Collaborative Commerce: What it is, How it Works, Examples

What Is Collaborative Commerce (C-commerce)?

Collaborative commerce (C-commerce) is the optimization of supply and distribution channels to capitalize on the global economy by using new technology efficiently. In collaborative commerce, organizations coordinate with each other to maximize their efficiency and profitability. However, it can also mean consumers get what they need from each other instead of companies.

Understanding Collaborative Commerce (C-commerce)

Collaborative commerce (C-commerce) is a new focus for organizations attempting to become more profitable and competitive. Collaboration promotes fresh views of suppliers, competitors, and customers. A goal of collaborative commerce is for a business to move away from production and sales, shifting towards the integration of various businesses.

Companies may use or share the same technological platforms or transact business with each other and at times may integrate vertically to some degree. Collaborative commerce involves companies transacting business with other companies through electronic channels.

C-commerce vs. E-commerce

Electronic commerce is the buying or selling of products and services online. When it comes to shopping, c-commerce is when consumers get everything they need from each other. Examples of this type of c-commerce, also known as peer-to-peer commerce, include companies that allow consumers to rent things from each other, or marketplaces, such as Meta (formerly Facebook) Marketplace, that allow the sale of used goods.

Companies are embracing this form of c-commerce as well, however. Patagonia has teamed up with eBay to buy and sell used gear, while REI also takes and resells used equipment. Meanwhile, companies like Apple offer trade-in programs for their products.

Luxury brand Burberry integrates suppliers with customers to allow greater influence by shoppers on product design and marketing ads but connecting their sales day and social media activities. Yet another example of c-commerce is 3D printing; 3D printers can custom print things for themselves or for others, ultimately selling them on venues like Etsy.

Example of Collaborative Commerce

For example, XYZ Company has been producing and marketing widgets for decades. Recently, ABC Company revolutionized the widget industry and can now make them cheaply and more efficiently. XYZ Company decides to collaborate with ABC Company and starts marketing, selling, and servicing ABC Company's widgets.

Now, XYZ Company is able to increase its profitability because it no longer has to pay for all of the expenses to manufacture its own widgets. Instead, it focuses on the higher-margin business of marketing, selling, and servicing another company's product. ABC Company's revenue benefits also because of the massive number of widgets XYZ Company sells on their behalf.

As a real-life example, DoorDash has teamed with many national brands, such as McDonald’s and Chipotle, to offer fast food delivery, building their business model on c-commerce. They have since expanded their delivery service from restaurants to retailers and even offer 'fleets' of drivers to businesses.