Over the last decade and a half, the internet has dramatically changed the way we live our lives and online businesses have disrupted industries worldwide, changing the way that we do business forever. And, it’s not just the business world that online shops have changed – they have had a huge effect on people’s lives.

For the first time, online shopping has provided a real gateway to would-be businessmen and entrepreneurs who want to get out of their 9-5 job and enjoy the freedom that comes with being their own boss.

It’s far easier to start an online business than it is to come up with and fund a bricks-and-mortar business idea. An online start-up requires far less initial capital investment, a much lower barrier to entry, and the return on investment can be massive.

If you’re considering starting a business selling online, choosing the right model for yourself and your business needs is crucial to get the best results.

eCommerce Business Models

Here are some of the popular business models for selling online today.

1. Affiliate Marketing:

What if you want to start an online business, but don’t want to handle or store stock directly? The next best option is to get started as an affiliate marketer. This model allows you to earn a commission on anything that you sell on behalf of another company. You could promote anything from online marketing services to car insurance or fashion items – the choice is yours. As an affiliate marketer, you won’t be selling anything directly on your website – instead, you will provide links to the company that you are affiliated with. When a sale is made through your link, you will earn a fee – usually a percentage of the total amount paid.

2. Dropshipping:

If you are just starting out with the e-commerce business model, dropshipping is a great way to experiment and get a feel for things. Using drop shipping, there’s no need to worry about what you’re going to do if you purchase stock only to find out that your business idea isn’t as popular as you would have anticipated. Instead of spending large, upfront costs on inventory, you are able to create a sales funnel; the manufacturer will send the product directly to the buyer when a sale is made through you.

3. Amazon and eBay:

Do you want to sell online, but haven’t got the time to set up and market your own online shop? Then don’t worry, there’s actually no need to have a website of your own. In fact, Amazon and eBay are two massive buying and selling sites that are well-known and trusted around the world today. People tend to trust the products that they buy from these sites, although they are listed by thousands of different sellers. Listing your products on these sites means that you have a ready-made audience who’s looking to buy, leaving you with much less work to do compared to starting a dedicated e-commerce store.

And there are more benefits – for example, FBA (Fulfillment by Amazon) sellers have the added convenience of storage and processing being handled for them and free promotion for products that have been proven to convert. Plus, you can use an automated service to get back anything you’re owed if your goods are lost or damaged.

4. E-commerce Store:

Setting up your own e-commerce store is perhaps the simplest method of getting started with selling online. It’s just like having a digital retail store, but instead of having your products out on display, you’ll entice your potential buyers with great product photography and videography accompanied by informative descriptions. To get started, you will need to pick the right e-commerce platform for your needs. This is the cheapest and most convenient method of building an online shop, with most modern e-commerce platforms today providing everything that you need from design tools to SSL certification. With an e-commerce store, you can either store inventory or work with dropshipping. Dropshipping is a great idea for e-commerce store owners looking to test out new products without an upfront cost; once you’ve found a product that converts well, you will know that it’s safe to invest in.

5. Business to Business and Business to Consumer:

Once you’ve decided where and how you’re going to be selling or promoting products or services online, it’s time to consider the strategy that you’re going to use for your model. If your products or services are targeted at businesses, setting up a B2B strategy is the best idea. Reaching out and networking should take a larger priority over advertising, and you need to be ready for the challenge of convincing companies that your product or service is better than the one that they already use. On the other hand, if you’re selling goods or services that are for the general public, business to consumer model should be adopted. Advertising and customer engagement should be used to convince customers that your product or service is the right fit for their needs.

6. Consumer to Consumer:

Whilst most of us are familiar with B2B and B2C methods, Consumer-to-Consumer (C2C) is an emerging, unique concept in e-commerce. This is popular due to the increasing demand for services such as eBay and Craigslist, for example. This type of platform allows users to trade, buy and sell products and services. The platform receives a small commission fee for each transaction, for example, the fees that you pay for listing an item for sale on eBay. However, if you want to go down this route of trading online, it’s worth being aware that it’s a complex model that requires a lot of careful planning to operate successfully, in addition to large competitors in the industry.

7. White Labelling:

Another option that you might want to consider when starting an online business is white labeling. To do this, you will need to partner up with another established business. White labeling is a business plan in which one company produces a product or service, whilst another re-brands and distributes it, usually for a profit. For example, today, many influencers will white-label and sell products on their social media accounts. This is a great idea if you don’t have the means to produce your own products. You could also look for companies to white-label your products and services in order to expand your business’ reach.

8. Subscriptions:

Subscription services have been popular since before the emergence of the internet, and they’re only growing in popularity today. The internet has made it easier than ever for consumers to subscribe to a wide variety of products and services, with everything from digital e-books and music to food and other goods on offer. A subscription-based e-commerce model allows your customers to purchase and subscribe to a service for a set length of time, which is usually either monthly or annually, although many subscription-based companies will offer a variety of length options, such as three, six or eighteen months to customers too. Once the product or service subscription has expired, it’s down to the user to either terminate or renew their contract with you.

9. Credit Model:

Last but not least, the consumer credit model is growing in popularity across the US, UK, and Europe. Essentially, this is a ‘buy now, pay later’ model which allows customers to make purchases that they pay for over a given amount of time in smaller installments. As with credit cards, there is usually interest to pay on purchases. Thanks to payment gateways such as Klarna, it’s easier than ever for any e-commerce business to integrate a buy now pay later option into the site.

Which e-commerce model and strategy is right for you? We’d love to hear from you in the comments.

Published by AtulHost

Hi, I'm Atul Kumar Pandey, a full time blogger by passion as well as by profession. You can call me digital marketer, effective leader, enthusiast gamer, and coffee lover. With my all expertise and know-hows here I blog on AtulHost, where my main objective is to build and market quality contents, reviews, and tutorials on business and tech industry.

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