B2C or Consignment Business Model?

Mischelle Frederick
4 min readAug 8, 2020

There’s no such thing as a perfect sunny side-up egg, same goes to business models.

It’s been 7 months since we launched our in-house brand. We spend months and months to develop the products as well as researching the current hype business models for the brand. We want to make a different image by making it available offline through some department stores in town once we launched the brand, to make it more as a ‘serious’ and reliable brand. However, we ended up dragging the launching date months later since it’s hard to work with outside parties when you are just about to launch as a brand.

So, what is exactly B2C and Consignment business model?

B2C stands for Business-to-Customer. In short, we are selling products directly to customers, bypassing any third-party retailers, wholesalers, or any other middlemen. Brands are able to do this model if they have an offline store/ online store that directly contact with customers who buy their products.

Consignment Business Model is a business arrangement in which a business, also referred to as a consignee, agrees to pay a consignor/ third party a specific amount if they successfully sell our products. An example of this is when a brand put their products in some department stores/ E-commerce websites.

Thus, which model is better?

Here’s some explanation based on what we have encountered so far:

Marketing effort:

B2C = Since you are owning your own ‘place’ to sell your products, 100% of the marketing must come from you too. This includes advertising, endorsement, and any other methods of marketing your brand choose to pursue to get tractions and customers. Meaning, I would say that you need more money to ‘burn’ to get more satisfying ROI.

Consignment = We are targeting to sell our products in some stores to increase traffic, awareness, as well as reduce our marketing budget. While there won’t be people seeing our website without what so called advertising, we believe by displaying our products at some offline/ department stores will automatically reaching some customers. You know, at least some people will walk-walk through our counter and see our product without much effort from us.

--

--

Mischelle Frederick

Founder at Buyin Indonesia. Living in Singapore. Sharing some personal thoughts, and experiences.