Updated for 2023: C2C Meaning and Marketplace Tips

What Is C2C eCommerce? A Marketplace

C2C, meaning consumer-to-consumer commerce, is a business model often defined as one consumer selling goods or services to another consumer. When done online, C2C becomes a type of eCommerce. This C2C sale is often facilitated by a third party that takes care of the transaction details for a commission for bringing the parties—direct sellers and potential customers—together while offering quality control that is acceptable to both.

C2C business examples include eBay, Amazon Marketplace, and Etsy, which all work as online intermediaries. While one person might technically be the seller in such a situation, it's considered consumer-to-consumer business model (and known by some as the customer-to-customer business model) because that seller isn't a traditional business.

 

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The purpose of business strategy and accompanying eCommerce platform is to enable one party to sell directly to potential buyers without spending a considerable amount of money building and maintaining an online storefront. This allows the seller to keep more of their profits because they aren't expending the capital to create infrastructure associated with a traditional business. Of all business models, C2C most closely resembles a marketplace, where a business can be started with minimal costs.

The buyer may also get more competitive prices if sellers on the same C2C platform compete. The most common term for these types of eCommerce platforms is “marketplace.” The idea of a marketplace mirrors real-world examples like flea markets, where a building owner will offer booths to sellers in exchange for a percentage of the profits.

Clarity's own online marketplace platform creates these marketplaces for clients who want to take full advantage of C2C opportunities. We can build them from the ground up or combine them with other business models, such as a single online store, multi-store (i.e., many franchises connected to a single product database), global multi-currency market, global auction platform, customer-to-business eCommerce, and much more.

C2C eCommerce Examples

As you'll see, the C2C business model provides a way to sell products via online auctions or classified advertisements, offering a platform and facilitating credit card transactions. But there are other ways to create a C2C online environment.

• EBay is an excellent example where consumers sell items to other consumers online, starting as a true customer-to-customer environment. It was the first customer-to-customer auction site on the web, even though Buy It Now listings currently eclipse those of timed auctions. EBay makes money by charging sellers fees for the privilege of connecting them to potential buyers, so it works as both online auctions and classified advertisements C2C platforms.
• Buyers have multiple options for paying such as credit card, PayPal, or bank debits that buyers and sellers can link to a bank account. This ability to accept a variety of payment options is one reason sellers choose eBay over other sites. The seller then utilizes eBay's shipping software to create labels and then ships using one of the three major package carriers.
• Craigslist takes a much more altruistic approach. In most cases, it works as a free marketplace for consumers to connect with other consumers at the local level via a third-party business. Craigslist charges to post job ads to cover its expenses, but its primary purpose is to create a free C2C eCommerce marketplace.
• Amazon offers the largest marketplace on the web. Buyers pay via credit card transactions or PayPal, and sellers receive payments facilitated by Amazon to their own bank account or PayPal account. Amazon charges one of the highest rates of any C2C site on the web, but sellers continue to use it because of Amazon's reach and promotional features.

The Advantages of C2C for the Marketplace Owner

C2C eCommerce websites are a specialized type of eCommerce platform with several advantages over the traditional B2C marketplace eCommerce models. A C2C business:

• Needs no inventory – Since a C2C platform is just the intermediary taking a cut of the C2C transaction, inventory is a non-issue. This avoids tying up capital in inventory and eliminates the need for storage and shipping facilities. It also does away with shipping costs associated with a business-to-business business model. (Get a better B2B eCommerce definition here.) Just charge a listing and/or final value fee without the risk of having inventory like when they sell products on brick-and-mortar stores.
• Needs fewer staff – A business without inventory needs no packers, shippers, or drivers.
• Creates sellers out of buyers – Buyers who become familiar with a website as a buying platform may recognize it as a legitimate place to become a seller. This is when it becomes a true customer-to-customer experience, where consumers sell products to other customers when once they were simply the buyer.
• Gets to choose their level of involvement – User agreements dictate just how involved a C2C platform is involved with the customer-to-customer business transaction. For example, Kickstarter's user agreement states that it cannot be held responsible for the contract between the creator and their backers.
• Isn’t responsible for forgeries – Tiffany and Co. took eBay to court, claiming that eBay profited from forgeries of their high-end merchandise. Courts decided that C2C sites like eBay are not legally responsible for forgeries sold on their site.

Pros and Cons of C2C for Buyers and Sellers

Now it's time to take a look at C2C eCommerce's pros and cons for the users of the platform.

Advantages for Sellers

C2C platforms give sellers the ability to list an item for sale without additional advertising, marketing costs, or legwork. The platform owner takes care of things like quality control and promotional features.

A seller is also able to take advantage of the marketplace's web presence to put them at the top of many search engine results. Not only can this type of eCommerce help sellers reach a larger audience than they could independently, but they can do it faster as well.

Sellers also benefit because they can change their level of involvement from day to day, where a traditional business would keep them busy day in and day out. In other words, C2C creates an excellent opportunity for “side hustles,” much like running ongoing garage sales in an online environment. 

Advantages for Buyers

Buyers also benefit from C2C websites. Because the seller controls the pricing and can avoid the overhead costs associated with traditional retail companies, buyers can take advantage of this lower price that a retail company might not provide. They also get the promise of quality control that you impose on the sellers.

C2C commerce also 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.

Finding the Right C2C Platform

The most challenging thing about customer-to-customer eCommerce is finding a platform that can handle all the functionality of a robust marketplace yet not cost millions of dollars to purchase and take years to set up. Clarity eCommerce offers such a platform, one that costs a fraction of what most global marketplaces cost.

It can also be set up in weeks or months instead of the years you might spend waiting on other C2C software platforms, all while handling millions of SKUs and tens of thousands of buyers and sellers.

It allows sellers to set up and brand their stores, upload and customize their pricing for both products and services, report on sales, track shipments, and much more. If needed, our platform can provide a multilingual, multi-currency model as well.

What is C2C doing for our clients? Clarity created goAfrica.com, a marketplace similar to Alibaba but serving 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.

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Clarity can help you face these disadvantages and find the best solutions possible. Tell us about the roadblocks in your C2C business model, and we'll get you on the right track to success.

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A Robust C2C Business Model

A single person can create a basic storefront for their traditional small business in a matter of hours with simple website-building software. This just isn't an option when building a custom customer-to-customer business platform.

Off-the-shelf software and cheap websites simply can't handle the traffic, the customer interface, and the millions of SKUs associated with C2C needs.

Clarity is ready to build your C2C platform to perfectly fit your business needs. We've built over 1,500 custom sites for companies across the country, providing robust security and top-tier interaction to help you realize your C2C needs. Our experience building other customer-to-customer software has also shown us what works—and what doesn't work—in C2C business plans. Let us know what you want, and we'll make it happen.

Integrated C2C Payment Processing

The ability to process payments has scared away more than one person who had a good idea for a business. They might be experts in their field but still be intimidated by the options and complexities of accepting payments, especially when there is an international element involved and no payment guarantees.

If your only familiarity with online payment systems is with the Cash App, PayPal, or Venmo, Clarity can help you choose a much better payment processing option for your C2C platform to facilitate transactions. Best of all, these payment options are seamlessly integrated into the C2C software itself so that you can focus on growing the business. You'll be able to handle credit card transactions, ACH transactions, and any other payment options you choose.

Don't worry about security or payment guarantees when it comes to online payments. Clarity only uses payment processing programs that utilize the highest level of payment security so that you, your buyers, and your sellers feel confident using your platform. The best security builds trust in your customers so that they keep coming back.

Want to know just how secure we can make your C2C platform? Let us show you in a free demo.

Capturing Niche Markets with C2C

Many people wonder why they should consider C2C commerce when certain companies dominate the market. Large companies often run into the problem of spreading themselves thin as they get too big. eBay might facilitate selling everything, but they are an expert on nothing. Similarly, Etsy started as a site for artists to sell handmade items; sellers now use it to sell mass-produced trinkets and “vintage” tube televisions. This dilutes the brand and presents an opportunity for those seeking to enter the C2C market.

C2C commerce opens the door for anyone wanting to be the go-to site that specializes in a particular interest or industry. It doesn't matter whether it's industrial shelving or comic books, boats, or camera equipment. You will run into competition, but you can dominate if you do it better than anyone else. Make the site more attractive, improve the checkout feature, and create a community. In other words, make your site so much more inviting that you become the default C2C facilitator for a particular industry or interest.