All types of e-commerce are Thriving and Experiencing Increasing growth. Sales from online stores are expected to increase by 385% in the next 10 years.
Choosing which type of Thriving e-commerce is right for you requires intuition, market knowledge, a solid business plan, and careful research into products and business models. But it is easy to overcome these obstacles, if you have knowledge of how to create e-commerce projects and the different types and forms of e-commerce available.
types of e-commerce
E-commerce includes all types of online transactions that link the buyer and the seller, and the Internet is used to process all electronic transactions in it.
The first thing to think about is the type of e-commerce you Intend to do. When you think about how you want to sell online, who do you see yourself selling to? Will your business type be B2B, B2C, C2C or C2B?
Do you have a type of e-commerce that you have been thinking about for a while? Do these Abbreviations make your head spin? let's take a look At the most common ways business transactions Occur online to understand what type of business you want to do and which is right for you.
Business to Business E-commerce: (B2B) Business to Business.
This type of e-commerce (B2B) Focuses on Providing products from one business to another. Most e-commerce sites of this type sell services, such as software companies, office furniture, supply companies, document hosting companies, and other e-commerce business models.
Examples of Well-known companies that practice this type of 'B2B' e-commerce include: ExxonMobil, Chevron Corporation, Boeing, and Archer Daniel Midlands. These companies have dedicated e-commerce platforms for companies, and work Directly with other companies in a closed environment. B2B e-commerce projects usually require more money to start up.
Business-to-consumer (B2C) e-commerce
This type of 'B2C' e-commerce is what most people think of when they imagine an e-commerce company. This is the largest market, and many of the names You'll see here are Well-known companies off the ground. 'B2C' e-commerce sales are the traditional retail model, where a company sells to individual shoppers online, but the purchase is made online rather than in a Brick-and-mortar store.
Companies adopting this type of e-commerce (B2C) are everywhere. Such as: Carrefour, Walmart, and BIM.
This type Emerged with the rise of the e-commerce sector and the increase in consumer confidence in online businesses. This model of e-commerce sites allows customers to trade, buy and sell products for a small commission paid ‘Affiliate marketing’. SUBSCRIBING to C2C sites is Somewhat difficult.
Despite the apparent success of some platforms such as 'eBay' and 'Amazon Associate', many other 'C2C' Websites were quickly shut down due to Breaches and lack of credibility.
Consumer-to-Business (C2B) e-commerce
C2B is another model of e-commerce that most people don't know about, but its Popularity is Increasing. This business activity Occurs when a consumer sells goods or services to businesses, almost similar to selling a sole Proprietorship to a larger business.
'Reverse Auctions', 'FREELANCING' sites such as Upwork, and other Well-known Monetization Strategies Through Blogging such as 'affiliate Marketing or AdSense'. They all fall within this category of e-commerce.
The best ways to start e-commerce
The next most important thing that you need to think hard about is: how to handle inventory and source products. Some people love the idea of making their own products and others hate the idea of having their house full of boxes.
Dropshipping
Dropshipping is considered one of the simplest types of e-commerce, because all you have to do is create a storefront and take money from customers through credit cards or PayPal, and the rest is up to your supplier. This relieves you from storing, managing inventory, and dealing with shipping and packaging. But dropshipping also has disadvantages, such as the inability to control quality.
If suppliers are slow, product quality is lower than expected, or there are problems fulfilling orders, you are the one who bears the burden of all these problems and customer reviews will be on your account.
Most people who work in this type of e-commerce use Shopify and Spocket. Because these platforms are fast and inexpensive. A popular model is to set up a store quickly and drive traffic using Facebook ads.
Wholesale
Wholesaling in e-commerce requires a lot of investment up front, as you will need to store the item, manage inventory, track customer orders and shipping information, and invest in the warehouse space itself.
For example, ‘DollarDays’ is an online wholesaler. This site provides a huge product catalog that includes more than 260,000 products. They use the strategy of retailers in this field, by offering wholesale prices and retail prices, so they can sell to the general public and to retailers. Which gives them a higher profit margin than the wholesale model.
Wholesale trade depends on volume. You'll therefore need to push products to eBay, Amazon, and Google, and BigCommerce offers all of these services on the 'basic' plan for just $29 per month.
Manufacturing and brand creation
If you have an idea for a great product, but don't have the money or desire to build your own factory, this may be the type of e-commerce for you.
You send the specifications of the product you want to manufacture or a prototype of it to a manufacturer that contracts with it to make the product with the specifications that meet the customers’ desire, and it can either ship the product directly to the consumer or to a third party such as Amazon or to the company that sells the final product.
On-demand manufacturing allows you to quickly change suppliers if you encounter product quality problems. Start-up costs are minimal, and if you are interested in opening your own production plant later, this is a good way to test a new product or idea.
White Labeling
White Labeling’ is similar to the previous type. You choose a profitable product that has already been successfully sold by another company and offers the possibility of 'white labeling', you design your own product, and then you sell. This is common in the field of fitness and beauty, but rarely found in other fields.
The biggest problem with ‘White Labeling’ is demand. You're stuck with whatever you order, so most 'White Labeling' companies set a minimum production quantity. Consider this hurdle when you're willing to work full-time on your project and know your product is in demand.
Subscription
The subscription-based e-commerce model allows users to purchase a service and then subscribe to it for a specified period (usually monthly or yearly). Once the subscription period expires, users can either terminate or renew the contract. There are very popular online stores, such as Microsoft, Shopify, Amazon Prime, and Audible, that operate this type of subscription-based e-commerce.
How do you choose the right type of e-commerce to start?
It is very important to make the right decision when choosing the best types of e-commerce. Why? Because once you choose, you will invest your money in it, as well as your time and effort. Therefore, it is important to ask yourself some basic questions before choosing, and here are some of them:
- What you will sell and how much you will sell for.
- Are you going to sell one product or do you want to sell a range of products.
- Who is your product targeting? Who is the audience you want to sell to?
- What does your audience/potential customers want? What will their expectations be?
- What factors will you compete on? (Price, quality, selection, service, value you add, or something else).
Answering the above questions will give you a clear idea of which type of e-commerce is right for you, and which will work best for your online store.
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