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Types of E-commerce Business Models That Work Right Now

Jun 20

If you are planning to get into the eCommerce business, it’s important that you first learn about the different models there are. It goes without saying that the eCommerce industry is thriving right now and this year, online sales are expected to grow about 385%. It’s true that one can easily get caught up in all these new exciting eCommerce trends and those massive sales figures. However, if you won’t first understand the fundamentals of this business, you probably will fail. 

Speaking of fundamentals, to ensure a great start, you’d have to opt for a brand value accelerator but before getting into that, you should learn about the different eCommerce business models. To cut the hassle for you, today we are going to jot down some of the best models that’ll help you drive results. 

Starting with; 

1-B2B-Business To Business eCommerce

B2B is the most common eCommerce business model. In this model, one business provides its services or products to the other business. Mostly, supply companies, software companies, furniture companies, etc follow this model. However, what you need to understand here is that for B2B to work, you don’t specifically need a massive budget, in fact, your networking is supposed to be strong. You need to convince other established businesses that they need your product or service. One of the biggest advantages of this model is that the orders here are large and you’ll get repeat orders quite often. 

2-B2C-Business To Consumer 

The B2C business model is quite easy to understand. Here what happens is that you sell your products or services directly to your individual consumers. This is currently the deepest market and this model also falls in the category of a traditional retail model. Here, the customer will first find your website, browse the products and then decide whether those products address their pain points or not. If yes, they’ll place an order online and you can then deliver accordingly. 

3-C2C-Consumer To Consumer 

The C2C model is a bit complicated and complex so you have to be very careful when getting started with it. Unlike B2B and B2C, not everyone is familiar with the C2C eCommerce model. The reason why this model is so unique is the sheer demand of some popular platforms like OLX and Craigslist etc. All these platforms allow their users to buy, sell, trade, and even rent their products or services. These platforms then get a small commission out of every transaction. You need to work on this model first because earlier, several platforms have failed especially due to legal issues. 

4-C2B-Consumer To Business 

You might not have heard about the C2B business model but it’s actually growing with the passage of time. This model is all about the consumer providing his/her services or products directly to the businesses. One of the best examples of this model is that of freelance work. In freelancing, individuals provide their services to businesses. From affiliate marketing to freelance platforms and even reverse auction websites, they all fall under the C2B business model. 

5-B2G-Business To Government 

In this model, the eCommerce business provides its products or services to government agencies. To ensure that this model brings you the kind of results you want, you first need to bid on different government contracts. What happens here is that the government agencies put up requests for proposals and then you have to bid on them. In B2G, the chances of an agency visiting your website or contacting you itself are quite low. This only happens with the local government agencies. So if you want to land on a big order then you have to do all the bidding.

7-B2B2C-Business To Business To Consumer 

The B2B2C eCommerce model is quite easy to understand. In this model, one business sells its products to another business, and then that business sells those products to the consumers. In simpler words, three parties are involved in this business model. Most eCommerce store owners opt for this model when they want to acquire new and more customers. Without a second party involved, they might not be able to sell their products to their customers due to different restrictions like geographical limitations or hefty shipping costs, etc. It all becomes easier when another business is involved that takes the responsibility of selling the products to different customers. For those who want to expand their business and gain more customers, this model can work wonders. 

These are some of the main e-Commerce business models that you should know about before starting your own online store. You have to choose your model wisely because it serves as the backbone of your business. For example, if you are running an Amazon FBA business, you should know that it falls under the B2B model where one business is selling its products to another business. Now to ensure that this model works in your favor, you first have to do your homework. Working with Amazon FBA business brokers here can work wonders for you especially if you are in need of massive funding and want to scale your brand at the same time. 

Similarly, other models like C2C and B2B2C, require equal efforts. What you must understand here is that running an e-Commerce business is a work of patience and you have to stay consistent with your efforts. You can’t expect overnight success and your sales won’t skyrocket in a day or two. Proper strategies and planning are of utmost importance to stand out from the crowd and grow your brand. What’s even more important is to first choose the business model that you’ll be working on. Once done, it’ll then be easier for you to improve your strategies and incorporate them in a way that helps increase your sales.