What is C2C eCommerce?

What is C2C eCommerce?

C2C e-commerce is a business model that allows a third party to provide a marketing platform for transactions between customers. It is popularly called the customer-to-customer market, where you typically trade products for money with other customers in an online environment.

E-commerce/online marketing makes C2C markets increasingly easier to trade which makes it attractive to online entrepreneurs.

If you are an online entrepreneur, and you want to run a C2C business, keep reading. In this article, we’ll take a look at C2C e-commerce in detail so you can understand all its advantages, disadvantages, types, popular platforms, business strategies, market revenue, and more.

 

Key Highlights

  • C2C e-commerce is a business model that allows consumers to buy and sell from each other directly, typically in an online space
  • C2C means customer to customer or consumer to consumer. It is different from other e-commerce models like B2C (Business to customer), B2G (Business to Government), and DTC (Direct to consumer).
  • C2C e-commerce can be broadly divided into two categories; e-commerce marketplace and P2P/classified model
  • There are different types of C2C e-commerce platforms. They include online auctions, e-commerce sites, money transfer platforms, and social media platforms.
  •  Some popular examples of C2C e-commerce platforms include Amazon, Etsy, Craigslist and eBay.

 

What is C2C E-commerce?

C2C e-commerce is a unique business model that allows customers to buy and sell directly from each other, typically in an online space. C2C companies like Etsy and Craigslist help facilitate customer relationships and trade by providing a platform that allows for the seamless exchange of goods and services.

How does C2C e-commerce work?

Let’s say you are a creator of fashion accessories like hand beads, unique earrings, and antique fashion items. You can decide to take your products to an online marketplace like Etsy. On this platform, you can register as a seller and list your product for other customers on the platform. If an Etsy user fancies your product, you would have made a sale without much hassle, if at all.

Unique items are not the only things you can sell in the C2C markets. Freelancers also sell their skills on platforms like Fiverr and Upwork. If you need to complete a business project or design a website, you can sign up as a seller on Fiverr and hire a freelancer to carry out your job for you.

Difference between B2C and C2C businesses

While C2C businesses facilitate trade between customers, B2C businesses create their goods or services and sell directly to customers.

  • B2C focuses on producing goods for customers, controlling quality, and selling products to target audiences while retaining customer loyalty and building their brand.
  • C2C businesses merely provide a platform for their customers to reach a wider audience while giving them extra/unlimited buy and sell options.

 

Advantages of C2C E-commerce

Many benefits come with trading in a C2C marketplace. Some of them include:

  • Cost-effectiveness C2C platforms don’t produce products. All they need to do is maintain the web infrastructure and payment channels. They make their money by charging a fee on sales. This leads to higher profits for sellers and lower costs for buyers.
  • Higher profit margin – Sellers in C2C markets often make more profit because they sell directly to consumers who value what they have. For example, if you want to sell used baby toys, you can find a new parent on a C2C platform looking for refurbished toys and sell directly. Goodbye pawn shop.
  • Low barrier entry – Starting a C2C business is easy. You don’t need to commit huge capital upfront and you can grow at your own pace. On C2C skill service platforms like Upwork, you can sign up today and start making money in a few hours (if you have the right skill set).
  • Convenience – If your child has outgrown their old toys, it will be quite stressful to start looking for a new parent that will have them. C2C platforms can provide you with a wide customer base in a few seconds. Potential buyers can also find what they are looking for at the click of a button.

 

Disadvantages of C2C E-commerce

Every business model has its drawbacks and C2C e-commerce is not excluded; Here are some common disadvantages:

  • Payment is not always seamless Some C2C platforms may not allow some payment channels and others may have geographic restrictions. Also, it is harder to demand a refund especially if the seller has made a withdrawal.
  • Absence of effective quality control Since C2C e-commerce is an open market that allows easy entry, the platforms cannot always verify the good quality of each product posted on its website. For example, someone can decide to put up defective toys for sale and unassuming customers will buy them.
  • Attractive to online scammers Asides from putting defective products up for sale, online scammers may sell non-existent goods to unsuspecting customers. The good news is C2C platforms like Etsy have a holding period to confirm goods are in transit before funds are released to sellers.

 

C2C Statistics

 

Types of C2C E-commerce

C2C e-commerce can be broadly classified into two categories. They are Marketplace and P2P/Classified.

CategoryBreakdown
MarketplaceC2C e-commerce marketplace is where customers (individuals not brands) display their goods and services on an e-commerce platform and wait for buyers (other individuals to buy). In essence, the e-commerce platform acts as an intermediary between customers for a fee.

C2C e-commerce marketplace platforms help guarantee payment, handle seamless delivery, and resolve conflicts.

P2P/ClassifiedSome marketers have described this model as the future of marketing because it removes the need for a third party and extra fees.

With the P2P model, the customers can directly buy and sell from each other. Even though P2P transactions still require some form of external framework, the actual buying and selling are not in any way influenced by the platform. Some good examples of P2P platforms are Instagram and Binance (for crypto assets).

 

The major difference between these two C2C e-commerce types is the presence/absence of an intermediary. In the C2C e-commerce marketplace, the platform serves as an intermediary, and it helps facilitate transactions and provide other services to both parties for a fee.

However, with the P2P customer model, the transaction is performed directly between both parties. The buyers and sellers bear all the risks and also enjoy all the rewards (no need to pay a fee). There is no platform or middleman to mediate the transaction.

 

Types of C2C Platforms

As you already know, C2C platforms serve as intermediaries between customers. However, these platforms can come in different forms. Here are some of the most popular types of C2C platforms;

  • E-commerce sites
  • Online auction sites
  • Social media sites
  • Payment platforms

 

E-commerce Sites

If you want to target a niche audience and you are planning on a C2C business full-time, you can start without hassle. Most e-commerce sites allow C2C businesses to create their online stores on their platform and sell goods easily. Companies like Craigslist, Etsy, and Amazon allow you to reach a broader audience without much marketing effort.

For instance, if you start selling handmade men’s shoes and shoe accessories on Amazon, the platform will help you filter for customers that are looking for specifically hand-crafted shoes. This process allows small C2C businesses with unique niches to grow their businesses fast.

 

Online Auction Sites

C2C businesses can come in many forms. If you want to buy a box of refurbished toys, you can get them on popular e-commerce websites. However, if you want to buy an athlete-signed jersey or a fairly used Rolls Royce chances are you won’t find that on Amazon. Antique items, arts, horses, and highly valuable assets are sold from customer to customer through auctions.

Online auctions are more popular today than ever. A customer can set up a website and invite other customers to bid for items. For this to work, there has to be trust between the buyers and the seller. The sellers mostly hold all the cards in an online auction and their reputation depends on seeing successful transactions to completion.

Social Media Sites

Social media sites like WhatsApp have made C2C easier in the recent past. With the introduction of WhatsApp Business, Instagram ads, and marketing resources, Individuals can now manage their C2C businesses without hassle.

In addition, selling on private platforms like WhatsApp gives the seller more credibility and helps them create long-term relationships with their clients. Social media sites are mostly P2P e-commerce platforms.Venmo and PayPal. If you are just starting a C2C business, chances are you will need one of these to help you accept payments and withdraw earnings seamlessly. If you are operating a P2P business, you need to figure out your entire payment process in detail before signing up for money transfer platforms.

Payment Platforms

Payment platforms like Venmo and PayPal are also common types of C2C platforms. If you are just starting a C2C business, chances are you will need one of these to help you accept payments and withdraw earnings seamlessly.

These platforms allow their users to exchange funds directly and act as an intermediary, while charging small transaction fees. Many of these solutions also provide payment portals that allow individuals and businesses generate invoices and payment links, plus virtual payment details to enable easy and versatile payments.

 

Popular C2C Platforms

So what are some great real-life examples of these C2C platforms and how do they work? Let’s take a look at some of them:

 

Paypal

Paypal is one of the most popular payment solutions in the world and allows you to make nigh-borderless payments around the world to other Paypal users and general bank account holders.. You simply signup to the platform, register your info and create an account, link a funding source (e.g a credit card) and you’re good to go.

Some other popular payment solutions and Paypal alternatives include Payoneer, Venmo, Wise, and Stripe.

Amazon

If you are new to the C2C industry, you should start with the most reliable company you can find. Amazon is the largest e-commerce company in the world and the most customer-centric online marketplace available today. The platform is both a B2C and C2C platform. This means that it allows both businesses and individuals to sell new and used items on its platform.

For you to become an Amazon seller, you have to create an account, list your products for offering, make sales and ship directly to Amazon or your consumers. Amazon takes a cut of the fees and this can range anywhere from 6 to 30 percent depending on the product sold.

Etsy

If you are an artist and you’ve been looking for the right way to get someone to buy your work, Etsy might just be the answer. This C2C e-commerce platform is home to thousands of physical and digital creators. You can sell anything from kids’ sketchbooks to unique handmade products. Etsy is an online community for vintage lovers, artists, and designers.

The platform is quite easy to use. C2C sellers can create a custom website and design it to fit their brands. The site also offers the necessary tools and guidance needed to grow a business. You can manage your orders conveniently thanks to the “Sell on Etsy” app.

Craigslist

Craigslist connects people advertising products, services, cars, rentals, and so on to people who are looking to buy. Craigslist also posts monthly ads for employment opportunities and property listings.

Craigslist has localized sites for different cities across the US and the world. The sellers on Craigslist are required to deliver their goods to the buyer in person. This allows you to create a community and bond with people in your environment.

eBay

If you are looking to sell hard-to-find products at a good deal, eBay is the perfect C2C e-commerce platform for you. This popular C2C e-commerce platform acts as an intermediary and features two types of product listings. They are fixed-price items and auction items.

The fixed-price items are always on display. You can list a product at a fixed price and sell them out to interested parties at a steady pace. eBay also allows you to auction more sophisticated products as a customer. On these items, there is a place bid button for customers to indicate interest. After the allotted time has passed, the item is declared sold to the highest bidder.

WhatsApp Business

Another rising C2C platform that is yet to gain complete recognition in the market is WhatsApp business. Unlike other C2C platforms, WhatsApp business does not send potential customers your way. Rather, it gives you all the tools you need to manage your business and customers on a private social network.

The biggest selling point of WhatsApp business is that it helps you to create and foster long-lasting relationships with your customers. Most people view their WhatsApp as private. If you manage to sell to a customer on WhatsApp, they will think of buying from you first when next they need your product.

 

Factors That Set Successful C2C eCommerce Businesses Apart

Every C2C platform has success stories. Sellers that understand their product and their target market usually make headway on these platforms and might even earn themselves a fortune. Many successful online entrepreneurs are Etsy designers, Amazon sellers, Upwork freelancers, and so on. Here are some of the factors that set them apart.

Choosing the right C2C platform

Successful C2C businesses understand their product/service and they choose the right platform to help market their product. For example, if you sell handmade home décor equipment, it might be the wrong choice to open a shop on Amazon. Etsy seems like the kind of place where you can easily find customers for goods like that.

If you hope to sell old toys or e-books, Amazon is the perfect platform for you. If you are a freelancer looking to sell your skills, talent marketplaces like Upwork or Fiverr are the perfect place for you. Choosing the right platform is the first step to building a successful C2C business.

Target marketing

Target marketing is the foundation of a successful C2C business. You need to find out where your audience/customers are and reach out to them. You can do this through social media, paid ads, SEO, email marketing, and so on. Just make sure you aren’t putting your products in front of the wrong people.

Consistency

You cannot succeed in any business without consistency. In C2C e-commerce, chances are you already have enough competitors in your niche and you will need to stay consistent so customers can get familiar with your brand. Selling becomes easier once you have carved out market relevance in your niche and that can only be possible if you work on the business over a long period. Successful C2C businesses followed the right strategies consistently and eventually became profitable.

 

Strategies for C2C eCommerce Success

Hacking a C2C business will require you to follow some basic strategies. Some of these C2C business strategies include;

  • Business research – Before you start a C2C business, you should carry out proper research. You should pick a niche with a lot of profit potential. Fashion, art, online courses, digital products, and other similar niches usually thrive in the C2C e-commerce marketplace. After picking a profitable niche, the next step is to determine the right offer and then find your target audience.
  • Personalized marketing to a target niche audience – A good online entrepreneur will not depend totally on the traffic that their C2C platform sends them. You need to engage in extensive marketing if you want to make your C2C business a success. The first step is to find out where your target audience is hanging out. It could be LinkedIn, Instagram, Twitter, Reddit, Quora, and so on. After you have identified their ‘spot’, start contributing and building a brand for yourself. You can decide to do Inbound marketing (best idea) or outbound marketing for more sophisticated products.
  • Building a strong brand – After you have found your target audience, the best option is to start building credibility. If your store sells handmade jewelry or accessories, for example, make sure you engage with fashion handles and bigger brands in your industry. This will give you credibility and a more social following among potential customers. A strong brand can be your greatest ally in a C2C business.
  • Providing excellent customer service – When you start gaining customers, you have to ensure top-level customer service. When your brand has a reputation for excellent customer service, you will keep attracting customers. Referrals also work like magic for C2C businesses. If a customer likes your product, chances are he has another friend that might be interested in that same product. If you offer excellent customer support, you enjoy free PR from referrals.
  • Ensuring proper quality control – Quality control is a huge part of customer service. When you deliver on all your promises and USPs, customers will be happy to buy again. If you sell refurbished gadgets, and you promised that they work like new, the customer should agree with you. B2C businesses can survive terrible reviews for a period. However, negative reviews reflect more on C2C businesses and the only way to avoid them is through proper quality control.

 

C2C Market’s Revenue and Growth

There are three players in the C2C market; the platform, the seller, and the buyer. C2C platforms make money by charging a fee for items listed on their websites. They also make money by running special ads and facilitating credit card payments. The sellers make money by taking advantage of the popularity of the platforms to reach a wider audience target.

Revenue and Growth of C2C Platforms

If you are planning to open a C2C platform, there is a tremendous opportunity for revenue and growth. The world’s largest e-commerce platform is Amazon. It is designed to support C2C businesses and it made over $33B in 2021. You will require huge capital (probably find a VC), a large team, and countless work hours to achieve success as a new C2C platform. On the other hand, you can take full advantage of the existing platforms and become a seller.

Revenue and Growth of C2C Sellers

If you are an online entrepreneur with a physical/digital product, opening an online store is the next best step. There is a huge number of sellers which means competition. However, there is also a large demography of buyers.

C2C PlatformNo. of BuyersNo. of SellersRevenue
Etsy96.3 million7.5 million$2.47B
Amazon310 million6.3 million$514B
eBay138 million18 million$9.898B

There is a huge opportunity in the C2C market for new online entrepreneurs. If you want to build a successful C2C business, review the strategies listed above and apply them.

 

Conclusion

C2C e-commerce allows customers to buy and sell from each other on a third-party platform, in an online space. Large e-commerce companies like Amazon, Etsy, eBay, and others allow their customers to trade with each other for a fee. As an online entrepreneur, you can benefit from C2C e-commerce by looking for a low-cost physical/digital product to sell.

There are two important factors you have to pay attention to if you want to run a successful C2C e-commerce business;

  • Your customers
  • Your product

The simple hack is to build a relationship with your customers (through social media or funnel marketing) and make sure they like your product. This way, you are more likely to have repeat customers.

Next Steps: What Now?

Further Reading

Frequently Asked Questions

What are C2C e-commerce sites?

C2C e-commerce sites are websites that allow users to buy and sell from each other. They are designed to allow sellers to list products on their website for sale and they catalog those products to show potential buyers multiple choices. A good example of an e-commerce site is Etsy. Special C2C e-commerce sites like eBay also allow for online auctions on their platform.

What are the advantages of C2C e-commerce?

Higher profit margins for sellers. Since you are selling directly to the final user, you can eliminate middlemen and charge more for your product. You also don’t need to start locating buyers for your products right away! You can simply put it up for sale and let the platform feed you with potential customers. Buyers also have quick access to the right type of goods at their convenience. A parent looking for used toys will be happy to find a stack of refurbished toys up for sale on say Amazon or eBay.

Is Amazon a B2C or C2C?

Both. Amazon allows businesses to sell to customers and it also allows customers to sell to customers. Amazon is the most robust e-commerce company in the globe and anyone with something to sell is welcome.

What is an example of a C2C e-commerce transaction?

Let’s say you make hand-made antique home décor and you’re looking for a place to sell your products, you can  sign up on Amazon as a seller (Note that you are now a customer of Amazon). Later that week, someone looking for antique home décor stumbles on your page and decides to buy (He then becomes Amazon’s customer and yours too!). That’s the logic behind a C2C transaction.

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