e-business models are progressing day by day and the current scenario makes it clear that there is a wide scope and is a futuristic approach. Well, you can expect the sales to increase by a mountainous 80% by the end of 2020. It’s not a secret that in less than 25 years, the internet has brought the entire offline shopping experience right at your fingertips. All the offline businessmen have chosen to fit into the online realm just because online sales are projected to account for 17.0% of all retail sales within the upcoming years.
The market may be aware of the fact that businesses can take any configuration, and it’s easy to get adopt and indulge in the exciting and latest eCommerce trends. However, it is really important to clear out the basics or unknown business that can get you the taste of loosing soon. First and foremost you need to choose the correct eCommerce business models for yourself, you need to gain knowledge about each eCommerce model choose out an eCommerce platform that is the best according to your favorability.
This article is all about what your next move will be and comprises of the central business models of eCommerce, some examples of innovators, and the principles of innovation in eCommerce.
4 traditional classifications of eCommerce Business
Well as you already know, eCommerce is entirely is a hub formed of online marketplaces that connect customers and store owners. And the internet is primarily used in the process to control and keep everything going.
So obviously the first thing to think about is the type of business marketplace you’re going for. No matter if you’re a newbie or have been running a business for a while, you should know the kind of eCommerce business model.
The business model classifies into one of the following categories — B2B, B2C, C2C, or C2B. Well, it’s always a challenge to identify which one is yours. But do not worry here is a chance to go through each of them to understand your niche.
This business model practices by providing ranging products and services from one business to another similar or different business. Orders are processed digitally buying competence has been improved for wholesalers, manufacturers, distributors, and other types of B2B sellers. This business model manifolds various categories of companies. For example, digital companies, tools and supply companies, document hosting companies, office supply companies, and copious others.
This business model is majorly used by service providers as they find it more convenient, so if you are willing to go for services now you know what is your choice. Some of the recent flourish B2B eCommerce examples that you might have crossed across that include the Flexfire LED, Berlin Packaging, BulkBookstore, Boeing, Archer Daniel Midlands, and more.
These businesses are stabilized on the system, enterprise eCommerce platforms that work directly with other businesses in a restricted environment. This B2B eCommerce business model is cash oriented and requires more startup cash. Many brands conclude that they are not in the B2B model yet they don’t realise that they already part of it. As B2B involves Wholesale, Distribution relationships with large or chain retailers, Selling to organizations (schools, businesses, nonprofits), supplier selling to resellers.
Misconceptions in B2B eCommerce
Many conceptions have been created and bubble needs to break in order to understand this profitable model.
- B2B buyers are countless and they don’t fax.
- Pricing issues can be solved by using technology.
- Texting customers is essential
- Custom ordering is complex but that doesn’t mean your customer needs to know that.
The B2C eCommerce is the choice of majority when they think of eCommerce business. And why not after all this is the deepest eCommerce market and this model has been adopted by many offline sellers too. B2C sale is all about the traditional retail model, where a business sells to individuals, but business is managed online rather than heading in a physical store.
This business model has been one of the most successful due to its approach as it provides consumers with the power to name their price or have businesses directly compete to meet their needs. The customer can choose any of the products they like and order the same. The website then to its work by sending a notification to the business organization via email and the organization will dispatch the product/goods to the customer.
Here are some examples of B2C businesses present worldwide. Exclusively online retailers include Flipkart, Jabong, Shopclues, many other online food sites that involve Swiggy, Zomato, and more. For more information about the above-stated business model click onto our exclusive article Flipkart’s Business Model – Everything About India’s Most Valuable Startup.
Most of you will be familiar with the concept of B2B and B2C, but the concept of the C2C business model is quite different. This model is formed due to the rise of the eCommerce sector and growing consumer belief and interest in online sales. These sites allow consumers to trade, buy, and sell items in exchange for a small commission paid to the site but remember this business requires strategic and careful planning.
The C2C business model helps consumers to sell their assets such as residential property, cars, motorcycles, etc., or rent a room by publishing their information on the website. The website may or may not charge the consumer for its services. Another customer who is seeking a particular item may opt to buy the product of the first customer by viewing the post/advertisement on the website. Though there are obvious successive platforms like eBay and Craigslist, however there numerous other auction and distinctive sites shut down very quickly due to unsustainable models.
Though this model was not much recognized and was in action with people but at this current period is at a growing stage. This type of online commerce business involves the idea of consumer selling goods or services to businesses and is considered to be equivalent to a sole proprietorship being part of a larger business in this model, a consumer approaches a website showing multiple business organizations for a particular service.
Here the consumer may place an estimated amount he/she wants to spend for a particular service. For example, the comparison of interest rates of personal loan/car loan provided by various banks via websites. A business organization that fulfills the consumer’s requirement within the specified budget, proposes the consumer and provides its services.
Here are some examples of this business model that includes sites like UpWork, and several common blog monetization strategies like affiliate marketing and sites like Google AdSense, Surveyscout are also the medium of this business model.
Government / Public Administration eCommerce
The above-mentioned models are highly used worldwide however they are not only the ones. Apart from the above-stated eCommerce business model, the others involve public administration conducting eCommerce activities with businesses or customers.
B2G (also called B2A)
The whole sole client for these businesses is governments or type of public administration. Well Synergetics Inc. in Ft. Collins, Colorado, is one of the examples of this business model that provides contractors and services for government agencies.
C2G (also called C2A)
This business involves the typical individuals paying the government for taxes or charge to universities. The other two sectors that are not applicable for entrepreneur owners, however, still into existence include G2B for government sales to private businesses, and G2C, for government sales to the general public.
This is a distinctive business model that includes those websites that are used by governments to trade and exchange information with various business organizations. These websites are Government-authorized and implemented as a medium for businesses to submit application forms to the government. For example exam sites, job form filling sites.
G2C is also the government authorized that is used in general to approach citizens. These websites focus on auctions of vehicles, machinery, property, or any other material. Well, these sites also include the links for registration for birth, marriage, or death certificates. This highly uses for time optimization and fulling citizen’s requests for various government services.
Various eCommerce platforms
eCommerce is vast and before jumping onto the niche it is really important to familiarize yourself with the numerous eCommerce platforms available. There are numerous platforms available that come along with a secure payment gateway, shopping cart, checkout process, order management, and other necessary features to support almost any online store. Some of the best examples are, BigCommerce, Shopify, 3dcart, WooCommerce, Volusion, Prestashop, Weebly, Squarespace.
Types Of eCommerce Business Revenue Models
As now you are clear with your business model yet there are many other aspects you need to focus on such as how you want to handle inventory management, shipping, deliveries, and sourcing products.
Well, some choose to sell their own products, packing the boxes, and using drop shipping for the final process. Whereas some solely rely upon shipping carriers and wait, them to manage everything. So now its time to explore each model.
Shipping Carriers and Services
Shipping Carriers and Services considered to be the easiest and simplest form of all time. All you got to do is just receive the order on your online store, select and pack the products into the boxes, and handover them. Some best examples of shipping couriers include FedEx, Synergy Express Logistics Pvt Ltd, Zim world freight Pvt ltd. and Mercator Limited.
Most of the eCommerce company rely on these services as it provides real-time shipping rates along with shipping label printing and shipment tracking options. They are the one that manages the shipping, end-to-end. The company’s developing stage and with lots and lots of work can make this a better option as they deal with hundreds and thousands of orders, can simplify their entry and exist with this solution. However small companies can also choose these services.
Product Revenue Models
All the motive of every business is to generate income and once you’ve distinguished between were to sell, whom to sell, what to sell when to sell. Well, this eCommerce world is quite large and has multiple things for you to offer, some sell a single white-label product, while others offer a full selection of niche-specific products. The market is wide and has a lot of scope for each product however until and unless you don’t get the demand the supply chain op point you need to wait for the exact revenue you urge for.
Before opening your store, you need to decide the type and number of products. Once you are done with your niche, you may also need to evaluate production practices and regulations regarding what you can and can’t say. There are various businesses that be your niche on eCommerce platform be it clothes, food or any other demand in market eCommerce let you do business on each.
Now you have the wider picture about what types of eCommerce businesses, product options, platforms, and business classifications exist, you’re ready to get started. eCommerce business is not a rocket, in fact, it is much simpler as you might have ever thought of. All you need is the correct niche and right direction. This article is a brief explanation about the eCommerce business models, from where to start, what to choose, find out your niche everything.
I hope this article will help you to know the eCommerce business model adequately with a brief. Do let us know in the comment section how you liked this article and if you have any queries or suggestions, you can ask them by commenting below.