Before the internet and the web even existed, there was nothing called a C2C business model. It sure all started with the rise of the internet, and if you are wondering what exactly it stands for, well it simply means a “customer-to-customer” business model. Have you ever used or heard of websites or marketplaces like Etsy and eBay? Well, yes, those are the C2C platforms, where you as the customer who already bought a product from somewhere else, can sell it further to somebody else on the internet. That’s how it works. And today, we are here to take a good look at the advantages and disadvantages of the C2C business model, so that you can have a good idea of whether to try it out or not. So, here we go.

Advantages of the C2C Business Model

1. Super Low Setup Costs for Sellers

To opt for a C2C model, the retailing business setup cost is usually the first thing that we should consider. C2C sellers, in contrast to traditional businesses, can kick-start an online business with hardly any setup costs in hand. And to be honest, that’s one of the best bits about it. For example, platforms like eBay and Etsy take care of everything hassle-free. Therefore it can be a pretty low-cost way of getting started without worrying about being expensive.

2. Keep More of Your Money (High Profit Margins)

The sellers of a C2C operation are ready to take the entire cake, you know, as there are no time-wasting middlemen getting a share of the pie. On the other side of the traditional method, the customer receives a product that has passed through different intermediaries before being delivered to him or her, who gets their cut too. The bottom line boils down to the fact that in the C2C market, sellers are the ones who go directly to the buyers and thus, earn a bigger share of each sale, EVERYTIME.

3. Buyers Get Great Deals Too

C2C platforms are a smart choice for customers as well, but how exactly? Well, one of the most important places for C2C platforms is much lower than the cost price at retail stores. Why? The answer is very straightforward: sellers actively compete with one another for customers, which makes prices lower, as simple as that.

4. Access to Unique and Hard-to-Find Stuff

C2C platforms stand out above the rest because of the huge variety of products on them, right? Like, from vintage finds to handmade products, a shopper can buy things that might otherwise be hard to find in normal stores. Etsy and eBay are global platforms for sellers to showcase their products. Hence, they also provide local buyers with access to products from outside, including one-of-a-kind items, you know?

5. Convenience All the Way

Both parties benefit from C2C’s flexibility. The customers avoid the hassle of walking to a physical store and they have the option of shopping without any worries. Sellers have the same ease because they can list and sell their products online as opposed to using a physical store. Everything, from listing an item to making a sale and shipping it, is done online. The model is simple and does not require much sophistication in technology at all; anyone across the globe can participate at any time. So, that’s that.

Disadvantages of the C2C Business Model

1. No Quality Control = Buyer Beware

One of the terrible things about C2C platforms that put people off is the absence of quality control. Sellers provide the item description and pictures, but, since there’s no central authority verifying items before they’re listed, the buyer is thus left with only the seller’s assurances, you know? So, if the product you are buying online from a C2C platform, and the quality of that is pretty bad when you receive it, well, you can’t do much about it. You are pretty much stuck with it.

2. Fraud and Scams Are a Real Risk

Many times, the matter of fraud is the most important factor. Fraudulent sellers can easily create accounts, sell some counterfeit products, or just disappear and not deliver the goods at all. It’s not a rare thing as well. In the same vein, some buyers might just be clever and scam the seller by telling a lie like they never received the item or by refusing to pay. Even if eBay and Etsy have some kind of a safety net, these scams are relatively still the same, which makes both the buyer and the seller vulnerable.

3. Intense Competition Can Crush Prices

The main reason why price wars are so common is that there are many sellers competing for buyers’ attention, right? Certainly, this is not challenging for buyers but, regrettably, it can be a bad moment for sellers. With too many similar products on the market already, sellers have no choice but to price their products to stand out, which may have an adverse effect on returns, that’s for sure.

4. No Guarantees on Payment or Shipping

Another downside of the C2C model, however, is the uncertainty surrounding payment and shipment. Although most platforms make use of payment processing and dispute resolution, there are still some cases where buyers are unable to get their orders while sellers do not receive what they made the payment for. Such problems lead to mistrust between both parties, particularly if the platform’s customer service is a bit slow or insignificant. This lack of trust in the payment platform can make people avoid using it in the future.

5. Bad User Experiences Happen

Finally, bad user experience could be a very real problem on C2C platforms. How? Well, buyers might deal with slow shipping, unresponsive sellers, and receive damaged or late items. Sellers, on the other hand, can also suffer through dissatisfied buyers, return issues, or negative reviews that may just ruin their image, and this is not a good thing at all.

Conclusion

That’ll do it for now. So, by this point, it had to be clear to you whether to dive into the C2C business model or not, right? Well, we tried our best to let you know about the possible upsides and downsides of this kind of business, so, we hope that this information was a help in some way.