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Start Your Business Startup Basics

What is C2C?

c2c, customer-to-customer, consumer-to-consumer
Credit: Curioso | Shutterstock

C2C, or customer-to-customer, or consumer-to-consumer, is a business model that facilitates the transaction of products or services between customers. It is one of four categories of e-commerce, along with B2B (business to business), C2B (customer to business) and B2C (business to customer).

An example of C2C would be the classifieds section of a newspaper, or an auction. In both of these cases, a customer, not a business, sells goods or services to another customer. The goal of a C2C is to enable this relationship, helping buyers and sellers locate each other. Customers can benefit from the competition for products and easily find products that may otherwise be difficult to locate.

Thanks to the Internet, intermediary companies have fostered more C2C interaction. Some examples of C2C include eBay, an online auction site, and Amazon, which acts as both a B2C and a C2C marketplace. EBay has been successful since its launch in 1995, and it has always been a C2C. Anybody can sign up and begin selling or buying, giving an early voice to consumers in the e-commerce revolution. Sites like eBay and Amazon use PayPal to mitigate any payment processing risks.

Craigslist is another well-known site where people can buy and sell goods, as well as trade services. With more than 20 billion page views per month, this classifieds site creates a community feel in the C2C business model. Craigslist does not facilitate the payment or processing of money, however — it simply facilitates the relationships, whether between a landlord and potential renters, or someone seeking specific services and the expert who can provide them.

C2C has a number of benefits for users. There are minimal costs involved with the lack of retailers and wholesalers, keeping the margins higher for sellers and prices lower for buyers. There is also the convenience factor — instead of trying to sell items in person at a brick-and-mortar store, consumers can simply list their products online and wait for the buyers to come to them. Buyers don't need to drive around and search through stores for an item they want — they just have to search for it on a C2C site.

Most C2C sites make their money from fees or commissions charged to sellers for listing items for sale. C2C sites act simply as intermediaries, matching buyers to sellers, and they have little control over the quality of the products being sold. Companies often try to prevent the sale of illegal goods or services, like pirated CDs or drugs.

But C2C is not without its problems. Credit card payments can be difficult, as the platforms are not necessarily secure and able to process such payments. There is a lack of quality control — since the sellers are consumers themselves, there is little recourse for poorly made or misrepresented products. On the flip side, because the buyers are consumers themselves, the payment guarantees can be hard to enforce.