What are the Different Types of e-Commerce Business Models?

05/28/2021 2:47 PM
If you are planning to start a business, it is important to decide on a business model beforehand. The business model that you choose for your company will act as a focal point around which you can build your business plan. It will also determine the revenue generation strategies of your business once you launch your product or services to the marketplace. 

There are many different types of business models out there for you to choose from, and it is up to you to find the best fit for your business. You will also notice that many businesses have chosen to create unique business models that are combinations of other business models to cater to their specific business requirements and organizational goals. Let’s take a look at some of the common business models adopted by e-commerce businesses around the world. 

Marketplace Business Model 

In a marketplace model, you basically create a marketplace and set the stage for buyers and sellers to interact with each other through your portal. This is the business model commonly seen in e-commerce platforms such as Amazon. The main advantage of choosing this model for your business is that you will not have to worry about storing goods. You may, however, have to undertake the logistics and promotional activities on behalf of the marchants you onboard. You can find your perfect e-commerce website builder such as oOrjit to power your business.

Reseller Business Model

In a reseller model, you will see that the basic aspects are similar to those of a marketplace model. In essence, you create a platform for sellers to display their wares and interact with potential buyers. The logistics and marketing aspects are managed by the reseerls themselves, however, so you will not have to worry about such details. Utilize the features of a multi vendor marketplace software like oOrjit to create great reseller marketplaces for your end users.

Subscription Business Model

A subscription business model is used for virtual goods and services. A good example of this is Amazon Prime, which lets you access thousands of movies and sitcoms for a monthly subscription fee. The best part about such a business model is that it lets your users access any show they like at their convenience without having to store them. 

Freemium Business Model

This business model is commonly seen used by service providers such as YouTube. In this case, end users get access to a basic package with common features. If they want to utilize more features of the platform, then they will have to upgrade to a premium model by paying a subscription fee. This is a very smart business model as it gives your users time to get accustomed to your services and makes them want to pay for more.