E-Commerce, B2C and D2C: A Guide to Online Businesses

Most of you must have once shopped from online sites like Amazon and Flipkart. We often use these sites to shop for clothes, accessories, and electronics. Even food service sites are available now that help you order anytime, anywhere.

There are various brands that connect with customers through these sites. Products of different companies are available on these platforms. This makes the sites act as retailers.

Many brands are now moving to direct connection with customers without the aid of these sites. This is called a D2C.

These brands are also becoming e-commerce brands. They mostly run on online platforms. This blog looks at the combination of E-commerce and D2C. It explores how businesses are moving beyond the retailer stage and reaching out to customers themselves to build strong consumer relationships.

LEARNING THE TERMS

There are four keywords used in this blog. It is important to understand what these terms mean to understand what their combination does.

1. E-Commerce- E-Commerce refers to any transaction of goods and services that takes place online. Amazon, Flipkart, or any other online shopping platforms are E-Commerce sites.
2. B2B- B2B stands for business-to-business. Here, companies make products that cater to the needs of other firms and businesses.
3. B2C- B2C stands for business-to-customer. Here, businesses sell their products to common people like us through the distribution channels of retailers.
4. D2C- D2C abbreviation stands for direct-to-customers. Here, businesses do not involve retailers but connect directly with the customers.

D2C E-COMMERCE VS B2C E-COMMERCE

E-Commerce has helped businesses expand their operations to different locations. Businesses either opt for B2C or D2C when they are working on online platforms. Here are the differences between B2C vs D2C.

SELLING PROCESS

1. In B2C, businesses sell their product through a distribution channel. They do not connect with the customers directly. On online sites like Amazon, you can see various manufacturers available. They follow a B2C system. They sell their product through a mass market site like Amazon.
2. In D2C, businesses connect directly with the consumer and sell their products. Businesses might follow the D2C system by working through their own website or shopping platform. Businesses like Plor bags sell their products on their own site.

CONTROL

1. In B2C, the product is sold through the retailer. The manufacturers do not have control. The details and selling is done by the retailer. In this case, the online market websites have the control.
2. In D2C, since the product is sold by the manufacturer themselves, the control lies with them. They have the control to determine the description of the product and the selling process.

COSTUMER RELATIONSHIP AND BRAND RECOGNITION

1. When you shop from Amazon or any other platform, do you remember the brand you buy from and make sure your next purchase is from them? That is what happens in B2C E-commerce system. People often do not recognise the brand and it is the retailer that matters. Whatever the retailer promotes is bought. This leads to low customer relationship and brand recognition.
2. On the other hand, in a D2C E-commerce system, people visit the site of the brand. This leads to higher customer satisfaction and brand recognition. People would remember the brand they bought from because they directly connect with the brand in D2C.

PROFITS

1. In a B2C system, profits are divided. Majority of the fund goes to the retailer for promoting and selling the product. The manufacturer earns little sum of the total price only.
2. In D2C system, the entire revenue generated lies with the manufacturer themselves. Since their is no distributor involved there is no dividing the revenue generated.

BENEFITS OF D2C E-COMMERCE

Many brands are shifting to D2C E-commerce system. Here are some benefits of D2C E-Commerce-

1. D2C allows customers to feel special by the unique experience provided. The product and experiences are customised.
2. When middlemen are involved, prices are increased. With the middlemen out of the frame, there is a price reduction and a higher profit margin for the manufacturer.
3. Brands have more control over how their potential consumers view them.
4. Brands are able to build a stronger customer base.

DISADVANTAGES OF D2C E-COMMERCE

While D2C can positively impact a business in e-commerce system, there are a few disadvantages as well.

1. D2C means creating your own website for sales. This means extra operational and logistics cost. Different departments would be set just for maintenance of the website.
2. Online platforms like Amazon already have people visiting the site everyday. This provides businesses with a potentially large audience. However, with D2C it might be difficult to reach out to that large an audience. It would be difficult to create a brand image and place.
3. Logistics can pose a challenge for the businesses. Poor logistics can impact the businesses.

FREQUENTLY ASKED QUESTIONS

Q.1) What is E-commerce?

Ans. E-Commerce refers to the online transaction of goods and services. Shopping websites are examples of e-commerce.

Q.2) Difference between b2b, b2c, d2c?

Ans. The difference between b2b, b2c, d2c is-

B2B is business-to-business. The end customers are business organisations.

B2C is business-to-customer. The end customers are common people, who are        reached through retailers.

D2C is direct-to-customer. The end customers are common people, who are connected to through the brand themselves.

Q.3) What is D2C explained as?

Ans. D2C stands for direct-to-customers. This is a system where brands connect directly with the customers. Here, brands do not seek the help of miidlemen or retail outlets like Amazon.

Q.4) What is the difference between B2C and D2C?

Ans. The main difference between B2C and D2C is the presence of middlemen. In B2C system, middlemen are present. Whereas in D2C, the brands directly connect with the customers.

Q.5) Which is better D2C VS B2C?

Ans. Both the systems are equally good. It depends on the goals of the businesses. If the business wishes to cater to a larger audience, B2C might help them achieve that. If the business aims to build a strong loyal customer base, D2C may help them better.