eCommerce

Pros and Cons of a C2C eCommerce Business Model

Updated  |  6 min read
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Discovering If a C2C eCommerce Solution Is Right for You

Consumer to consumer (C2C) eCommerce has bloomed over the past few years. In the C2C eCommerce business model, buyers and sellers are both considered consumers to the third-party platform owner. The platform is a virtual space for online shopping to take place. Common examples include Amazon Marketplace and eBay. This business model has grown popular among end-users and business owners, due to its distinct advantages. Let’s dive into the reasons behind this C2C eCommerce boom, and the things each party should be aware of when it comes to this online business model.

Clarity's eCommerce platform has been used in the marketplace for over 10 years.

The Rise of the C2C eCommerce Business Model

Consumer-to-consumer, or C2C eCommerce is a relatively new business model. In C2C commerce (eCommerce if transactions occur online), the seller is also a consumer. This is distinct from B2B (business to business) and B2C (business to consumer) models, where the seller is an individual business and might even have a physical store to supplement their online sales.

To illustrate, think about a farmers’ market. Producers gather on a designated day and area to sell their produce. Producers can rent their spots in the area on a weekly or monthly basis, or as a one-time trial. Depending on the region, there might be different rules on the rotation and pricing of available spots, protection from adverse weather, any fees for potential buyers entering the market, or anything else the market-space provider is willing to offer.

This concept translates to an online market space, where sellers must pay the online platform provider for a spot on the platform in order to sell their products or services. In that way, both the seller and the buyer are consumers in the C2C business model.

Though farmers’ markets have been around for hundreds of years as the first example of a C2C model, the C2C eCommerce business model is still considered relatively young. The first—and highly successful—example of C2C eCommerce is eBay, which began more than 25 years ago. EBay is an online marketplace where buyers bid for the best price on items, provided by sellers, by a closing deadline. Today, there are many other C2C eCommerce business model examples, with the list growing every day. International examples include: Amazon, Craigslist, Airbnb, PayPal, Upwork, Etsy, SkillShare, Facebook Marketplace, Uber, and more. Each of these has either a specific target audience or a more general audience for online shopping. Additionally, many smaller platforms may cater for specific items or operate on a national level.

Advantages of C2C eCommerce for Sellers

The C2C eCommerce business model is especially preferred among smaller, individual sellers without an established brand or business entity. Below are the several advantages offered by C2C eCommerce:

  • Increased Profitability – In the C2C eCommerce business model, there are no intermediaries involved. This lowers the cost of the product or service being offered, which increases profitability. C2C sellers do not need to worry about extra costs associated with the rent of a physical store, staff salaries, website hosting, marketing, or use of third parties for product distribution. The C2C eCommerce marketplace facilitates direct communication and transactions between the seller and the buyer, without hidden costs.
  • Increased Customer Base – With a brick and mortar store, the number of visitors and potential customers walking in (physically or electronically) depends on chance, shop proximity or convenience, adequate promotion, marketing, and customer loyalty. However, with a C2C eCommerce marketplace “stall,” the probability of getting visits and transactions is much higher, as visitors go to that platform to look for the specific products and services offered there. In addition, the online aspect of the C2C eCommerce marketplace means that your products and services are accessible to a worldwide audience, thus increasing the number of chances for conversion.
  • Credibility – Oftentimes, sellers who choose to sell their products or services on a C2C platform do not yet have the credibility of a well-known seller or the ability to sustain their own eCommerce platform. Therefore, utilizing space on an existing C2C eCommerce platform will lift the burden of creating and sustaining their own platform, and provide credibility for the seller under the “umbrella” of the C2C platform (depending on the platform’s policies and ability for background checks).

Disadvantages of C2C eCommerce for Sellers

When considering the C2C eCommerce business model, it is important to know the disadvantages as well as the advantages. Let’s now go over the cons of this online shopping business model together, so you can make the best choice for you.

  • Competition – Being in a marketplace where many sellers are providing a similar product or service can be daunting for some sellers or business owners, especially when they must compete with products and services of lower price, better reviews, or higher quality.
  • Payment Issues – Depending on the marketplace platform provider, there may or may not be a guarantee of payment for the transactions made. There have been complaints from C2C eCommerce sellers that customers have scammed them, and depending on the platform’s policy, it might be difficult to dispute and resolve the issue.
  • Platform Fees – Some platform providers might charge sellers (and occasionally buyers) for the use of the platform, on a standard, reoccurring fee, or a profit percentage basis.

Advantages of C2C eCommerce for Buyers

The distinct pros of C2C eCommerce for buyers help ensure a high level of satisfaction with their purchases.

  • Lower Prices – Given that sellers can avoid the costs of intermediaries, the offered products and services can be more affordable for buyers.
  • Abundance of Choice – Having many sellers offering specific products or services gathered in the same virtual space means more options for potential buyers to choose from. Criteria such as quality, price, customization, delivery method, time, regular supply, and so on, can be prioritized to find what’s best for the buyer. Buyers have the ability to find exactly what they are looking for, which boosts satisfaction and the feeling that they are getting their money’s worth.
  • Faster Service – The abundance of choice gathered on one platform and the absence of intermediaries can lead to faster transactions, streamlining the service and saving time.
  • Security – Depending on the policy of the platform, security measures and background checks may be implemented to protect buyers from potential scammers acting as sellers.

Disadvantages of C2C eCommerce for Buyers

Though the advantages of this eCommerce business model often equate to great experiences, there is a notable drawback that buyers should be aware of when engaging in C2C eCommerce.

  • Issues with Sellers – Many platforms do their best to protect their customers (on both sides), but issues may arise with the quality of products, payment handling, delivery, or communication between the parties involved, which can be a burden to buyers.

Discover Your C2C Solution

So, what's next? Is your business looking to start or scale a consumer-to-consumer eCommerce marketplace? Clarity can build an eCommerce platform to help you achieve that. With 15+ years of experience as a company, in addition to the 350+ combined years of experience as individuals, our team has built 1500+ custom websites for every need. Get in touch to find out more about how Clarity can deliver your C2C eCommerce solution.

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FAQ

 

Working with a C2C online business leads to both advantages and disadvantages of e Commerce. Advantages include reduced overhead when compared to a physical store, increased customer base, and improved credibility by working with the marketplace. Disadvantages of such online stores include increased competition, payment issues, and platform fees.

 

There are significant pros and cons of e commerce over shopping at a brick and mortar store. Online stores are often able to offer lower prices, a greater choice of products, and faster service. The primary disadvantage is that buyers could run into a seller on the C2C marketplace platform that isn’t reliable.

 

The three primary eCommerce business models are business-to-business eCommerce (B2B, where a businesses sells directly to other businesses), business-to-consumer (B2C, when a business sells directly to the consumer via an online channel, often an online store or marketplace outlet), and consumer-to-Consumer (C2C, where individuals or small businesses) sell to consumers via online shopping channels such as Amazon Marketplace or eBay).

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Author
 
Written by Autumn Spriggle
Autumn Spriggle is a Content Writer at Clarity Ventures with experience in research and content design. She stays up to date with the latest trends in the eCommerce and software development industries so she can write content to help people like you realize the full potential for their business.

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