- eCommerce

eCommerce Business Model for Entrepreneurs

This Is Why eCommerce Business Models Will Sustain For Generations to Come

More people than ever before people are choosing to become their own bosses and start a small business. In today’s digital era, launching an eCommerce store is like having a walk in the park- all because of turnkey solutions popularly known as eCommerce business models.

Now while creating an eCommerce website decisions making procedures doesn’t come lightly. Unlike those nine to five jobs, you start living and breathing your business all day long when you are an entrepreneur. Every time, we are making loads of decisions that can impact the success of your business. One of the most important choices that ultimately define your venture is which eCommerce model you choose. Unfortunately, many of you end up making this mistake of jumping straight to the fine details and forget that it entirely depends on the model for selling your inventory.

Typically, an online commercial or sales transaction takes place between a supplier and a customer. But speaking regarding business, eCommerce business model can be categorized into several types featuring different attributes.

  1. B2B eCommerceBusiness to business ecommerce emphasizes providing products from one business to another. I am sure you will come across several eCommerce businesses who act as service providers to other business in a closed environment. For example- software companies, office furniture, supply companies, document hosting companies, etc.
  2. B2C eCommerce– Business to consumer eCommerce- one of the most in-depth eCommerce market and a congenital retail model. Here as the name implies businesses sell to individuals, but business is conducted online as opposed to in a physical store. B2C eCommerce can be found everywhere, think of companies like Staples, Wal-Mart, Target, REI, and Gap.
  3. C2C eCommerce– Now I am pretty sure you must have heard of B2B and B2C models, but C2C might be a new concept for you. Consumer to a consumer eCommerce site is a place where costumers trade, buy and sell items in exchange for a small commission paid to the site. Of course, establishing a C2C store requires pretty careful planning. Check out eBay, OLX, Quicker and Craigslist auction and classified sites.
  4. C2B eCommerce– Another model that no one can quickly think of, but slowly and gradually is found growing regarding prevalence is C2B eCommerce. When a consumer sells goods or services directly to businesses, it is said a C2B eCommerce. This often results in the customer getting roughly equivalent to a sole proprietorship serving a more significant business.

The type of product

Choosing an eCommerce business model highly depends on what type of product you wish to sell such as:

#1 Physical Goods-

When thinking of online store, most of you end up considering a store created to sell physical goods. No matter how physical assets tend to be one of the most popular product types of item to sell but have, you wondered they also present challenges ranging from inventory storage to shipping, breakage, and insurance.

#2 Digital goods

Another favorite type of product that doesn’t require inventory storage or physical delivery like its physical product counterparts. Right from music to ebooks, videos, images or software digital goods can be considered anything. One of the biggest disadvantages of selling these products is its piracy. Of course, these products can be resold thousands of times over. This means margins offered are the best to consider. Plus, they come without the headaches associated with shipping and inventory management.

#3 Services

If you ask me what services can be provided online? I have a lot of options for you to consider including consulting, web design and development, content writing/ editing and the list goes on. Most people choose to sell products so keeping this point in mind, selling services through an online store is worth taking into account.

In addition to this, it turns out to be a great way to build credibility and gain exposure. At the same time, it has a certain limitation of scalability as typically services are delivered by a person.

eCommerce Business Plans

Just-in-Time Purchasing

One of the most popular business plan where an e-commerce store put up products on the store. Whenever a user orders an item, the store gets the item from the supplier and ships it to the customer. The plan is ideal for people with a low budget or no warehousing space.

Wholesaling and warehousing

This requires a lot of investment in comparison to others. Right from managing inventory and stock to keeping track of customer orders and shipping information and invest in the warehouse space itself. Have you heard about Dollar Days? It is an online wholesaler with a massive product catalog that includes more than 260,000 products.

White labeling

White labeling like you create and we will sell it with our own Branding. So, suppose a product is made by some different company and the same product is sold with a different name. This is a white label agreement between two companies.

Subscriptions

This business model allows users to purchase and then subscribe to a service for a set period (usually monthly or annually). After the subscription period is over it’s an individual choice to renew or remove the current subscription. E-commerce stores such as Tie Bar and Five Four Club work on this subscription-based business model.

Do you face any difficulty in picking the right products and niches? I am sure you do. Even some of the most successful subscription boxes tend to fall into a small handful of product categories ranging from health and grooming, fashion, and food.

How to promote an eCommerce business effectively?

  1. Affiliate marketing
  2. Pay Per Click
  3. Pay per sale
  4. Pay per lead
  5. Pay per action
  6. Pay per mile
  7. Pay per view
  8. Native advertising
  9. sponsored post

Conclusion

I am pretty sure that this post will provide you with an excellent start to putting together some significant components of your e-commerce business model. Just keep this in mind that you might require choosing a business model which need a lot more work than others. Moreover, be cognizant of the true amount of time you require investing in your business. As a result, you won’t just increase your chances to succeed but also the amount of enjoyment received while building, launching and growing your online business.


Author Bio:

Working as a manager at web development outsource company Tatvasoft.com, Vikash Kumar also has a passion of blogging, he likes to cover topics on Big Data, E-commerce and many different technological aspects and he also published his byline on different major platforms like Entrepreneur, YourStory, SAP and many other publications.

eCommerce Business Model for Entrepreneurs

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