ECommerce Business Models That Really Work Right Now

Business / Thursday, December 17th, 2020

ECommerce in 2020 has seen a huge leap in terms of growth and progression due to the increase in online transactions. While some of this growth can be attributed to the massive scale of lockdown due to the pandemic, it’s also due to the growing ease of online business and the cost-benefit.

While it’s tempting to start your eCommerce business, very few business models actually work, but that does not mean that all is lost. These are the top 4 business models that actually work in eCommerce right now.

B2C or Business to Consumer Model

Business to consumer is the biggest and the largest market space in eCommerce right now. This primarily includes businesses selling to end-consumers or individuals directly. This is also the most traditional model of business where companies sell to the consumers, and you can do that using only online sites as a platform. While this is the most lucrative and biggest market space, there are also challenges, such as huge competition, product differentiation, changes in tastes, and the preferences of consumers, etc.

B2B or Business to Business Model

Finance for Your eCommerce Business

Before we discuss the other viable models of setup for eCommerce, one should also consider various options for financing. An individual should weigh the option of setting up an eCommerce platform by starting a Limited Liability Company (LLC) instead of investing in private equity and taking all the risk. You can find lots of information online about how to start a limited liability company or talk to a business owner if you know one. This will help reduce the risk taken to set up your e-commerce business.

Business to Business model is when two companies or businesses deal with each other. There are multiple ways in which a B2B transaction takes place; for instance, transactions that happen online between wholesalers to retailers, vendors to companies, and manufacturers to wholesalers or retailers are all, in essence, a part of the B2B model. While the volume of business is not as big as B2C, there is greater potential, targeted clientele, and less risk of competition and customer preferences. Also as businesses buy in large quantities, the B2B model is great for scalability.

C2B or Consumer to Business

Consumer to business is a business model that isn’t as well-known, however, if deployed with research and planning, it can reap huge rewards. In this business model, a company uses a consumer base and buys from those consumers, then sells the products/services to businesses. Companies and start-ups such as Fiverr are a great example of some successful eCommerce platforms that use this model.

C2C or Consumer to Consumer

C2C business models are those where a company facilitates consumer to consumer transactions where individuals can buy, sell, and transact with other individuals. The primary source of revenue for eCommerce C2C companies is by charging transaction fees, handling fees, shipping charges, etc. Most of the big eCommerce platforms, such as Amazon, Flipkart, eBay, and Craiglist deploy this kind of a business model where they buy goods from consumers and sell them to other consumers.

While these are the primary models that work today, many of the bigger eCommerce giants deploy a mixture of these models to reach their target audience, so you don’t need to stick to one single model. Analyze what will work for you and make sure you have the time, money, and resources to give your new business the best chance of flourishing.

Leave a Reply

Your email address will not be published. Required fields are marked *