Tips on How to Choose an eCommerce Business Model
In recent years, eCommerce has grown in popularity as it has allowed customers to buy items from the comfort of their own homes with ease.
If you’re new to eCommerce, It’s vital that you’re choosing the right eCommerce business to fit both your approach along with your products perfectly. Here, we’ll provide you with everything you need to know when it comes to determining which eCommerce business model would suit your needs best.
Business-To-Business eCommerce Business Model
Also known as B2B, this eCommerce business model involves two businesses. With this, one business essentially sells to another. While a B2B eCommerce business model typically sells services to one another, physical goods could also be a possibility.
B2B eCommerce business models have been growing in popularity as the orders are usually more significant than if one sells to regular consumers. These orders not only bring in more profit, but relationships are also generally easy to maintain.
Perhaps the only downside with this model is the high startup costs required. If you’re selling in bulk, it’s also likely that you’d need to do so at a lower price.
Business-To-Consumer eCommerce Business Model
The B2C model is a rapidly growing sector that’s the traditional way of selling products or services to customers. You don’t need extensive capital with this model but you need to make sure that you’ve got an attractive store interface and great customer service.
With this particular model, however, your company would need to stand out – either in the product or service provided due to the sheer number of eCommerce stores online now. Competition is fierce and you’d need to ensure that your customers don’t end up switching to another service provider.
Consumer-To-Consumer eCommerce Business Model
The C2C model is one of the lowest-cost eCommerce models and it’s easy to grow a customer base through this model with platforms such as eBay. It’s not difficult to start this particular model as there are typically platforms already in place that you can use with ease.
Not much time and effort needs to be invested into marketing with this particular model, but since you’re utilizing another platform as the middle-man, you could run into issues with payment and website functionality.
Subscription eCommerce Business Model
With this particular business model, you’re looking at companies such as Netflix and Spotify. Your customers pay a certain amount for a period of time and they gain access to digital products.
This model is popular with customers as they have the flexibility and can subscribe and cancel at any time. It’s also a lucrative model for you since you can set prices low and increase them over time if you’re doing well.
With this model, however, there are high expectations as customers expect the product selection to constantly evolve. If there’s a lack of choice or if things aren’t up to expectations, customers can easily cancel and look for something else.
Choosing the right eCommerce business model
There are a few eCommerce business models for you to choose from, and it can be difficult to figure out which one would suit your products or services the best. If you’re not sure, do some research and draw up a pros and cons list and you should be able to find the best model for your company in no time at all.
