What is 'Customer To Customer (C2C)'?

Customer to customer (C2C) is a business model whereby customers can trade with each other, typically, in the 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 and Craigslist.

BREAKING DOWN 'Customer To Customer (C2C)'

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 they can often find items that are difficult to find elsewhere. In addition, margins are high 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. Consumers simply list their products online, and the buyers come to them. In the case of eBay, items are shipped by the seller directly to the buyer.

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. Is some cases, credit card payments may not be supported although the emergence of PayPal and other payment systems over the years has 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 biggest online marketplaces. Tokopedia is a C2C retailer that provides a platform on which entrepreneurs can open small and midsize C2C enterprises (SME) of their own for free.

RELATED TERMS
  1. Customer

    A customer is an individual or business that purchases the goods ...
  2. Reverse Auction

    A reverse auction is a type of auction in which sellers bid for ...
  3. Customer Service

    Customer service is the process of ensuring customer satisfaction ...
  4. Call Auction

    A call auction is where participants buy or sell units of a good ...
  5. Competitive Pricing

    Competitive pricing is the process of selecting strategic price ...
  6. Auction Rate

    Auction rate is the interest rate that will be paid on a specific ...
Related Articles
  1. Insights

    How Are eBay And Amazon Different?

    Learn how eBay differs from Amazon in the e-commerce environment for both buyers and sellers, and understand why each operates under a specific model.
  2. Investing

    With PayPal Gone, Can eBay Survive?

    For eBay (NASDAQ: EBAY), the recent spinoff of payment processing service PayPal, along with the sale of its enterprise unit, has arguably stripped away all that was of greatest value to the ...
  3. Investing

    eBay Vs. Amazon Business Model

    For sellers looking to unload grandma’s things, the decision to go online is easy, but, they still must choose which site to list with: eBay or Amazon.
  4. Financial Advisor

    What is Alibaba?

    Alibaba might not yet have the name recognition of other ecommerce players like Amazon, but with its record-breaking IPO, it's due to be a global player.
  5. Managing Wealth

    3 Reasons To Buy Government Surplus for Your Small Business

    Learn why it's wise to access government surplus auctions to buy furnishings, equipment and other items to start a new business or expand an existing business.
  6. Personal Finance

    Paying Online: A How-To Guide

    You can buy anything at a click, but paying for it is a little more complicated.
  7. Personal Finance

    Four Online Shopping Alternatives To Amazon

    There are several alternatives when it comes to online shopping. The more you know about the reputation of the vendor and the quality of the product, the better your purchase experience will ...
  8. Tech

    Analyzing Alibaba Vs. Amazon Business Models

    Learn how Alibaba and Amazon compare in terms of each company's applied business model, and understand the markets each company aims to reach.
  9. Personal Finance

    What Makes An M&A Deal Work?

    Do you know why companies merge? Here we'll take a look at three successful company acquisitions and why they succeeded.
  10. Insights

    How Online Banking Is Overtaking Traditional Banking

    Is traditional banking doomed to be surpassed by online banking?
RELATED FAQS
  1. What are the differences between installment sales and credit sales?

    Determine the differences between credit sales and installment sales, which businesses often offer their customers for deferred ... Read Answer >>
  2. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
  3. Can you pay off a Walmart credit card in store? (WMT)

    Understand the various methods that consumers can pay off a Walmart credit card. Learn which options are the easiest and ... Read Answer >>
  4. How long can accounts receivable be outstanding?

    Learn about a company's accounts receivable, including how long it can remain outstanding, and how their payment or lack ... Read Answer >>
  5. If everyone is selling in a bear market, does your broker have to buy your shares ...

    Learn about who the counterparty to your trades is, and how your broker functions during a market sell off. Read Answer >>
Trading Center