The C2C Business Model: Cutting Out the Middleman
What is consumer-to-consumer eCommerce and how does it work?
C2C or Consumer-to-consumer eCommerce is one consumer selling goods or services to another consumer online, similar to how eBay, Etsy or Craigslist works. This sale is usually facilitated by a third-party site that helps take care of the details of the transaction, usually referred to as a marketplace. Clarity's eCommerce Marketplace platform has been used in such marketplaces for nearly 10 years. The purpose of consumer-to-consumer eCommerce is to enable consumers to sell directly to other consumers without having to go through a middleman, or spending a huge amount of money building and maintaining their own online storefront. This allows the seller to keep more of their profits and the buyer to potentially purchase the goods at a better, more competitive price. Many times people call these types of eCommerce sites, marketplaces. Clarity's own C2C eCommerce platform can be used as a marketplace or in another model, such as a single online store, multi-store (i.e. many franchises connected to a single product database), multilingual-multi-currency global marketplace and much more. Read on to see how you can benefit from setting up your own consumer-to-consumer eCommerce marketplace.
Examples of C2C eCommerce Sites
One of the best examples of a site where consumers can sell online to other consumers is eBay. eBay is the largest auction site on the web. It makes money by charging a small flat fee or a commission on each sale, often called a commission or transaction fee. The buyer pays the seller through a payment processor, and then the seller is in charge of shipping the item to the buyer. Another example is Craigslist. Craigslist is basically a website of online classified ads. Craigslist actually just helps people find buyers for the products they are trying to sell, or sellers of the items they are looking to buy. Then it is up to the consumers to meet and make the transaction happen on their own. Amazon also allows consumers to list items to sell to other consumers. Buyers pay with PayPal or credit card, and sellers are reimbursed through bank account deposits or PayPal. Amazon keeps a small percentage for helping facilitate the sale, although the percentage is much higher than almost every other marketplace, especially for businesses, however, their popularity and reach is second to none. According to Forbes, although C2C eCommerce sites may have more competition, they usually have a higher margin due to the lack of retail or marketing costs needed to promote your products.
Disadvantages of C2C eCommerce
One of the biggest challenges of C2C eCommerce can be handling the payments. If the seller doesn’t get paid for the item that they sold and shipped, it can be hard to get the item back or make the buyer pay. Likewise, if the buyer doesn’t like the quality of the item, the seller isn’t always required to offer a refund like a typical brick and mortar store would. Using third-party sites like eBay and Amazon usually help solve some of these issues by forcing users of the platform to accept their polices, which set the tone for how they expect Sellers to conduct business in the marketplace, or they will not be allowed to continue to do business on the platform. Amazon deducts the money from the buyer right away to make sure there is a payment for the item. Amazon also has return guidelines for sellers to follow in case buyers do have a justified reason for returning an item. One payment platform Clarity's used before uses an escrow model (Payoneer), where a portion of the purchase price is deducted and paid right away to the seller, with the balance held in an escrow account, and once the item has been shipped and the buyer accepts delivery, the rest of the payment is released. This adds some protection to both sides, especially when dealing with overseas payments and shipments.
Advantages of Clarity's C2C eCommerce
One of the greatest advantages of C2C eCommerce is that it allows the seller to keep most of their profits, reaching a larger audience more quickly than they could on their own, while enabling the buyer to get a better price than if they would have bought the item from a business, since the seller controls the pricing and usually has less overhead than most retail businesses. Convenience is high for sellers, who can simply list an item and wait for someone to buy it without any additional advertising, marketing costs or legwork. C2C eCommerce offers shopping-from-home comfort for buyers. When done well, a well-designed C2C marketplace is a win-win for both buyers and sellers alike. The most difficult thing about C2C eCommerce, is finding a platform that can handle all of the functionality of a robust marketplace, yet not cost millions of dollars to purchase and take years to set up.
Clarity eCommerce is such a platform. It costs a fraction of what most global marketplaces cost and can be set up in weeks and months, instead of years, and still handle millions of SKUs, with tens of thousands of buyers and sellers. And if needed, comes in a multilingual, multicurrency model as well. It allows sellers to set up and brand their own stores, upload and customize their own pricing for both products and services, report on sales, track shipments, and much more. One such Clarity marketplace is goAfrica.com, similar to Alibaba.com, but for Africa, within the first few months of being set up, it had thousands of sellers and hundreds of thousands of SKUs, all being set up by the Sellers themselves.
Clarity Can Help
Is your business looking to help facilitate a consumer-to-consumer eCommerce marketplace? Clarity can easily design and build you a marketplace to help accomplish that. With more than 13 years and 350+ combined years of experience, our team has built more than 1,300 custom websites for every need. To find out more about how Clarity can deliver your marketplace, request a free quote.