What Is Customer to Customer – C2C?

Customer to customer (C2C) is a business model, whereby customers can trade with each other, typically, in an online environment. Two implementations of C2C markets are auctions and classified advertisements. C2C marketing has soared in popularity with the arrival of the internet, and companies such as eBay, Etsy, and Craigslist.

C2C Explained

At its most basic level, C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C businesses are a new type of model that has emerged with ecommerce technology and the sharing economy.

The advantage for customers is that they benefit from the competition for products and often find items that are difficult to locate elsewhere. In addition, margins can be higher than traditional pricing methods for sellers because there are minimal costs due to the absence of retailers or wholesalers. C2C sites are convenient because there is no need to visit a brick-and-mortar store. Sellers simply list their products online, and the buyers come to them.

Types of C2C Businesses

Craigslist is an ecommerce platform that connects people advertising products, services, or situations. Craigslist not only provides a platform for buying, selling and trading products but also posts monthly classified ads such as employment opportunities and property listings. Like many others, this platform requires the seller to ship items directly to the buyer.

Etsy allows business owners to create their own custom website on which to market their products to consumers. The C2C site offers guidance and tools for growing a business that range in price according to the business's stage of development. There's also a Sell on Etsy app that helps to efficiently manage orders, listings and customer queries at any time.

eBay features two types of product listings: fixed price items and auction items. Fixed price items can be purchased quickly by selecting the Buy It Now button. Auction items feature a Place Bid button for entering bids and show a current bid price. These items are open to bids for a predetermined time and are declared "sold" to the highest bidder.

Revenue and Growth of the C2C Market

C2C websites and similar platforms make money from fees charged to sellers for listing items for sale, adding on promotional features and facilitating credit card transactions. These C2C transactions typically involve products sold through a classified or auction system, and the products sold are often used.

The C2C market is projected to grow in the future because of its cost-effectiveness. The cost of using third parties is declining, and the amount of products for sale by consumers is steadily rising. Retailers consider it to be an important business model because of the popularity of social media and other online channels. These channels showcase specific products already owned by consumers and increase demand, which drives increased online traffic to C2C platforms.

However, C2C has some problems, for example, lack of quality control or payment guarantees. In some cases, credit card payments may not be supported although the emergence of PayPal and other payment systems over the years have helped to simplify payments on C2C platforms.

Example of the Rise of C2C

The C2C marketplace has increased over time, as more companies have entered the space to facilitate C2C transactions. Many companies target niche markets and list specific products to attract unique consumers.

For example, Amit Lakhotia, former vice president of payments at Paytm, left his position in January 2016 to pursue other ventures, one of which was Tokopedia, one of Indonesia's largest online marketplaces. Tokopedia is a C2C retailer that provides a platform on which entrepreneurs can open small and midsize C2C enterprises (SME) for free. As of May 2018, this leading retailer had approximately 143.1 million visitors.

Conclusion

The C2C marketplace is increasing in popularity among sellers looking to maximize their sales potential by connecting with customers that they otherwise would not reach using traditional selling methods. Online platforms such as Etsy and Craigslist appeal to customers who are able to locate mostly any type of product or service at a price they are willing to pay.