WHAT IS E-COMMERCE BUSINESS MODEL?
The term e-commerce is very familiar to the ears. Isn’t it? It is commerce merged with the internet. E-commerce business model describes the process of buying and selling over the internet. In this model, businesses tend to sell their products on the internet through their brand website or another online shopping website.
E-commerce business model is just a technical term for the daily online shopping we do. The rise of technology has changed the whole process of buying and selling. There are so many businesses that have entered into the e-commerce business model by building their website. The small retail stores who don’t have their website, sell their products on other big online shopping sites. One of them being Amazon.
Classification of E-commerce Business Model:
Some essential e-commerce business model classification is drop shipping, wholesaling and warehousing, white-labeling and manufacturing.
The drop shipping is a retail model where the business doesn’t need a budget for fulfillment costs. It can partner with a wholesaler who will stock the inventories of the company and directly deliver it to the customers. The business needs a website displaying all the products on the internet.
The wholesaling and warehousing business model is appropriate for businesses with huge investments. In this model, the companies directly buy products from the manufacturer or the middleman. They store these products in a warehouse and sell them at a profitable rate.
Whereas, white-labeling and manufacturing are appropriate for a business with almost no investment for production. Companies, in this model, outsource the production and sell the products with their brand name.
TYPES OF E-COMMERCE BUSINESS MODELS:
There are types of e-commerce business models to serve different are categories of customers.
B2B Ecommerce Business Model:
This ecommerce business model focuses on selling products to other businesses. Generally, online marketplaces and SAAS companies follow this business model.
B2C E-commerce Business Model:
This model is just a digitized version of traditional buying and selling. In the B2C business model, businesses focus on selling products to the end customer. Retail e-commerce stores, social shopping websites like Amazon, Flipkart work in this business model.
C2B E-commerce Business Model:
This business model is the direct opposite of the B2C business model. Customers sell their products to businesses in the C2B business model. Some of the good examples are websites taking freelancing services like Upwork.
C2C E-commerce Business Model:
In this model, the buyer is a customer and the seller is also a customer. One of the good examples is OLX and Carousel. On these websites, both the seller and buyer is a customers. Also, it helps you get rid of your old or not in use stuff and someone else gets to benefit from your sold products.
Technology has shaped a lot of things, and e-commerce is one of them. This business model helps businesses expand. Businesses can build their market and reach out to customers all over the world.