Ecommerce business models of all types are thriving worldwide, with the eCommerce portion hitting 21.3% in 2020.
An eCommerce business model refers to business dealing and profit-making based on the network and big data environment, and its application takes a significant change to the social-economic activity. Researching and analyzing types and classification systems of e-commerce business models will help discover new models, provide a way for eCommerce business model innovation, and help enterprises formulate their specific eCommerce strategies and fulfillment process.
From different classification perspectives, e-commerce business models can be divided into different types. Of which, the most straightforward classification is the one of B2C, B2B, and C2C. There are also some new types like O2O, C2B, B2G, F2C, etc.; each class can be further subdivided.
When it comes to eCommerce, the B2C model is the first that comes to most people. Business to consumers e-commerce sales is a traditional retail method where an enterprise sells to individual consumers but is conducted online. Online retail sales have steadily been on the rise, and retail eCommerce sales worldwide are expected to reach 6,388 billion US dollars, estimated statista. What’s more, the global pandemic takes it to the next level due to the social distance. With the incremental increase of internet infrastructures and enterprises’ intensive marketing approaches into consumers’ daily lives, B2C eCommerce will undoubtedly flourish.
B2B model refers to trades conducted between two businesses. The things they trade can be physical products or services. They come in many business models, like software providers(saas), web hosting companies, office furniture supply companies, and other numerous types.
After knowing the e-commerce business model classification, it is crucial to think about supply and inventory management if one would like to start an eCommerce business. Here I would like to recommend Dropshipping.
Dropshipping is a retail fulfillment method where retailers resell products from third-party like Doba.com but without having physical products in hand. When products sell, the third party will directly deliver the items to end customers. Whether for new or seasoned retailers, dropshipping is an excellent model to profit from the eCommerce industry!
1. Less initial investment
Like mentioned before, dropshipping doesn’t require retailers to buy inventory upfront, saving retailers a significant amount on buying product inventory, paying monthly warehousing, and picking & packing fee.
2. Easy to grow
Under the dropshipping business model, retailers can easily add new products to their stores to test consumers’ appetite. Dropshipping platforms like Doba.com, Oberlo usually have the feature of automated listing, allowing retailers to add products to their online stores with just a few clicks, without extra product cost and human cost. Also, by leveraging dropshipping, most of the work will be burdened by the third-party suppliers, allowing retailers to focus more on sales with less incremental work.
There are still some other benefits of dropshipping I won’t exhaust here, including a wide range of products to sell, flexible location and work time, and more.