Are you trying to decipher some effective E-Commerce business models that are working for other businesses? Well, you’re in luck.
Today, we’re going to be taking a look at 5 effective business models that are sure to pay dividends for your business for the foreseeable future. See below to read in-depth of what these methods entail.
According to an excerpt from ecommerceceo.com: “Sales from online stores are expected to increase 78% by 2020.”
Don’t allow yourself to fall prey to the enticing e-commerce trends, without being fully aware of what they involve for all businesses who are interested.
While keeping all of this mind, one of the biggest obstacles that many of these newcomers endure is the space face is easy to solve.
Many individuals that are striving to have a booming e-commerce business owner just don’t know how e-commerce businesses are set up and what different types of e-commerce are out there available to them at any time.
An established E-Commerce business takes the initiative and knows all of the ins and outs of the business.
With that being said, let’s take a look at some of the models that you can work towards implementing in your own E-Commerce business.
1. B2B: Business to Business E-Commerce
First on our list is the B2B (Business to Business) E-Commerce model. Essentially, a B2B model focuses on providing products from one business to another.
While many businesses in this field are service providers, you will easily find software companies, office furniture, and supply companies, hosting companies, and a wide variety of other e-commerce business models under this realm.
B2B e-commerce examples you may be familiar with, in our society, today include the ExxonMobil Corporation and the Chevron Corporation, Boeing, and Archer Daniel Midlands.
These businesses operate by having custom, enterprise e-commerce platforms that work directly with other businesses in a closed environment. A B2B e-commerce business typically requires more money in order to start up.
2. B2C: Business to Consumer E-Commerce
The B2C sector is what most people think of when they are envisioning an e-commerce business. This is considered as one of the deepest markets, and many of these names you’ll see here are big household names as well. B2C sales are the traditional retail model, where a business sells to individuals, but business is conducted online as opposed to in a physical store. Examples of B2C businesses are everywhere.
Exclusively online retailers include Newegg.com, Overstock.com, Wish, and ModCloth, but other major B2C model brick-and-mortar businesses like Staples, Wal-Mart, Target, REI, and Gap, are chief among top businesses that adhere to this mold.
3. C2C E-Commerce
Next, let’s take a look at the benefits of using a C2C E-Commerce strategy. B2B and B2C are fairly intuitive concepts for the vast majority of us, but the notion of C2C hits differently. What will a consumer-to-consumer e-commerce business look like for those who use it?
Created by the rise of the eCommerce sector and growing consumer confidence in online business, these sites will grant their consumers access to trade, buy, and sell items in exchange for a small commission that is paid back to their sites.
Opening a C2C site requires a considerable amount of planning. With regards to the obvious success of platforms like eBay and Craigslist, numerous other auction and classified sites (the main arenas for C2C) have opened and quickly closed due to unsustainable methods.
4. C2B: Consumer to Business E-Commerce
C2B is another model most people don’t immediately think of, but that is growing in its relevancy. This online commerce business is when the consumer sells goods or services to businesses and is equal to a sole proprietorship that benefits a larger business.
Reverse auctions, service provision sites like UpWork, and several common blog monetization strategies like affiliate marketing or Google AdSense will also fall under this category.
5. Government/Public Administration E-Commerce
The models listed above are the primary eCommerce retail structures, but they aren’t the only ones that are available for these businesses. Other types can include government/public administration conducting transactions with businesses or consumers.
- B2G (also known as B2A), for businesses whose sole clients are governments or type of public administration. For example, the company is known as Synergetics Inc. in Ft. Collins, Colorado, which provides contractors and services for a variety of government agencies.
- C2G (also known as C2A): Typically speaking, individuals that pay the government for taxes or tuition to universities.
Two sectors that are closed for entrepreneur owners but are on the rise include G2B for government sales to private businesses, and G2C, for government sales to the general public.
6. Business Revenue Models
Now that we’ve established the kinds of business models that you can use, let’s evaluate some of these business revenue models.
- Drop Shipping: One of the simplest forms of e-commerce, drop shipping lets you set up a storefront and you can take the customers’ money through credit card payments or PayPal. The rest depends on how your supplier feels. This will free you up from managing inventory, stocking the warehouse, or handling any packaging issues, etc.
- Wholesaling and Warehousing: Wholesaling and warehousing e-commerce businesses need a plethora of investment from the get go – you need to monitor the inventory and stock, keep track of customer orders and shipping information, and invest in the warehouse space itself. For example, DollarDays is an online wholesaler with a massive product catalog that has more than 260,00 products available. They employ a key strategy for retailers that are in this space – by offering case prices and piece prices, they can sell to the general public and other retailers as well. This gives them a higher profit margin in comparison to a strict wholesale model.
Which Plan is Right for You?
Now that you know what e-commerce businesses, product options, platforms, and business classifications exist, you’re ready to get the ball rolling.
Take a look at your business plan and see what will make the most sense for your business, moving forward. We can’t recommend one on an individual basis, this is where your skills will come into play.
By carefully analyzing all of your options, you should be able to make a fair assessment of what’s viable and what isn’t.