

A detailed and informative product description works best when it comes to sales. It is vital to have helpful information about the product including name, model, colour, purpose, price, instructions for use, date of manufacturing, date of expiry, exceptional benefits, images, and logo, et al. Online products can be made eye-catching by including reviews, real-time purchase information, testimonials, advertisements, recommendations from celebrities et al.

4. Short and Easy User Journey

While visiting any website, a customer wishes for a smooth buying journey without additional features and advertisements. Thus, one should ensure that their customers can have a smooth journey from the product page until the final payment. Also, when a customer adds a specific product to the cart, ensure that no supplementary offers or promotions distract their journey. One must consider it while making payments or online transactions.

5. Avoid Showing Hidden Costs

Most companies often show additional costs for packaging, shopping, and other taxes on the checkout page. It employs an awful experience for the customers who might have been impressed by the initial prices on your home page. When a customer looks at the final prices involving taxes and additional costs, he abandons the cart while giving bad reviews and a bitter experience. Thus, it is better to include all extra charges in the product pricing only in such circumstances.

6. Free-Shipping or Flat-Rate of Shipping

Nowadays, most B2C companies offer free shipping, which sounds exciting and impressive to customers. In addition, a few companies are cutting down the additional expenses and profits in this highly competitive era to offer benefits to the customer and increase their brand value. This strategy attracts the target audience while imparting a happy user journey. If there is a need to charge shipping rates, b2c companies must include the flat shipping rate on the checkout page.

7. Time of Delivery

The most vital feature that attracts the market involves Fast Delivery. Buyers have different opinions and priorities nowadays. A buyer chooses your product only if there is one-day or two-day delivery. If a company offers early delivery, the buyer agrees to charge an even higher cost for the same product. Thus, associating with delivery partners who provide end-to-end solutions for fulfilment while ensuring faster delivery can enhance your brand value and B2C sales.

8. Influence Customers through Emails and Notifications

As we have already become familiar with the fact that retention and sustainability of customers are the most crucial aspects of any B2C e-commerce business, one must consider valuable strategies to employ. To achieve this, one must influence or impress the buyer through strategic notifications and emails describing current offers, supplementary schemes, benefits, educational content, essential features and many more. Furthermore, B2C companies can share this information through push notifications.

9. Product Page Optimization

For effectual B2C sales, the product pages of your website must boast fast loading speed and engaging content that influences customers. It also must have compelling CTAs ensuring a smooth buyer journey until the end. If advertisements, offers, and useless information mess up your product page, nobody will take an interest in your product. Thus, product page optimization plays an essential role in gaining success.

10. Involve Encouraging Team

Your business acquires success only with the help of supporting team members. To attain the same, one must train their employees accordingly while ensuring they have the complete product knowledge to assist the customer effectively. Team members must have potential solutions to customer queries or issues. A customer support platform can be the best tool for making work more approachable. Moreover, B2C companies must involve help documents to disseminate productive information amongst consumers. It can be in the form of blogs and other help pages. It would eventually minimize the stress on your team members.

B2C Success Examples- Companies

1. Amazon

Digital streaming, cloud computing, artificial intelligence, and e-commerce are Amazon’s areas of expertise. Customers engage in business-to-consumer transactions when they buy things from Amazon. Customers further pay for Amazon’s online service. 

2. Spotify

With its monthly membership, Spotify provides a music streaming service to consumers in the mass market. Millions of songs, podcasts, and the most recent albums are all readily available to consumers. 

3. H&M

H&M is a global B2C fast fashion company that sells trendy clothing, things for the home, and accessories directly to consumers rather than other companies. 

4. Netflix

Netflix is a well-known internet streaming service that caters to a wide audience of users. When consumers pay monthly subscription fees, they get access to a variety of films, documentaries, and television services. Also, Netflix creates original material. Netflix engages in a B2C transaction by providing viewers with self-produced content. 

5. Starbucks

Starbucks is a business-to-consumer (B2C) corporation because it predominantly sells coffee, drinks, and food items to lone customers in its locations as opposed to other companies or organisations. 

B2C- Beginning of Future Business

B2C business is the future of business scenario, it just depends on how different businesses take advantage of this model. And if you’re someone who is thinking about diving deep into business following this method then do dig deep and know everything you can about B2C business. Hope this article also helped you get to know B2C much closer, all the best for your future endeavours.

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Frequently Asked Questions

What is an example of a Business-to-Consumer Company?

As the name suggests the Business Consumer company deals directly with the customers. Currently, Amazon and Shopify are playing a significant role as B2C players. Companies like Shopify and Amazon have established a broader audience online. When there was no Internet, Business to Consumer term suits for companies in malls, restaurants, and showrooms et al.

What Are the 5 Types of Business-to-Consumer Models?

The primary five types of Business-to-Consumer Models include
1. Direct Sellers
2. Online Intermediaries
3. Advertising-based B2C
4. Community-based
5. Fee-Based

What are B2C and B2B?

B2C refers to Business to Consumer that involves a direct transaction between buyers and sellers. In contrast, B2B refers to Business to Business that involves transactions between one business and another. B2B consists of businesses or stakeholders attempting to sell products or services. IT staff, managers, product users, and executives are actively involved. In contrast to it, B2C sells and markets its product directly to the individual buyer.

Is Amazon a B2B or B2C?

Amazon falls under both B2B and B2C categories as it deals with small businesses for their product supply and direct online customers.

What are B2C and B2B? Give Examples.

In B2B (Business-to-Business), products and services are exchanged amongst businesses in contrast to B2C, in which products are exchanged between businesses and consumers. An example of a B2B company is a Marble manufacturing company that sells marble to other companies. An example of a B2C company is Shopify, which deals directly with customers.

What are C2B and C2C?

1. C2C: Consumer-to-Consumer – Consumer to Consumer website serves as a mediator amongst the clients and provides an opportunity to sell and buy products directly. Through C2C, consumers can sell their cars and rent a room. Example: OLX, Airbnb.
2. C2B: Consumer to Business – These are not very popular in contrast to other business models. In this, customers offer products and services to companies. Example: Surveyscout.

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