# What Is C2C? How Does the Customer-to-Customer Model Work?

![Customer-to-Customer Model](https://www.investopedia.com/thmb/YQ2jAUCeWs8lACA-SXNo4oXsnC8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/ctoc.asp-FINAL-ef7535e10e814c2eb274af6b828e7d5f.png)

*— Jiaqi Zhou / Investopedia*

## What Is Customer to Customer (C2C)?

Customer to customer (C2C) is a [business model](https://www.investopedia.com/terms/b/businessmodel.asp) whereby customers can trade with each other, typically in an online environment.

Two implementations of C2C markets are auctions and classified advertisements. C2C marketing has soared in popularity with the arrival of the internet and companies such as [eBay](https://www.investopedia.com/articles/markets/042815/how-ebay-makes-its-money-ebay.asp), Etsy, and Craigslist.

### Key Takeaways

*   Customer to customer (C2C) is a business model that enables customers to trade with each other, frequently in an online environment.
*   C2C businesses are a type of business model that emerged with ecommerce technology and the sharing economy.
*   Online C2C company sites include Craigslist, Etsy, and eBay, which sell products or services through a classified or auction system.
*   Some C2C companies have problems, such as a lack of quality control and payment guarantees.
*   C2C can be contrasted with B2C and B2B business models.

## How Customer to Customer (C2C) Works

C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to [facilitate the transaction](https://www.investopedia.com/terms/c/ccommerce.asp). C2C companies are a type of business model that emerged with [ecommerce](https://www.investopedia.com/terms/e/ecommerce.asp) technology and the [sharing economy](https://www.investopedia.com/terms/s/sharing-economy.asp).

Customers benefit from the competition for products and often find items that are difficult to locate elsewhere. Also, [margins](https://www.investopedia.com/terms/m/margin.asp) can be higher than traditional pricing methods for sellers because there are minimal costs due to the absence of retailers or wholesalers. C2C sites are convenient because there is no need to visit a [brick-and-mortar](https://www.investopedia.com/terms/b/brickandmortar.asp) store. Sellers list their products online, and the buyers come to them.

> **Fast Fact**
>
> The Amazon effect is named after the popular global online retailer and refers to the competitive gains that ecommerce businesses have made as more shoppers make purchases online instead of at brick-and-mortar stores.

## Types of Customer-to-Customer (C2C) Businesses

[Craigslist](https://www.investopedia.com/articles/personal-finance/091515/4-best-alternatives-craigslist.asp) is an ecommerce platform that connects people advertising products, services, or situations. Craigslist not only provides a platform for buying, selling, and trading products but also posts monthly classified ads, such as employment opportunities and property listings. This platform requires the seller to deliver items directly to the buyer in person.

[Etsy](https://www.investopedia.com/articles/markets/012716/etsy-how-its-fared-its-2015-ipo-etsy.asp) allows company owners to create their custom website on which to market their products to consumers. The C2C site offers guidance and tools for growing a business that ranges in price according to a company’s stage of development. There’s also an Etsy Seller app that helps to manage orders, listings, and customer queries efficiently.

eBay features two types of product listings: fixed-price items and auction items. Fixed-price items can be purchased quickly by selecting the Buy It Now button. Auction items feature a Place Bid button for entering bids and show a current [bid price](https://www.investopedia.com/terms/b/bidprice.asp). These items are open to bids for a predetermined time and are declared “sold” to the highest bidder.

## Revenue and Growth of the C2C Market

C2C websites and similar platforms make money from fees charged to sellers for listing items for sale, adding on promotional features, and facilitating credit card transactions. These C2C transactions typically involve used products sold through a classified or [auction](https://www.investopedia.com/terms/a/auction.asp) system.

The C2C market is projected to grow in the future because of its cost-effectiveness. The cost of using [third parties](https://www.investopedia.com/terms/t/third-party.asp) is declining, and the number of products for sale by consumers is steadily rising. Retailers consider it to be an essential business model because of the popularity of [social media](https://www.investopedia.com/terms/s/social-media.asp) and other online channels. These channels showcase specific products already owned by consumers and increase demand, which drives increased online traffic to C2C platforms.

However, C2C has problems such as a lack of [quality control](https://www.investopedia.com/terms/q/quality-control.asp) or payment guarantees. In some cases, there is little support for credit card transactions, although the emergence of [PayPal](https://www.investopedia.com/terms/p/paypal.asp) and other such payment systems over the years has helped simplify payments on C2C platforms.

## Special Considerations

The C2C marketplace has increased over time, as more companies have entered the space to facilitate C2C transactions. Many companies [target niche markets](https://www.investopedia.com/articles/financialcareers/07/idea-clients.asp) and list specific products to attract unique consumers.

The C2C marketplace is increasing in popularity among sellers looking to maximize their sales potential by connecting with customers who they otherwise would not reach using traditional selling methods.

Online platforms such as Etsy, eBay, and Craigslist appeal to customers who can locate almost any product or service at a price they are willing to pay.

However, despite the increasing popularity of the C2C marketplace, some companies have issues. These include a lack of quality control and payment guarantees. For example, some C2C e-commerce sellers have complained of being scammed by customers, and Craigslist is mostly unmoderated.

## What Are Some Examples of C2C Companies?

In ecommerce, some big names in C2C include eBay, Etsy, Craigslist, Ali Express, and Amazon Marketplace. Some C2C payment companies include Venmo, PayPal, and Zelle.

## How Does C2C Differ from P2P?

C2C stands for customer to customer; P2P stands for [peer to peer](https://www.investopedia.com/terms/p/peertopeer-p2p-economy.asp). Both concepts involve consumers or individuals dealing with one another. The main difference is that with C2C, there is a company or other third party between the buyer and the seller (or sender and receiver). In a P2P platform, counterparties transact directly with one another without that intermediary.

## What Is a B2C Company?

Most companies are B2C (business to consumer). This means that a business produces and markets a product for household consumption. This differs from B2B ([business to business](https://www.investopedia.com/terms/b/btob.asp)) or C2C (customer to customer).

## The Bottom Line

In the customer-to-customer (C2C) business model, customers trade directly with each other—typically online. Auctions and classified ads are two versions of C2C markets, and companies like Craiglist, eBay, and Etsy—and the internet in general—have helped C2C marketing soar in popularity.  

> **Article Sources**
>
> 1.  Etsy. “[About Page](https://www.etsy.com/about).”
>     
> 2.  Etsy Help Center. “[How to Use the Etsy Seller App](https://help.etsy.com/hc/en-us/articles/4419854209943-How-to-Use-the-Etsy-Seller-App).”
>     
> 3.  eBay. “[How Buying Works on eBay](https://www.ebay.com/help/buying/buy-now/buying-works?id=4002#:~:text=How%20eBay%20works,pay%20for%20the%20item%20immediately.).”