Jul 20, 2022

Business Models of E-commerce

Amazon and eBay are both first movers in e-commerce world, but they are in two different models. eBay provides a platform as an intermediary on the auction between consumers, while Amazon provides a platform that sells products to consumer.

In order to properly position your company in the market and reach your customers in an effective way, you have to determine which business model fits you.

Types of E-Commerce Business Models

There are several types of e-commerce business models, including -

Business to Consumer (B2C)

Traditional sales model - most common and straightforward
Company directly sells their products or services to end customers through company’s online platforms
For example: Macys, Target

Business to Business (B2B)

One company (business) to another company (business)
To provide / exchange services, products, and information between companies (businesses) via online platforms
For example: Alibaba

Business to Business to Consumer (B2B2C)

Company (business) sells its products or services in partnership with another company (business) to an end customer through e-commerce platform
To extend the B2B model to include e-commerce for consumers
For example: HKTVmall

Consumer to Consumer (C2C)

Consumers can sell products and services to each other through e-commerce platforms
A type of business model that emerged with e-commerce technology and sharing economy
For example: Carousell, eBay

Online to Offline Business Model – Retail Trends

O2O, Online to Offline and Offline to Online

Through online marketing and advertising, like email, digital ads, social media to attract potential customers and bring them from online platforms to physical stores to make a purchase
To provide a more convenient experience to customers, e.g. buy online and pick-up in-store, research online and experience offline etc. and vice versa.
To bring customers of physical stores to online platforms through QR code, coupons etc.

OMO, Online Merge Offline

Recent development of O2O
To integrate online and offline consumption and synchronized update member information
To collect customer behavior footprints to achieve more accurate analysis and formulate more effective marketing strategies

Once you have determined your business model, you can then focus on building and optimizing your e-commerce premises, also, the entire operations process, including payment, order fulfilment, warehousing, inventory, and logistics, etc.

Are you ready to launch your e-commerce business? Or need some support in launching your e-commerce platform?