The C2B Revolution

Who are the C2B Actors ?

C2B business models like most of C2C models like Ebay are based on 3 players: a consumer acting as seller, a business acting as buyer and an intermediary dealing with the connection between sellers and buyers.

Consumer

A consumer in the C2B business model can be any individual who has something to offer either a service or a good. The individual is paid for the work provided to the companies. Depending on the model, the "consumer" can be:

• A webmaster/ blogger offering advertising service (through Google Adsense program for example or amazon.com affiliation program)
• A photographer or a designer offering stock images to companies by selling his artwork through Fotolia or istockphoto for example
• Any individual answering a poll through a survey site
• Any individual with connections offering job hiring service by referring someone through referral hiring sites like jobster.com or h3.com

Business

Business in the C2B business model represents any companies buying goods or services to individual trough intermediaries. Here are some examples of potential companies which can be such clients:

• Any company which wants to fill a job (through referral hiring sites)
• Any company needing to advertise online (through Google Adwords program for example)
• Any advertising agency which needs to buy a stock photo (through microstock sites)

Intermediary

The Intermediary is the crucial element since it creates the connection between business which needs a service or a good and a mass of individuals. Intermediary is usually a portal both for buyers (businesses) and seller (individuals).

The intermediary plays two roles:

• It promotes goods and services offered by individuals by proposing a distribution channel. It offers what individuals can't do themselves : large promotion, logistic and financial support, technical expertise
• It offers buyers a contact to a mass of individuals and takes care of money transactions and legal aspects

We can notice that some intermediaries prefer creating two different accesses one for buyers and one for sellers (Google Adwords for advertiser - Google Adsense for web publisher) whereas other companies like Fotolia have only one access because buyers and sellers can be the same.

We can differentiate two kinds of intermediaries:

• Extern intermediary : they act as a extern agent within the relation between companies and individual (ex : referral hiring site)
• Intern intermediary: they play the role both of business and intermediary. For example, it is the case of amazon.com through its affiliation program. Amazon pays individual to promote its own products.

Few types of intermediaries

Intermediary	Examples	What do they sell?
Advertising Site	Google Adwords/Adsense Tradedoubler Commission Junction	Advertising services through search engines and websites
Microstock Site	Fotolia Shutterstock Istockphoto	Stock Photos, Vectors, Flash animations
Refferal Hiring Site	H3 Josbster Jobmeeters	Job Hiring Service

C2B vs B2C : Graphical Representation

 

The C2B revolution (Consumer to Business)

Over the past few years there has been a lot of press around B2C (Business to Consumer) and B2B (business to business) business models. Ebay introduced C2C (Consumer to Consumer) which has proven to be another successful business model. Today B2E (Business to Employees) and C2G (Consumer to Government) models have become the new trend. The latter model includes applications like internet based or electronic voting.

But what about C2B ?

C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers.

This kind of economic relationship is qualified as an inverted business model. The advent of the C2B scheme is due to major changes:

• Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.
• Decreased cost of technology : Individuals now have access to technologies that were once only available to large companies ( digital printing and acquisition technology, high performance computer, powerful software)

Some models are mistakenly associated to C2B. This is the case of some price comparison sites like Kelkoo, froogle and even Priceline.com. They offer a different type of consumer and company relationship than a traditional B2C model provides but cannot be clearly defined as true C2B business models. Indeed, demand is still directed by the consumer; supply provided by the company, nothing really innovative.

There are only a few kinds of companies whose trading models could be considered as C2B.

Online Advertising sites like Google Adsense, affiliation platforms like Commission Junction and affiliation programs like Amazon are the best examples of C2B schemes. Individuals can display advertising banners, contextual text ads or any other promotional items on their personal websites. Individuals are directly commissioned to provide an advertising/selling service to companies.   

Online surveys (GozingSurveys, Surveyscout, and Survey Monkey) are also typical C2B models. Individuals offer the service to reply to the company’s survey and companies pay individual for this service.

Blogs have paved the way for news C2B and C2C applications by giving the opportunity and tools to anyone to express themselves easily and to communicate inexpensively. For instance, Nano-publishing is a concrete application of C2B and C2C schemes using a blog as a support medium, amateurs talk about precise subjects concerning their area of expertise through vertical blogs and are remunerated per published posts or commissioned on advertising or affiliation revenues generated by traffic on their blog (ex : Gizmodo.com) . Podcasting, video casting, RSS and other blog related technologies help to provide opportunities to develop new economic systems and to generate alternative revenues.

Platforms like Fotolia or Google Video are also very good examples of emerging C2B Models. On these websites, anyone is able to sell digital contents (photos, images, icons, animation, and video) to companies. Creative Digital Content is perfect for C2B business because it uses simple and cheap technologies (no production cost), can be easily shared (no logistics cost) and are not perishable (no stock cost).

This new kind of relationship between consumers and companies introduces new issues which are not yet defined by any law or classical scheme. For example, in C2B models individuals are required to bill and receive money legally. Billing is not straightforward without creating a company. For companies to pay individuals is not straightforward either. A traditional firm must pay wages to employees, a limited homogeneous group of individual whereas C2B intermediaries have to deal with a potentially heterogeneous group of individuals and must overcome problems such as: relatively high fees for low payments, diverse payments methods, varied languages, currencies and locations.

To overcome these obstacles, different solutions are available. For instance, Google Adsense Program pays Webmasters by sending them checks in dollars, incurring Shipping fees for Google and currency conversion fees for non-US users. Some companies use wire transfers to remunerate their affiliates or members. However, not everyone is willing to provide their account information and international wire transfers are still very expensive.  Some emergent online based payment solutions are more appropriate for this model. The company Paypal offers a solution enabling payments between individuals and companies or between two individuals via a virtual account identified by an email address. This kind of solution will certainly be more and more popular with the development of C2B or C2C applications. They offer the cheapest and most practical way to send money to anyone anywhere.

The increasing use of open-source applications by companies is also a concrete C2B example. Companies use more and more software originaly created by individuals to manage their processes (CRM, CMS, Database, Server Application etc.)

The new C2B business model is a revolution because it introduces a new collaborative trading scheme paving the way for new applications and new socio-economical behaviours.