When creating an eCommerce business, you usually think of an online store where customers buy your products and you ship them. But the truth is that there are various eCommerce business models, and understanding them can help you make better decisions for your startup.
But what are the eCommerce business models? Are they all feasible? Do they offer more opportunities or are they more exclusive? Below, we'll tell you about all the ones you might encounter. Shall we begin?
Business to consumer (B2C)
Thinking about an online store is thinking about this type of e-commerce business model. It is characterized by the direct sale of products or services from a company (you) to a final consumer (your customer). To do this, they use online platforms to bring products or services to your customers, allowing them to purchase them without having to deal with intermediaries.
An example is Amazon. It offers a wide variety of products sold to end consumers.
Business-to-business (B2B)
Another eCommerce business to consider has to do with the transactions that take place between companies. That is, one company sells a product to another company.
To make it easier to understand, imagine you own a chocolate company. But to make them, you need the ingredients. So you go to another company to buy them. Basically, what you're doing is buying from a company to make your products and then sell them to consumers.
Another simple option is a computer store that sells custom computers. This company buys the parts from another company so it can build those computers.
consumer-to-consumer (C2C)
Within the eCommerce business models, this includes: consumers and the transactions that occur between them. For example, imagine you have a product at home that you no longer use and want to sell. You list it on a platform and sell it to another individual.
This is called consumer-to-consumer sales, and the platform on which it takes place acts as an intermediary. All it does is facilitate the transaction and, in some cases, also charge a commission on the sale.
The clearest examples are Wallapop, Vinted, or even eBay. On all of them, it's individuals (although some companies also) who sell products, either secondhand or new. But in most cases, it's just one or two products.
Consumer to business (C2B)
Don't you think that a consumer can offer products or services to companiesIt actually exists, and it's more common than you might think when you think of freelance platforms offered to businesses.
This involves an individual or consumer offering their products or services to a company. For example, they might offer graphic design services to the company to create a logo or visual identity. Or they could offer their products for sale in the company, thus expanding the product portfolio available to its customers.
Although this isn't the norm, as we're usually talking about professionals offering their services to companies, there may also be people who do this as a hobby or who only do it in their free time.
Subscription model
Even if you don't think of it as e-commerce, it can happen. Imagine this: you have an exclusive store that offers discounts or limited, high-end products. To prevent everyone from buying, you set up a subscription. Only those who subscribe get access to these special, limited-edition products.
The objective is Offer high-quality, recurring products or services that justify paying a subscription to access them. Otherwise, they wouldn't have them. And even if you don't see it, the truth is that it fosters customer loyalty if you offer them something that matches their needs or interests. Plus, it gives you a predictable income for your business.
An example is streaming platforms. But more focused on businesses, for example, Privalia requires you to register to view offers. In this case, they don't ask you anything to subscribe, but you must be in their database to access purchases (it's a way to obtain your contact information).
Freemium model
Related to the above, you have the freemium model, which is based on combining free services, perhaps a basic product or service at no cost; and a paid service, with a complete and more functional product or service.
This model is ideal for applications, technology tools, etc.
Dropshipping
Among the eCommerce business models, you also have the well-known dropshipping. It is characterized by creating an online store in which You don't have to worry about shipping or product inventory.In exchange for a monthly fee, another company handles the shipping of the products your customers purchase from you.
This business has its advantages and disadvantages, but when you're starting out, it can be a way to save money and still gain an online presence and build a brand identity for the future.
Credit model
One of the eCommerce business models that has become very popular is this one. It consists of acquire the products or services but without paying for them immediately. In reality, what is established is that they will pay for them in the future or in installments, so that the customer is more inclined to buy knowing they don't have to pay immediately.
An example is one of AliExpress's payment methods, where you are not charged for your purchase until you receive and confirm receipt of the product.
As you can see, there are many eCommerce business models. The final decision should be based on the type of business you want to run to determine which one best suits you. Even so, it's also not a bad idea to combine several businesses or even create a new model. This will help you stand out from the competition.