Types of e-commerce business models

Before diving to the types of e-commerce business models, let remember. From the definition we gave in our post here, we know that an e-commerce is a sum of buying and selling activities made online. Here we are gonna list the types of e-commerce that we can have online.

1. Online store

So, this is the most known of all the types of e-commerce business models. An online store or shop is a website that you create to display your products. It can be physical or digital products. The visitor will come and check your products and can purchase directly from your store.

types of e-commerce business models

An online store can sell as a B2B and B2C

– Business to business (B2B).

It is the likes of Alibaba. The online store acts as a middle man between manufacturers, wholesalers, and businesses.



The manufacturer always sets a minimum ordering quantity. So, you can not buy a single item in a B2B, unless you order a sample. And usually, the price will be quite high for that.

The biggest advantage of B2B business is the possibility for the buyer to make deals without traveling. Because sometimes the requirements and cost of traveling can seriously increase the selling price.

The con will be to buy a product without seeing it. That is why ordering a sample is very important. And make sure to get a supplier with a good reputation and insurance.

– Business to consumer (B2C)

Business to consumer is so vast nowadays. Because, it is so easy to do. There are several types that you can start from the comfort of your home and make a decent income.

Create a store in an online mall:

you can join an online mall such as Amazon or Jumia. Open your store and start selling. They will take a commission out of your sales for their services.

They have the option for you to give them your inventory and they will be processing the orders on your behalf. It is fulfilled by Amazon (FBA) program. And this makes it even easy for you to run an online store and continue with your daily life.

In sum, you can order your merchandise from Alibaba with a manufacturer price, have it ships to your place. Check your merchandise. List them to your store and ship them to Amazon. And all you will have to do is check from time to time how your shop is doing.

Get your own store:

You can set up your own store from start to finish. With WordPress and woocommerce plugin, it is very easy. You will need to set up your store with the products, payment gate away and shipping information.

types of e-commerce business models

Creating your own store demands a lot of money and you will need a team to manage your store. You will need to get a contract with a shipping company, to have a business license, have an inventory and fill all the legal requirements.

But when you do have a store in a mall, you do not necessarily need to fill all the legal requirement, you can be taxed on it as revenue. So, you will not also benefit from the legal advantages given to a registered business. You can also create an affiliate store.

Dropshipping store:

Because creating a store from scratch required a lot. Many choose the dropshipping model. It is cheaper as we saw in this article here. You do not need to get an inventory, you can use ready-made platform and software for dropshipping like Shopify, alidropship or dropified.



You can also dropship using your own brand. So, manufacturers give that opportunity to have the products you are selling branded with your store name. And your store address, this increases also the trust of your customers to your store and brand.

So, instead of the manufacturer or supplier shipping your orders with no label, as usual, they can do that for a fee.

Start a print on demand store:

Are you a good artist? Yes. Then you can create a great design for t-shirts and other printable documents.

Here also you can choose to create your own store and take care of everything from start to finish. Or, you can choose to join an online mall to display your products. But, in this case, you will not use The fulfilled by amazon program. Because, you can use their print on demand system. So, all you will do is submit your designs and they will do the rest.

You can also do that on Etsy mall, with printable or printiful. You will fill your store with your designed products. And every time you get an order, you will submit it back to printiful or print on demand. They will process the product and ships to your customer with your brand and address.

2. Consumer to consumer

This e-commerce business model is growing every day. Especially with bloggers and social media influencers. It can also apply when the transaction is done solely between consumers. This is well-known for an auction website, where you can sell or buy used things directly from their owners.

Bloggers:

The biggest way for bloggers to make money is via affiliate marketing. What happens is that, after using a product they share their recommendations and opinion about that product. The people visiting their blog get that opinion and may choose to buy and use the same product.

They usually share links about the product in their post or somewhere within the blog.

types of e-commerce business models

– Influencers:

Similar to bloggers, social media influencers, share their opinion and recommendation about a product. But, the biggest difference is that with social media, you can show and tell. Awesome sales have been made, after a live video. The influencers show exactly how the product works and how to use it well

They will share a link to purchase the product and usually, it comes with a good promotion to help the client to make a decision fast. You can read more about it here.

– Auction website:

Here we shall take the example of platforms like e-bay and Craiglist. They both have the particularity of helping consumers get products from other consumers at a better price. Most of the time it will be used products but you can also get brand new ones too. They have an auction on some products too.

3. Subscription website.

It is a member-only website. Based on a monthly or annual fee, one can get access. You need to offer value within your website if you want to get members. Like with wealthy affiliate which is also a subscription website, you get tons of value. From training to the community support, take a look at its review.

But, it can also be a newspaper or magazine subscription website. Because, today people want to read on their phones or computer. They want to travel and still be able to get their local newspaper publication. So, a subscription website can really be a good idea if you have a publication business.

Creating a subscription website was very technical. Now, software filled the market. Today you can create on your own. And it will be able to help achieve this:

  • register new members
  • process monthly dues and set up recurring payments
  • update members profiles in one centralized database
  • email members with invoices, reminders or any other notifications
  • make your website responsive for mobile usage

3. Booking website

Are you a hotelier? or do you want to be a travel agent? Those are the main business which requires booking website.

You can create your own. There are so many templates you can use to create your booking website. And you can choose to create a hotel booking website only. Or you can create a hotel and flight booking website. And, once you have your template, you can fill your product, choose a payment method and you are set. Do not forget to have a translation option in case you want it to be international.

booking site

Traveling has been made easier with a price and the possibility to travel without a visa for so many countries. So, people are ready to travel and visit foreign countries. That is why the traveling industry is now one of the most lucrative industries in the world.

So, here also if you only have few rooms to rent or more, you can join big platforms. Like booking.com or airbnb.com. You can list your rooms there and pay a commission on your sales. It gives you the opportunity to list when you need to, during the high season especially and to remove it when you want.

4. Classifieds website

A classified website is a form of advertising. And it can be free or paid. Read more here. A classifieds’ website allows anyone to place an ad. We have a website like olx.com, where people place all sorts of advertisements.

Basically, you will be the place where buyers meet sellers. But, you do not associate with the transaction. They can agree on the platform and meet physically to conclude their deal.

It is best to start a free classifieds’ website and with time as you grow your brand. And, when you get a steady monthly visitor, you can create paid ads to make more money.

There are also many templates to help you create your classifieds’ website and start your business.

Conclusion of the types of e-commerce business models.

The types of e-commerce business models presented in this post are all good money maker option. Each one of them requires a lot of work to achieve success. And a lot of patience to get it right. The beauty of e-commerce is that you can do it from anywhere you are, all you have to do is start now.

Thanks for reading and leave your comment below.

 

12 thoughts on “Types of e-commerce business models”

  1. I’ve read your post which I love online business and your post is shot in the post. So, the post is very helpful. The online business world is getting very popular. As a result, buyers are able to meet the needs of the house because they can go online and order their products and find the order.
    In order to do online business, you have to open an online store and serve some people because the cost of consumers will be reduced and the suppliers will provide it to the customers so that the first suppliers need to be engaged in business hours. Businesses can easily benefit online, and seeing your post will be an online business that will benefit everyone
    Thank you for sharing such a post.

    Reply
    • The beauty of online business is also to break the barriers between manufacturer and buyer.

      thanks

      Reply
  2. Whao, these are amazing options on e-commerce business. I know about Amazon store and am currently going through their training in order to become their certify business promoter. I can open store with them and at the same time become their affiliate marketer. To build online shop is not eco-friendly. But , I understand that there is no cheep Success. that is why I want to open shop with them which just requires some token and valid I.D card. If we can really afford the money, business certificate , I think to build online shop from scratch is more recommended. This is just my own point of view. Only that time and commitment must be put into it.

    Reply
    • I agree with you. Creating your own e-commerce is better and gives you more advantage. You can be able to create and grow your business freely without fear of being banned or that your host’s platform may close.

      thanks

      Reply
  3. I just bookmarked your website. It is very well written about the options to make money online. I am an irregular travel blogger and do blogging by hobby. I like the bloggers’ affiliate marketing option mostly, because it needs the lowest investment (though need highest hard work), and my second liked option is dropshipping e-commerce. But I have seen most of the dropshipping e-commerce platforms are very expensive. Additionally, you never know when your product will be starting to get sold.

    What is your opinion? Which option do you think the best?

    Reply
    • I think any of the two can help you make money online, I wrote a post about that and you can read it here to get a clear view of the subject. Affiliate marketing is undoubtedly the cheapest option as we saw in this article, but it’s required mastering SEO strategy. Because it is based on content marketing, you create content about the affiliate product and you will need to be consistent with your blog.

      Reply
  4. Thank you for this great post my friend.I never came across such detail clear explanation about the types of e-commerce business models.I now start to understand these online marketing models.

    Just a question my friend.Is this e-commerce business models be operated in the developing countries or just only in the developed world? 

    Reply
    • The beauty of internet is that you can set up your e-commerce from anywhere and sell to people all over the world.

      I have seen people creating dropshipping store in africa with aim to sell in the USA market, because they are the biggest market for e-commerce. And you can see how your local market is, are people use to online business, do they trust e-commerce? For me it is a bit easier to get into the local market because there is already a good online mall operating locally, so people are already use to buying online, even if majority of the time they want pay on delivery. I still manage to find some clients. And once they liked the products and services, they always come back and bring you new customers too.

      So, it is really up to you to create your own customer base.

      Reply
  5. Very helpful post. You have covered the types of e-commerce quite well. I think that a combination of a online store and blog would be ideal. The blog will cover subjects related to the items offered in the store. The blog wil establish know, like and trust, thus creating loyal repeat customers. It is possible to earn $100,000 per year with such a combination?

    Thanks

    Reply
    • Yes that is a great combination to make. And you will even see that all the big website has a blog area, because the blog will help you create SEo friendly content and rank. The store area also will benefit from it, by getting more traffic.

      Reply
  6. Very informative article. Most of all models for an e-commerce business is covered. It would be helpful for me if some links to such a business model given here as an example, Particularly in “Booking website”.

    For me, there was confusion on the C2C model. After reading this article it is clear now. 

    Reply
    • For a booking site You will need to acquire a white label as an affiliate product, but your website needs to be getting lot of traffic before they accept you. It is a very competitve business.

      Reply

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