How to Choose the Best Ecommerce Business Model for your Online Store
When creating an online store, it is important to previously define the type of eCommerce business model , as well as know the different types of online stores that exist to fulfill orders and generate income through the Internet.
Below, we show you how to choose the best ecommerce business model and the most common types of online stores used today.
Most Common Ecommerce Business Models
When choosing the right E-commerce business model for your online store, you must think about your ideal type of customer , the type of product you are going to sell and the sales channels you are going to use.
Business to Customer (B2C)
It is the most popular type of Ecommerce business model for online stores. Business to consumer businesses, or B2C ( Business to Customer ), sell products or services directly to the general public through the Internet, without intermediaries.
An example of a B2C transaction would be someone purchasing a final product online (such as sunglasses, clothing, shoes…).
The B2C customer type typically makes purchasing decisions independently and is influenced by several factors, including brand identification, quality customer service, convenience (free and fast shipping), and trial. social.
Business to Business (B2B)
Also known as B2B ( Business to Business ), it is a business to business. In general, B2B ecommerce companies sell products that help other companies do their jobs better.
B2B businesses typically deal with large or volume orders, depending on the type of product being sold, and offer wholesale pricing as a result.
This Ecommerce business model is suitable for manufacturers, as they can combine the direct sale of their products to end customers, and also offer the option of selling to multi-brand or retail stores, which also distribute their products.
Consumer to Consumer (C2C)
If you have your own products, this Ecommerce business model may be interesting for you when testing whether your product is viable. Marketplaces like Etsy or Ebay can help you show your products to an already established community of users, and even combine them with your own online store.
Direct to consumer (D2C)
D2C (Direct to customer) refers to the traditional purchasing experience, in which the online store sells the products directly to the consumer, taking care of all the logistics work (production, storage and shipping of orders).
The merchant creates income by earning a commission on the sale of each item, also known as profit. This option usually has more risk than others, since the entire logistics and marketing structure falls on the online store.
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Types of online stores for brands and retail
Once the eCommerce business model has been defined, it is time to see the different types of online stores that exist.
Single-product or multi-product businesses
Within these two types of online stores you can sell a single product (with the possibility of adding complementary products later) or you can start selling several products. Again, this is an important distinction to make, as it will dictate how your Ecommerce business model is set up.
For example, many businesses start selling sunglasses and then pivot to other complementary products, such as watches and jewelry, such as Mvmt .
In this case, it is important to focus on a specific market niche , in which each of the products you sell online makes sense for the user.
Subscriptions
In recent years, the subscription type of online store has grown more and more. Customers pay a fixed fee over time intervals (for example, month to month), in exchange for a membership or recurring product orders.
Online stores dedicated to food, cosmetics or fashion usually adopt this type of online store, with a selection of new products every month, which creates greater customer purchase value.
In this type of online store, customization is very important, since the customer is willing to pay each month to receive new products in exchange for a subscription.
Dropshipping
Dropshipping businesses have become popular because they don’t cost much to start. Dropshipping refers to a revenue stream where the merchant sells a product through their website, but the creation, storage and shipping of the physical product is handled by a supplier . The merchant has no initial costs, but also has little control over the products he sells.
In this type of online store, it is important to know the product and have enough trust with the suppliers, so as not to incur stock outages or longer delivery times.
To improve SEO positioning you can integrate a Blog within your online store where you can publish news and advice related to your products.
White brand
Many online businesses that come from Dropshipping escalate to white label products , which they customize and sell under their own brand.
By having more and more trust with the supplier, this is a great option for dropshippers. Pivoting towards your own brand creates greater trust and loyalty in customers than the Dropshipping type of online store, although internally the sales process is the same.
Conclusion
Knowing how to define an e-commerce business model before starting to create an online store can save you a lot of time in the future and help you be clear about what you want to sell and how to face the growth of your business.
Some business models require more effort than others, so you also have to take into account your limitations and the budget you have to invest. You can always pivot building your business in the future. The important thing is to be clear from the beginning what the objective of your online store is and how you want to compete.
We hope this article helps you understand the different business models for eCommerce and what types of online stores exist. If you have any questions about any of them, don’t hesitate to leave us a comment.
