Posts Tagged "Consumer Model"

Direct from Plumbing Wholesaler

Posted by on Jun 16, 2013 in Uncategorized | 0 comments

A business by the name of Ferguson is a 60-year-old plumbing wholesaler in the U.S.  They are a large company, having approximately 18,000 employees.  President and CEO Frank Roach describes in the Newport News, VA Daily Press:

Ferguson had already put in motion its key plan for future growth by venturing into e-commerce with the buyout of Improvement Direct and its online home improvement and decor stores in 2007. As Ferguson is primarily a wholesaler, its online platform was envisioned to serve business customers, although the division is capable of moving Ferguson toward more direct-to-customer sales with Build.com, Roach said. In the past, contractors and interior designers would visit Ferguson’s showrooms to pick out cabinets, faucets, bathtubs, appliances, lighting and other building products.

E-commerce won’t replace Ferguson’s showrooms, but it lowers operating costs as it allows for self-service, he said. Commercial customers can order and track statuses online 24/7 without having to make phone calls.

“We’re not going to wait for the world to get better,” Roach said. “We’re going to get better ourselves.”

from the Newport News, VA Daily Press article by Tara Bozick June 13, 2013. Click here to read more.

Ferguson, as a wholesaler, is working to move towards a direct-to-consumer model.  Eliminating the brick-and-mortar retailer step and allowing end consumers to purchase directly from their online platform should benefit the company.

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B2C Characteristics

Posted by on Dec 29, 2012 in Uncategorized | 0 comments

The B2C (Business to Consumer) model of selling is advantageous for consumers and businesses.

From Chron.com:

Characteristics

The B2C model focuses on direct selling and marketing between a business and a consumer via an e-commerce website. A lower purchase volume of higher priced products typically characterizes B2C companies. Since the model depends on individual transactions and eliminates the wholesale purchaser, the company can make a higher profit while the consumer spends the same amount of money or sometimes less. B2C is effective for smaller companies since individual consumers are not as concerned with company recognition as they are with getting the product for the best price.

Types

B2C companies divide into five major categories: direct sellers, online intermediaries, advertising-based models, community-based models and fee-based models. Each type is so different from the others that they are not directly comparable. In fact, some B2C businesses utilize more than one type to reach different audiences.

Direct Sellers

Direct sellers, such as online retailers, sell a product or service directly to the customer via a website. You can further divide direct sellers into e-tailers and manufacturers. E-tailers are electronic retailers that either ship products from their own warehouses or trigger deliveries from other companies’ stocks. Product manufacturers use the Internet as a catalog and sales channel to eliminate intermediaries.

Online Intermediaries

Online intermediaries perform the same function as any other broker. The business allows non-B2C companies to reap some of the benefits. Brokers offer buyers a service and help sellers by altering the price-setting processes, according to economics professors Thierry Pénard of the University of Delaware and Michael A. Arnold of the University of Rennes in Rennes, France.

Advertising-Based Models

Popular websites rely on advertising-based models. These websites offer a free service to consumers and use advertising revenue to cover costs. They draw a large number of visitors, making them ideal advertising streams for other companies. Advertisers will pay a premium to sites that deliver high traffic numbers.

Community-Based Models

Community-based models combine the advertising method that relies on traffic at sites that focus on specialized groups to create communities. Community sales and advertising take advantage of social and network marketing by focusing on specific groups that want specific products. For example, sites used by computer programmers are perfectly placed to advertise computer hardware and software products. At least one social media website uses member information to target advertisements to interests and locations.

Fee-Based Models

Pay-as-you-buy or paid subscription services fall under fee-based models. The most common of these are online subscriptions to journals or movie sites such as NetFlix. These companies rely on the quality of their content to convince consumers to pay a usually nominal fee.

Griffin, Dana. “Explain the Business to Consumer Model.” Chron.com.  Accessed 12/29/2012. http://smallbusiness.chron.com/explain-business-consumer-model-2258.html

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