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Customer to Customer (C2C): What It Is, How It Works

What is Customer to Customer (C2C)?

The Customer to Customer (C2C) business model facilitates direct trading between customers, often in an online setting. This model finds expression through platforms like auctions and classified advertisements. C2C commerce has surged in popularity thanks to the internet’s advent and the rise of companies such as eBay, Etsy, and Craigslist.

Key points:

  • C2C is a business model enabling direct trading between customers, often online.
  • This model emerged alongside e-commerce technology and the sharing economy.
  • Online platforms like Craigslist, Etsy, and eBay exemplify C2C commerce, employing classifieds or auctions.
  • Some challenges faced by C2C companies include issues like quality control and payment security.
  • C2C stands in contrast to B2C and B2B business models.

How Customer to Customer (C2C) Works

C2C describes a market scenario where one customer buys goods from another customer through the intermediary of a third-party business or platform. These companies represent a business model born out of e-commerce technology and the sharing economy.

Customers enjoy the advantages of competitive offerings and frequently discover items that are hard to find elsewhere. Moreover, sellers often benefit from higher profit margins compared to traditional pricing methods, as there are minimal expenses without the involvement of retailers or wholesalers. C2C websites provide convenience by obviating the necessity of visiting brick-and-mortar stores; sellers merely list their products online, and buyers engage with them there.

Fact: The term “Amazon effect” derives its name from the renowned global online retailer and signifies the competitive advantages gained by e-commerce enterprises due to the increasing number of consumers opting to shop online rather than in physical retail outlets.

Types of C2C Businesses

Craigslist functions as an e-commerce platform connecting individuals who advertise various products, services, or opportunities. Apart from facilitating buying, selling, and trading, Craigslist also hosts monthly classified ads, such as job postings and property listings. Sellers on this platform are required to directly deliver items to buyers in person.

Etsy enables business owners to establish customised websites to showcase and sell their products to consumers. This C2C platform offers assistance and tools for business growth, with pricing varying based on a company’s developmental stage. Additionally, there’s a “Sell on Etsy” app available to efficiently manage orders, listings, and customer inquiries.

eBay offers two types of product listings: fixed-price items and auction items. Fixed-price items can be swiftly purchased by clicking the Buy It Now button. Auction items, on the other hand, feature a Place Bid button for bidding and display the current bid price. These items remain open to bids for a specified duration and are awarded to the highest bidder upon closure.

Revenue and Growth of the C2C Market

C2C websites and similar platforms generate revenue through fees levied on sellers for listing items for sale, incorporating promotional features, and facilitating credit card transactions. These transactions in the C2C sphere often involve pre-owned products traded via classifieds or auctions.

The C2C market is poised for future growth due to its cost efficiency. The expenses associated with utilising third-party services are diminishing, while the inventory of consumer-sold products is steadily increasing. Retailers view it as an indispensable business model, given the widespread popularity of social media and other online avenues. These platforms exhibit specific products owned by consumers, thereby boosting demand and driving more traffic to C2C platforms.

Nonetheless, C2C encounters issues such as inadequate quality control or payment assurances. In some instances, support for credit card transactions is limited, although the advent of PayPal and similar payment systems over the years has streamlined payments on C2C platforms.

The C2C market has expanded steadily with the entry of numerous companies dedicated to facilitating C2C transactions. Many of these companies focus on niche markets and showcase specific products to attract distinct consumer groups.

The C2C marketplace is gaining traction, particularly among sellers aiming to optimise their sales by reaching customers beyond the scope of traditional selling channels.

Online platforms like Etsy, eBay, and Craigslist cater to customers seeking a wide array of products or services at prices aligning with their preferences.


How do C2C and P2P Differ?

C2C, or customer-to-customer, contrasts with P2P, or peer-to-peer. Both involve individuals engaging in transactions, but the key distinction lies in the involvement of a company or third party facilitating transactions in C2C, while P2P transactions occur directly between counterparties without such intermediaries.

What Constitutes a B2C Company?

Most companies operate under the B2C (business-to-consumer) model. This entails businesses producing and marketing products intended for household consumption, distinguishing it from B2B (business-to-business) or C2C (customer-to-customer) models.

DISCLAIMER: This article is for informational purposes only. BARTERCARD has no business relationships with any C2C service platforms mentioned.


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