Types of eCommerce Businesses and Delivery Models
You log in to noon.com, browse vacuum cleaners, read product descriptions, compare prices and brands, decide on the machine you like, add it to cart, checkout and pay with your Visa, and two days later the vacuum cleaner is delivered to your doorstep – that’s e-commerce. But what are the different types of eCommerce ?
- Business to Business E-commerce (B2B)
- Business to Consumer E-commerce (B2C)
- Consumer to Consumer E-commerce (C2C)
- Consumer to Business E-commerce (C2B)
What Everybody Ought to Know about Types of eCommerce Models
B2B e-commerce business model is built on selling products or services from one company/ business to another.
Take as an example, a software company selling its services to a tourism company, an office furniture company furnishing a media production company, and so on.
Although the B2B model has a longer sales cycle, it enjoys a higher order value and more recurring purchases.
B2C e-commerce business model is the traditional retail model , where a business sells to individuals in an online mode.
B2C type of e-commerce has a short sales cycle and a lower average order value; but the good news is that less money is spent on marketing.
C2C e-commerce site gives the chance for customers to trade, buy, and sell items in exchange for a small commission paid to the site (as the online platform that eases such transactions).
OLX is a successful example of that type of eCommerce model . eBay and Etsy are also famous C2C sites that allow individuals to sell goods and services to each other, and the site takes a small commission on each transaction.
As a C2C business , you benefit from self-propelled growth by motivated buyers and sellers, but you are going to face a key challenge in quality control and technology maintenance.
C2B model is growing among the other types of eCommerce . It’s basically an online commerce business where the consumer sells goods or services to businesses.
Upwork is an example for this type of e-commerce, where this entrepreneur helped companies and big businesses hire freelancers through his website.
beXel is another example for a C2B eCommerce model , where one individual offers a software solution to gas and oil companies.
That’s all for the known or popular types of eCommerce models , but what’s in it for YOU?!
What’s the use of JUST knowing the types?
If you’re stopping here, so probably nothing ☹
But implementing those types in a revenue-making business model is better 😉
The 6 Money-Making Delivery Types of eCommerce You Can Start Now (some need ZERO budget to start)
Whether you can handle an inventory and managing a stock, source a product or manufacture one, or don’t prefer that at all, these delivery methods are diverse and one will definitely suit you!
1. White Label is Sweet as Maple
White labeling is sweet because it spares you the hassle of coming up with an idea for a product and going all the way through manufacturing and packaging it.
Companies in different parts of the world offer the white labeling service, where you pick up a product that’s already successfully sold by others, but with your packaging and your label.
Careful though with what you order; the product you order to be packaged and labelled with your name (usually of a minimum quantity to start production) has to be in demand, so that you’re not stuck with it for a long time.
2. Private Label Makes You Able
Private labeling makes you able to manufacture a product offsite, with no need for a factory or machines.
Imagine that you came up with an idea for a product you think is gonna be a big hit during summer, or that people are gonna love it; do you want to start manufacturing a thousand pieces right away and God knows what happens next?
Of course not!
There are factories and providers that manufacture products for you, based on your plan and requests to meet customers’ specifications. These manufactured products can be shipped to you, to the consumer, or to a third party like Amazon.
On-demand manufacturing is a great way to sell a unique product of your own design and specifications (even if you do not have the cash to build a factory) or to test a product first in the market before taking the decision to manufacture it yourself.
3. Dropship and Skip
Dropship the products you want through a third party and skip the hassle of managing inventory, warehousing stock, or dealing with packaging.
All you need to do is set up a store, showcase the products, and convince customers to complete a purchase and pay online. On the other side, the supplier is the one responsible for delivering the actual product to the end user.
The take here is that you gotta be sure that the supplier is reliable, because any delay or defect in the quality will be blamed on your side (you’re the storefront, the salesman).
Dropshipping is a fast-growing business worldwide, and it costs you nothing to start. You can even build an e-commerce store for free on platforms like ExpandCart.
4. Wholesale Can’t Fail
Wholesaling needs a lot of money to start, but it won’t fail to make you a good revenue on the short and long term.
Wholesaling and warehousing need you to invest in a quantity of stock to start with and in a warehouse to keep your stock. You’ll also need to keep track of customer orders and shipping information.
Then you list these products online, either on your online store or on eCommerce platforms like eBay, Souq, Jumia, or Noon.
Wholesalers can sell their products as a B2B business model or to consumers in a B2C context.
5. Subscribe is the New Vibe
Subscription e-commerce business model is the new trend; it has a lot of good vibes I’m telling you.
People simply subscribe to a box of products to be delivered to their doorstep on a regular, monthly basis.
As a subscription e-commerce site, you get your money through the regular income stream from the subscription box, or you can incentivize customers to purchase additional subscriptions or encourage their contacts to subscribe.
Quick E-Commerce Stats in Infographs
As tempting as it seems to start your own e-commerce business, it’s like any other business; it entails some disadvantages that cannot be overseen.
Every Entrepreneur Should be Aware of These 5 E-Commerce Disadvantages
- Some e-commerce startups can cost a lot to set up: buying/developing a software, training the employees, and maintaining the whole process.
- E-commerce model is not cut for every business. Some businesses cannot survive in this electronic, impersonal environment.
- Customers are concerned about security breaches, like credit card hacking or identity theft.
- Putting up all of your product’s information online (details, prices, etc.) can make your business vulnerable. Competitors can use this information to their advantage.
- It depends on internet connectivity and technology, which is not available for all.
Nevertheless, the advantages outweigh the disadvantages, and e-commerce is gaining grounds day after day, people are trusting online store more than before, and many do prefer to shop online than having to go down to a physical store.
To Sum Up,,,
If you’ve got a killer idea or a unique product you know people need and are gonna love, do not hesitate to build your e-commerce store now and start selling online. Types of eCommerce are diverse and suit all types of businesses. Any product or service can fit into one of those e-commerce models; you just think smartly.