Definition
Customer-to-customer (C2C) is an e-commerce model in which individual consumers sell goods or services directly to other consumers using a third-party platform to connect them. The platform provides listing tools, search and discovery, and usually some form of transaction processing, while buyers and sellers do the actual trading.
How C2C transactions typically work (step-by-step)
1. Seller lists an item: creates a product listing with photos, description, price (or an auction reserve), and shipping terms.
2. Platform publishes the listing: visible to other users through search, categories, or promotions.
3. Buyer finds and commits: the buyer either clicks “buy now” or places a bid in an auction.
4. Payment processing: the platform or a payment provider handles payment collection (sometimes held in escrow until delivery confirmation).
5. Fulfillment: seller ships the item or meets the buyer in person for exchange.
6. Feedback and dispute resolution: both parties may leave ratings; platforms offer dispute processes if problems arise.
Common C2C formats
– Online auctions (time-limited bidding for the highest bidder).
– Classified-style listings (static ads where buyers contact sellers).
– Marketplace listings with fixed prices (sellers set Buy It Now prices).
Why platforms exist
Platforms reduce search costs and liquidity problems by aggregating many buyers and sellers in one place. They also add convenience (tools for listing and payment), although level of support and guarantees vary.
How C2C platforms make money
– Insertion or listing fees (small fee to post a listing).
– Final value fees or commissions (percentage of the sale price).
– Payment-processing fees (charged by payment providers).
– Optional promotional/featured listing fees.
Advantages and downsides
Advantages for sellers
– Lower overhead than physical retail or wholesale.
– Access to a broad buyer pool.
– Flexibility to list unique or used items.
Advantages for buyers
– Ability to find rare, used, or lower-priced goods.
– Competitive pricing via auctions.
Common risks
– Limited quality control; product condition may vary.
– Payment and fraud risk (scams, chargebacks).
– Inconsistent buyer protections across platforms.
– Variable moderation and dispute handling.
Examples of well-known C2C platforms
– eBay (auctions and fixed-price listings)
– Etsy (handmade, vintage, craft supplies)
– Craigslist (local classified-style listings)
– Amazon Marketplace (third-party individual sellers selling to consumers)
C2C vs. P2P vs. B2C — short definitions
– Peer-to-peer (P2P): direct exchanges between individuals without a central company acting as intermediary. Example: some decentralized file sharing or direct lending platforms that connect two parties directly.
– Customer-to-customer (C2C): individuals trade with each other using a platform that facilitates the transaction and often enforces rules.
– Business-to-consumer (B2C): a business sells goods or services directly to end consumers.
Checklist: what sellers should confirm before listing
– Item condition and accurate description (include clear photos).
– Competitive but realistic price (research comparable listings).
– Platform fees and payment-processing fees (know exact percentages and fixed charges).
– Shipping method, packaging cost, and estimated delivery time.
– Return policy and whether to offer buyer protection.
– Local laws/taxes and whether sales must be reported for tax purposes.
– Safety plan for in-person exchanges (public places, bring a friend).
Checklist: what buyers should check before buying
– Seller ratings and recent feedback.
– Clear, close-up photos and honest descriptions.
– Payment method safety (prefer platform-managed payments or reputable processors).
– Shipping cost and delivery estimate.
– Return policy and platform dispute process.
– Beware of deals that look too good to be true.
Worked numeric example — estimating seller net proceeds
Assumptions
– Sale price: $120
– Platform final value fee: 10% of sale price
– Payment processor fee: 2.9% + $0.30
– Shipping cost paid by seller: $12
– No insertion fee for this listing
Step-by-step calculation
1. Platform commission: 10% × $120 = $12.00
2. Payment fee: (2.9% × $120) + $0.30 = $3.48 + $0.30 = $3.78
3. Shipping cost: $12.00
4. Net proceeds = Sale price − (platform commission + payment fee + shipping)
= $120 − ($12.00 + $3.78 + $12.00) = $120 − $27.78 = $92.22
Takeaway: after fees and shipping, the seller receives $92.22 in this example. Always verify actual fee schedules for the chosen platform; many charge additional fixed listing fees or promotional fees.
Special considerations and best practices
– Verification and trust: prefer platforms that offer verified payments, ratings, and buyer/seller protections.
– Document condition: keep records (photos, messages) in case of disputes.
– Taxes and reporting: income from sales can be taxable; check local rules and platform reporting thresholds.
– Shipping proof: use tracked shipping and retain receipts to defend against false non-delivery claims.
– Niche marketplaces: specialized C2C sites can reach buyers who value curated or unusual items but may have different fee structures.
The bottom line
C2C marketplaces let individuals trade directly with one another while using an intermediary platform for exposure and transactions. They lower distribution costs and expand reach for sellers, and they give buyers access to unique or lower-priced items. However, the model carries risks around quality, payment security, and inconsistent protections, so both buyers and sellers should be deliberate about fees, verification, shipping, and dispute procedures.
Sources
– Investopedia — Customer to Customer (C2C): https://www.investopedia.com/terms/c/ctoc.asp
– eBay — How Buying Works on eBay: https://www.ebay.com/help/buy
– Etsy — How Etsy Works: https://help.etsy.com/hc/en-us/articles/115013328108-How-Etsy-works
– PayPal — Seller and Buyer Protection: https://www.paypal.com/us/webapps/mpp/paypal-safety-and-security
– Federal Trade Commission (FTC) — Online Shopping: https://consumer.ftc.gov/articles/online-shopping
– Craigslist — About Scams and Safety Tips: https://www.craigslist.org/about/scams
Educational disclaimer: This information is educational and general in nature. It is not individualized investment, legal, or financial advice. Evaluate your own circumstances and consult a qualified professional before making transaction or platform decisions.