Consumer to Consumer (C2C) business Model

09/08/2020 0 By indiafreenotes

Consumer to consumer (C2C) markets provide an innovative way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

Consumer to consumer (or citizen-to-citizen) electronic commerce involves the electronically facilitated transactions between consumers through some third party. A common example is an online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.

Consumer to consumer (C2C) marketing is the creation of a product or service with the specific promotional strategy being for consumers to share that product or service with others as brand advocates based on the value of the product. The investment into conceptualizing and developing a top of the line product or service that consumers are actively looking for is equitable to a retail pre-launch product awareness marketing.

Business model

Most C2C websites, such as eBay, have both streamlined and globalized traditional person-to-person trading, which was usually conducted through such forms as garage sales, collectibles shows, flea markets and more, with their web interface. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering.

When an item is listed on a C2C site, a nonrefundable insertion fee is charged based on the seller’s opening bid on the item. Once the auction is completed, a final value fee is charged. This fee generally ranges from 1.25 percent to 5 percent of the final sale price.

After the C2C site sets up the system in which bids could be placed, items can be put up for sale, transactions can be completed, seller fees are charged, and feedback can be left, while the C2C site stays in the background. For example, at the end of an auction, the C2C site notifies the buyer via e-mail that he or she has won. The C2C site also e-mails the seller to report who won and at what price the auction finished. At that point it’s up to the seller and buyer to finish the transaction independently of the C2C site.

C2C sites make money by charging fees to sellers. Although it’s free to shop and place bids, sellers place fees to list items for sale, add on promotional features, and successfully complete transactions.

Many C2C sites have expanded and developed existing product categories by introducing category-specific bulletin boards and chat rooms, integrating category-specific content, advertising its service in targeted publications and participating in targeted trade shows. eBay specifically has also broadened the range of products that it offers to facilitate trading on the site, including payment services, shipping services, authentication, appraisal, vehicle inspection and escrow services.

Specialty marketplaces have also been added to serve the specialized needs of buyers and sellers. For example, eBay Motors serves the automotive marketplace, including vehicles, parts and accessories; and (now closed) was focused on providing a fixed-price trading environment, initially for books music, videos and video games.

Many online auction sites use a system called PayPal for sellers to receive online payments securely and quickly. A traditional credit card is not required to use this site because PayPal can be linked directly to your bank account.

There are various platforms that Consumer-to-consumer e-commerce is taking place on, such as social media (e.g. Facebook), advertisement websites (e.g. Craigslist) and online auction sites (e.g. eBay).


Customer to Customer C2C marketing has become very popular in the recent years. Customers can directly contact sellers and eliminate the middle man. Moreover, anyone can now sell and advertise a product in the convenience of one’s home enabling one to easily start a business. Therefore, a wide variety of products can often be found on auction sites such as eBay, including second-hand goods. Since majority of these sales occur over the internet, sellers can reach both national and international customers and greatly increase their market. Feedback on the purchased product is often requested to aid both the seller and potential customers. The actual buying and searching process is simplified and search costs, distribution costs, and inventory costs are all reduced. Moreover, the transactions occur at a swift rate with the use of online payment systems such as PayPal.


Although online auctions allow sellers to display their products, there is often a fee associated with such exhibitions. Other times, websites may charge a commission when products are sold. With the growing use of online auctions, the number of internet-related auction frauds have also increased. For instance, a seller may create two accounts on an auction site. When an interested buyer bids for an item, the seller will use another account to bid on the same item and thus, increasing the price. Consequently, many users have purchased products at unnecessarily inflated prices.

Identity theft has become a rising issue. Scam artists often create sites with popular domain names such as “ebay” in order to attract unknowing eBay customers. These sites will ask for personal information including credit card numbers. Numerous cases have been documented in which users find unknown charges on their credit card statements and withdrawals in their bank statements after purchasing something online. Unfortunately, websites often have a liability statement claiming that they are not responsible for any losses or damages. Furthermore, illegal or restricted products and services have been found on auction sites. Anything from illegal drugs, pirated works, prayers, and even sex have appeared on such sites. Although most of these items are blacklisted, some still find their way onto the internet.