Pros and Cons of a C2C eCommerce Business Model

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The C2C Business Model: Advantages and Disadvantages of a C2C eCommerce

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 we are speaking of is the virtual space for the commerce to take place, just like eBay or Amazon. Why did this business model grow so popular among both end-users and business owners? Which are the distinct advantages of C2C eCommerce that make it the preferred option for both sellers and buyers? Is there anything that each party should be aware of when it comes to this business model? This article lists the main reasons behind the C2C eCommerce boom, and also sheds light to potential disadvantages.

Clarity's eCommerce Marketplace platform has been used in such marketplaces for more than 10 years.
What does the C2C eCommerce Business Model Stand For?

The Rise of the C2C Business Model

As briefly explained already, C2C stands for “consumer to consumer”, or “customer to customer”, and it is a relatively new business model, different to the well-established B2B (business to business) and B2C (business to customer) models. Whereas in the B2B and B2C cases commerce (or eCommerce if transactions occur through online channels) the seller party is an individual, stand-alone business, in the C2C case the seller is simultaneously a consumer. To illustrate that, think about a farmers’ market. Producers are gathered on a designated day, at a designated area, to sell their produce. Producers can “rent” their spots from the council (or designated manager of the market area), on a weekly or monthly basis, or as a one-off trial. Depending the city, state, or country, there might be different rules on space pricing, rotation of sellers on the available spots, protection of producers and produce from adverse weather, a small fee for potential buyers entering the market, or anything else that the market-space provider is willing to offer. Now try to visualize this concept on an online market space, where sellers are not only related to your “five-a-day” products. This is the idea of C2C eCommerce business model, where both sellers and buyers are customers of someone else.

Farmers’ markets might have been of the first C2C examples around hundreds of years ago, but the C2C eCommerce business model is still considered relatively young. The first –and very successful– example of C2C eCommerce, almost 25 years ago, was eBay, an online marketplace where buyers would bid for the best price on items provided by sellers, by a closing deadline. Today, there are numerous other C2C eCommerce business model examples, with the list growing every day. Some international examples offering products and services for a general or more specific audience are Amazon, Craigslist, Airbnb, PayPal, Upwork, Etsy, SkillShare, Facebook Marketplace, and Uber. There are many other smaller platforms, operating on a national level, or catering for very specific items.

An Absolute Business Boon

Advantages C2C eCommerce for Sellers

There seems to be a preference towards the C2C eCommerce business model, especially among smaller, individual sellers without an established brand or business entity. There are several advantages C2C eCommerce is offering for those who choose to sell their goods and services through such a platform, as elaborated below.

  • Increased Profitability: The main idea behind the C2C eCommerce business model is that there are no middlemen involved, which can lower the cost of the offered product or service, and increase profitability. C2C sellers do not need to account for extra costs such as rent, staff salaries, website hosting, marketing, 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: When having a physical or online shop, the number of visitors and potential customers walking in (physically or electronically) depends on chances, shop proximity, loyal customers, adequate promotion and marketing. When having a C2C eCommerce marketplace “stall”, the chances of visits and potential transactions are much higher, as visitors of the specific platform are looking for specific products and services. In addition, the online aspect of the C2C eCommerce means that your products and services are visible by a worldwide audience, thus increasing the chances for conversion.
  • Credibility and “face”: In many occasions sellers who choose to sell their products or services on a C2C platform are individuals who do not have the credibility of a well-known seller, or the ability to sustain their own eCommerce platform. In these cases, having the “umbrella” of a C2C platform can be helpful, as –depending on the platform’s policies and ability for background checks– it can provide some sort of credibility.
The Pros Out-Weigh The Cons

Disadvantages C2C eCommerce for Sellers

C2C eCommerce advantages might be very tempting for sellers, but there are a few disadvantages of that business model as well.

  • Competition: Being on a marketplace where many sellers are providing a similar product or service can be daunting for some business-owners, especially when they have to compete with products and services of lower price, better reviews, or higher quality.
  • Payment Issues: Depending on the marketplace platform provider, there might be a payment guarantee for the transactions being made, or not. There have been complaints from C2C eCommerce sellers that customers 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.
C2C ECOMMERCE PROS AND CONS FOR BUYERS

Advantages and Disadvantages of C2C eCommerce for Buyers

Having explored C2C eCommerce from the sellers’ point of view, this section will provide a C2C eCommerce comparison of advantages and disadvantages from the buyers’ side.

  • Lower Prices: Given that sellers can avoid the added costs of middlemen, rent, staff, marketing, product and service prices can be more affordable.
  • Abundance of Choice: Having a number of sellers of a specific product or service gathered under the same virtual space means that there are more options for potential buyers, based on criteria such as quality, price, customization, delivery method and time, regular supply and so on. The almost infinity of options (especially in some categories of products and services) also helps with the satisfaction of “best value for money” feeling, where the buyer feels they grabbed the best deal.
  • Faster Service: The abundance of choice gathered on one platform and the absence of middlemen can lead to faster transactions, streamlining the service and saving time.
  • Feel of Security: Depending on the policy of the platform, there might be some implemented security measures and background checks, protecting buyers from sellers who might be scammers.

Despite the notable C2C eCommerce advantages, there are some issues that buyers should be aware of when engaging with C2C eCommerce.

  • Issues with Sellers: Many platforms try to protect their customers (of both sides), but inevitably there might be issues with the quality of products, payment handling, delivery, or communication between the parties involved, that can be a burden to buyers.
Global Marketplace Experts

Clarity Can Help

Well, now that we've answered that question, what's next? Is your business looking for business suggestions 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 14 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.

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