E-Business Models

What is E-Business Models?

The E-Business model, like any business model, describes how a company makes a plan to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.

An e-commerce business model aims to use and leverage the unique qualities of the Internet, the Web, and the mobile platform.

To put it simply, the business model is the method of doing business by which a company can sustain itself — that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain.

Types of E-Business models

These are the following types of e-business models which are given below:


B2B stands for business-to-business. It consists of the largest form of E-Commerce. This model defines that buyer and seller are two different entities. It is similar to a manufacturer issuing goods to the retailer or wholesaler.

B2B implies that the seller, as well as the buyer, is a business entity. B2B covers a large number of applications that enable businesses to form relationships with their distributors, resellers, suppliers etc.

IBM, Hewlett Packard (HP), CISCO, Dell are examples of B2B. Chemconnect.com
and chemdex.com are examples of B2B that brings two firms together on the virtual market.

Following are the leading items in B2B e-Commerce.

  • Electronics
  • Shipping and Warehousing
  • Motor Vehicles
  • Petrochemicals
  • Paper
  • Office products
  • Food
  • Agriculture

Business-to-Consumer (B2C)

It is the model taking businesses and consumers to interact. The basic concept of this model is to sell the product online to consumers. B2C is the direct trade between the company and consumers. It provides direct selling through online portals. Website following B2C business model sells its product directly to a customer.

A customer can view products shown on the website of a business organization. The customer can choose a product and order the same.

The website will send a notification to the business organization via email and the organization will dispatch the product/goods to the customer. B2C is also known as internet retailing or E-trailing.

Following are the steps used in B2C e-commerce:

A consumer

  • Determines the requirement.
  • Searches available items on the website meeting the requirement.
  • Compares similar items for price, delivery date or any other terms.
  • Gives the order.
  • Pays the bill.
  • Receives the delivered item and review/inspect them.

Customer-to-Customer (C2C)

Customer to customer (C2C) is a business model, whereby customers can trade with each other, typically, in an online environment. C2C businesses are a new type of model that has emerged with e-commerce technology and the sharing economy.

Consumer-to-consumer (C2C) is also called Peer-to-Peer (P2P) exchanges. It includes all the transactions that happen among consumers. This involves third party sites that can help the market place such as eBay.com.

This also includes classified advertisements, music, and file sharing. In consumer-to-consumer networks, consumers sell the services and products to other consumers.

Customer-to-Business (C2B)

Consumer-to-business(C2B) is a business model in which consumers(individuals) create value and businesses consume that value. Another form of C2B is the electronic commerce business model in which consumers can offer products and services to companies, and the companies pay the consumers.

In this model, a consumer approaches a website showing multiple business organizations for a particular service. The consumer places an estimate of the amount he/she wants to spend for a particular service.

For example, comparison of interest rates of personal loan/ car loans provided by various banks via the website. A business organization that fulfils the consumer’s requirement within a specified budget approaches the customer and provides its services.

General features of C2B

  • Direct action.
  • Collaborative consumption.
  • Detailed segmentation.
  • Interaction. – Reciprocity.
  • Bi-directionality.

Business-to-Government (B2G)

Business-to-government (B2G) e-commerce is concerned with the need for businesses to sell goods or services to governments or government agencies. Such activities include supplying the army, police force, hospitals and schools with products and services.

Furthermore, businesses will often compete in an online environment for contracts to provide services to the public on behalf of the government. Such services may include the collection of taxes and the supply of public services.

The exchange of information, services and products between business organizations and government agencies online. This may include,

  • E-procurement services, in which businesses learn about the purchasing needs of agencies and provide services.
  • A virtual workplace in which a business and a government agency could coordinate the work on a contracted project by collaborating on-line to coordinate on-line meetings, review plans and manage progress.
  • Rental of on-line applications and databases designed especially for use by government agencies.

Customer-to-Government (C2G)

Customer administration or customer to government-commerce model enables the customers to post feedback or request information regarding public sectors directly to the government administration or authorities.

Government-to-Citizen (G2C)

This model is also a part of e-governance. The objective of this model is to provide good and effective services to each citizen. The Government provides the following facilities to the citizens through the website.

Government-to-Business (G2B)

Government-to-business(G2B) is a business model that refers to the government providing services or information to business organizations. The government uses the B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities.

Peer-to-Peer (P2P)

A peer-to-peer(P2P) economy is a decentralized model whereby two individuals interact to buy or sell goods and services directly with each other, without an intermediary third-party, or the use of a company of business. The buyer and the seller transact directly with each other.

Advantages and Disadvantages of E-Business Models

Advantages of E-Business Models

The main classifications for the advantages of business models for e-commerce:

Advantage to the Customer

Buying 24/7 all Year Long

E-commerce stores are available at all times. Customers can shop at all hours of any day during the year. In this case, customers, especially those who do not usually have time on their hands to do conventional shopping, can do any purchase anytime through visiting the website. Such websites facilitate shopping due to their convenient design.

For example, products are classified into categories that help customers have fast orders. Moreover, this kind of shopping is perfect for people who work long hours and are unable to find time to go to retail shops (Aonerank, 2019; Khurana, 2019; Al-Abrrow et al., 2018). A good example of such websites is AmazonFresh, Target, and Walmart.


Being a very convenient way to do shopping, E-commerce has become the easiest and most popular way for shopping. Products can be ordered anywhere on the planet with just a simple tap on the mobile device connected to the Internet (Aonerank, 2019). With such an easy way, consumers effortlessly pick merchandise from various sources with no physical constraint.


Time is money! With the benefit of being fast, E-commerce has facilitated the buying/selling procedures. A key advantage of cyber shops is saving time. In other words, while shopping online, customers would not need more than 15 minutes to perform their purchase. Add to that, providers are so careful as to deliver the products to customers’ doorsteps within a week.

Advantage to the Organization

No Geographical Limitations

Conventional shops impose limitations on providers which are always costly and inaccessible. For example, if customers need to get a certain item from Beirut and they live in Tripoli, they will have to drive and waste more money in order to get what they need.

Similarly, if merchants want to display their products in another city, they will have to open new branches and pay the extra money and exert extra efforts.


E-Commerce businesses have significantly lower operational costs and better quality of services, in comparison to the actual stores. There is no staff to employ and recompense, no rent and has a reduced fixed operating expenditure.

Increasing Efficiency of Companies

E-commerce benefits from the “pull” type supply administration. In this type of management, a business procedure begins at the moment a demand originates from a client and utilizes a ‘just in time manufacturing’ method. This makes the company conduct business transactions faster and at lower operational costs, increasing company efficiency.

Advantage to the Society

Customers do not need to move from one place to another to do their shopping. This process results in less transportation on streets and reduced air pollution.

It reduces the pricepoint range of items due to less fixed expenditures, so consumers with lower incomes are also able to buy items.

It has allowed remote zones in the countryside to contact items and amenities that were not accessible previously.

Disadvantages of E-Business Models

The e-commerce downsides can be classified into two main categories: technical and nontechnical:

Non-Technical Disadvantage

Inability to Test Items First-hand Before Buying

It is one of the most common problems faced while shopping online. With this kind of shopping, customers are unable to try the item before getting it. In another sense, e-commerce takes away a crucial part of the purchase process which is testing the product.

Lack of the Personal Touch

e-commerce is missing one of the factors that many customers consider to be essential, which is the personal touch. in other words, some consumers need to feel the intimate experience from physically going to the store and interrelating with sales assistants.

Cost and Product Feature Comparison

Through cyber shopping, buyers can liken several items and catch the cheapest cost. While shoppers love being able to compare prices, providers find it too restrictive as numerous prices are eliminated from suggested or recommended items based on the price range the customer sets.

Technical Disadvantages

Need for Internet Connection

Connectivity to the web or online access is required for the partaking of customers in online shopping. They also require devices that connect to the Net.

Security Issue

Cyber security is a worldwide issue that needs to be resolved. Eventually, the lack of reliable security systems creates a risky experience for customers shopping online. In recent years, the world has witnessed a number of reputable organizations and international businesses falling targets of scammers who steal consumer data from their databank.

Software Development

Software is constantly being developed and modified. This poses limitations on online companies. For example, it requires companies to constantly update software as well as the hardware required to support the development of software.

Components of E-Business Models

  1. Value Proposition: How a company’s product or services fulfills the needs of customer.
  2. Revenue Model: Defines how the company will generate profits.
  3. Market Opportunity: The revenue potential within a company’s intended market space.
  4. Competitive Environment: Other competitors selling same product in the same market space.
  5. Market Strategy: How a company intends to enter a new market and attract strategy.
  6. Competitive Advantage: How a company will differentiate it’s business from the competitors.
  7. Management Team: Employees team responsible for company’s growth.

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