If you want to earn a healthy living by using the Internet, like selling stuff and services online, you will face many problems. However, you can run an eCommerce business by developing an eCommerce application and selling online. Numerous eCommerce revenue models are available to choose from, bringing your business sustainability and getting you maximum profit. You also can get your own eCommerce application by developing an eCommerce mobile app.
In this article, you will get some information on various e-commerce models. Of course, none of the models below are superior to any other, but these models describe the nature of the business. For example, if the transaction is between a customer and a business entity, then the transaction is either B2C or C2B.
You can classify the e-commerce models broadly into three primary categories. These models are based on business classification, e-commerce model based on a revenue stream, and product revenue model.
Let us explain these three models and their sub-categories briefly.
E-commerce model based on the business classification
Under this grouping, there are mainly six different models:
1. B2B e-commerce model
Your business model is B2B or business to business model if the transactions are done between two different business entities. For example, a business makes a deal with another business; it is B2B (Business to business) model.
In this kind of model, your primary customers are other businesses that will utilize your products or services to start their own business (it could be either online retail or that traditional brick-and-mortar store).
A few examples of this model include a furniture company, a computer software company, or an electrical company. Any business that wants to build a physical setup will need them to set up their infrastructure.
2. B2C e-commerce model
B2C e-commerce, also called the business to customer model which can be best described as the traditional e-commerce business model. In this model, a company sells its products or services directly to the consumer through an eCommerce mobile app or a website. Any e-retail store is a perfect example of this kind of business model.
You will find that most of the eCommerce app development work is being done for the B2C business models, which turns out to be a very profitable business method.
3. C2C eCommerce business model
A C2C business model is a business model which does not include any business entity but only consumers. This model includes only end-to-end consumers. For example, a customer sells its product to another customer, which is a C2C transaction.
These types of transactions are usually seen as second-hand deals. Like if a person wants to sell his used car, and another customer is interested in buying that car in a second-hand deal, then they have made a C2C transaction.
eCommerce mobile app like OLX, Quikr, etc., is designed for C2C transactions. Almost all of the transactions made on OLX and Quikr are C2C transactions.
4. C2B e-commerce business model
C2B or Customer-to-business business model is a rare business model in which a customer sells its services to a business entity. A business entity availing services from a customer! Strange! Isn’t it? This type of business model is usually seen in affiliate marketing programs. A customer can put any business ads on his blog or website and earn a commission for redirecting traffic or making sales on that business entity. The business entity will happily provide commission, as the customer has redirected his traffic to their website and made sales.
So, these C2B transactions are done between any eCommerce business entity and an affiliate marketer who drives their traffic to that eCommerce business.
5. B2G e-commerce business model
B2G or Business-to-Government business model includes transactions done between a business entity serving the Government. For example, if a business entity sells its services or products to the Government or any Government agency, it is called a B2G transaction.
An example of this business model is any software development company that provides its services like eCommerce app development or other services to the Government. It is a B2G deal and falls in B2G transactions.
6. C2G e-commerce business model
C2G or Customer-to-Government business model includes any services for which a customer pays to the Government like paying taxes for water, electricity, or anything a consumer pays to the Government, is C2G deal.
One such example is paying toll taxes to drive on the national highway or paying for the government’s electricity.
E-commerce model based on revenue classification
Under this, there are multiple subcategories, some of which are as follows.
If you have the capacity to invest a huge amount of money, then this e-commerce business model may suit you.
In this business model, you store many products in your warehouse. Then, whenever an order is placed with that online retail store, you will sell that product directly from your warehouse to that online retail store, and that retail store will sell that product to the consumer.
In this way, your work is confined to inventory management as all the work for attracting customers and selling those products is done by your partner retail company.
This model is just like warehousing but in reverse order. In dropshipping model, you don’t have to keep any inventory. Still, you only need to maintain your eCommerce application on which consumers can come and look at the different products you are selling.
Any product selected by the consumer is shipped directly to their address through your delivery partner. This allows you to start your business with minimal capital as you don’t have to spend a huge amount of money on warehousing or inventory management. And you need to take care of your online retail platform.
3. Subscription e-commerce
In this e-commerce model, you have to deliver the products at a regular interval for which the consumer has subscribed for a particular subscription fee.
Some products are needed at regular intervals. Like food products or grocery items. These products you will need every week or every month so that you can provide those regularly needed items as a subscription.
eCommerce as per product model
1. Single product model
Many reputable brands offer a single product model through easy retail store sites. In this model, a company or a business entity runs solemnly on a single product.
2. Multiple product models
This model is just the opposite of the single product model, where you can sell as many products as you want. While this may look more profitable than the single product model, it also leads to more complicated inventory management problems.
3. Affiliate product model
In this e-commerce product model, you will have to provide commission fees to your affiliate marketer if he successfully redirects a customer to your online business store. That customer makes a business deal with you. So, overall you are paying the affiliate marketer for driving customers to your website.
So, these were some of the eCommerce models that can earn great revenue. Developing an eCommerce app for your business is one of the latest trends in most businesses to make their business global and earn a reputation worldwide.