You are now well aware of who your customers are, it is now the time to start thinking about how you would like your business to be structured, how do you know which business model or online marketplace is best for you? You have probably heard about eBay, Amazon, or Shopify, but how do you know what’s best for you. Choosing the best eCommerce model for you is the most important factor for long term success. You can choose a great product, a reliable supplier, or use the best marketing tactics but the foundation should be right. In this article, we will focus on the five best eCommerce business models which might be useful if you are interested in eCommerce business models. 

Dropshipping via the online store

If you have just started up your business or you can’t make an investment or want to build your own brand, dropshipping might be the right business model for you. You can either use any marketplace e.g., Amazon or eBay, but the fees and competition on these marketplaces may make it hard for the profits to be generated. The recommended way is to start up with your own online store. You can create this by using platforms such as Shopify. It doesn’t cost a lot of money and you can have your own platform away from the crowded online platforms. This model works by setting up an online store and listing your products for sale, making sales by driving traffic to your website, your supplier will receive a message upon any sale you make, You pay the supplier, supplier ships the item to the customer and then you can handle customer service.

Amazon FBA with your own brand

This eCommerce model is creating a private label product. This is a product that carries your brand but you source the product from the supplier and ask them to print your brand name over it. This type of model is the best for businesses that have money to invest, want to create their own product or brand, want to outsource their services, have hands-on experience with eCommerce, and who have a moderate tolerance for any risks. This model works by Creating a private label product, purchasing products in bulk from suppliers, sending products to Amazon for FBA service, listing products for sale on Amazon, and then making sales while letting FBA take care of the rest.

Wholesale sourcing and selling through eBay or Amazon

 This model requires wholesale sourcing, which means you negotiate with your suppliers to purchase supplies in bulk. This requires you to have enough money to make a large order and requires you to have a place to store your items bought in bulk. In this case, it is good to use a marketplace platform like Amazon or eBay and the fees will be paid using the generated extra profit margin. This model works by sourcing a great product from a reliable supplier, negotiating a win-win wholesale price, finding a place to store your stock, listing products on the marketplace of your choice and the customer service and shipping will be handled by you. This model is suitable for individuals who have money to invest in buying bulk stock, have a storage place, have the ability to confidently negotiate with suppliers, have eCommerce experience, and have moderate risk tolerance.

Wholesale sourcing and selling through your own website

This model is suitable for those who are willing to invest a great deal of time and money into building an online business. This is mainly used by major retail businesses and ecommerce website design companies. This is riskier than the other models because it’s not about only investing money, it is also about gaining online traffic into your website and actually making sales and developing or building your own website. This model works by negotiating a bulk purchase with a supplier, finding a place to store your bulk items to be sold, building your own online store, driving traffic to your website or online store, and now you have to handle customer service, inventories, shipping etc. This model is best suitable for individuals who have significant capital to invest upfront, who know how to build an online store, who want or are willing to take full control of the business, want to make a profit, and have a high-risk tolerance and lots of time in hand. 

Selling a private label product through your own online store

This model is the best when you are very serious about building your brand and want your business to make serious money. This model requires the most money, time, work, and effort. It requires you to create your own brand and a private label product to be launched and sold on your own online platform. This model is the most independent and gives rewards but also you have a lot of responsibilities. You have full control over the design and branding of your store without any restrictions. You are absolutely free to brand, market, design a website, and generate sales however you want. This model works by working with a supplier to create a creative private label product, organizing storage space for the bulk stock provided, Building your own online store with products for sale listed on it, Driving traffic and making sales and then you handle shipping and customer service. This model is suitable for individuals who have the capital to invest, know how to build and run a business online, are willing to have complete control over the business, and are serious about making the business successful.

Selling products through subscription

In this model, you identify what consumers need on a daily basis or monthly which can be convincing for them to subscribe to. The key point of the subscription model is that it is usable and finishes up i.e., doesn’t last forever. The model works by identifying what people want regularly or monthly, source a product from a reliable supplier, negotiate the lowest possible bulk price order, build a website and implement a marketing strategy and finally convince the customers to subscribe to it. The model is most suitable for individuals who want a regular income, have business experience, and are willing to work full time.