Best eCommerce Business Models and Strategies with Examples 

People had to go to physical stores or shops to buy things in the past. However, with the emergence of e-commerce, people shop from the comfort of their homes using internet-connected devices.

Getting your store online is the best way to market your products and maximize profits if you're a business owner.

Conversely, selecting the best e-commerce business model and strategy for your business isn't as easy as it seems. There are six different types of ecommerce business models, and it can be difficult to choose the one that suits your business.

In this article, we've carefully explained the differences and benefits of business models of e-commerce, making your selection very easy.

You might be wondering what are the ecommerce business models. eCommerce business models and concepts are the strategies businesses employ to sell products online. There are several ways startups operate to sell their goods and services, and it's important to adopt a model that best promotes your business.

Here are six different ecommerce business models and strategies suitable for getting your online selling started.

The Business-to-business model of e-commerce means selling goods and offering services to other businesses. In this model, your audience is usually companies who use your products or sell directly to the final consumer.

B2B requires lots of investing and huge capital as you'll be selling in large quantities. The model is commonly utilized by software e-commerce giants, including HubSpot, Salesforce, Survey Monkey, etc.

You can choose the B2B model if your business involves marketing to other businesses and you have the budget to maintain a bulk supply of goods.

If your business aims to sell directly to the end-users, then the e-commerce B2C business model is your best bet.

The business-to-consumer model is the most common e-commerce model, and it is simply selling directly to consumers online. Companies such as Alibaba, Amazon, and Walmart practice the B2C model.

You need to set up an online store and display the products you sell on the website. Then buyers browse through your site to place orders; you'll receive the orders, package the products, and deliver them.

With the B2C e-commerce business model, you can sell to people worldwide, and it doesn't require as much capital as B2B.

The consumer-to-consumer model is an emerging e-commerce business model involving buying and selling between consumers using third-party platforms.

You might want to sell a new or used product by listing it on a third-party platform, such as OLX, Craigslist, or eBay. Potential buyers will check and contact you to buy. This is simply how the C2C e-commerce model works.

The third-party platforms will only charge a little amount as commission for using their website.

Business-to-administration (B2A), also referred to as Business-to-Government (B2G), is a type of e-commerce business model involving companies and government agencies or public administrations. B2A companies are new ecommerce business models.

The B2A model enables companies or manufacturers to sell their services or products to government agencies by signing a contract, usually long-term. For example, a Saas company can sign a contract with the government to help maintain the state's military-grade web communications portal.

B2A strategies are good business models for e-commerce SaaS companies and other startups that render services to the government.

For freelancers and work-from-home individuals looking to offer their services to companies, the customer-to-business e-commerce model is a perfect choice.

C2B is a business model that helps businesses reach talents who can offer solutions or quality services. For instance, Upwork is a marketplace that connects freelancers and companies. The services offered include content writing, copywriting, graphic designing, web development, UI/UX designing, consulting, and many more.

The e-commerce model is slowly gaining popularity, and it helps individual customers set their prices and work with companies worldwide from the comfort of their homes.

Customer-to-administration, popularly known as customer-to-government, is another business model of e-commerce very similar to B2A.

In C2A, a customer conducts transactions directly with the government agencies by providing something of value via online means. This can be paying taxes, water, electrical bills, or something as simple as providing feedback on a government website.

Now that you know the differences between the different types of e-business models and strategies, selecting the best option for your business should be easy.

The next step is deciding which type of revenue model for e-commerce best suits your brand. Although this seems like a straightforward decision, it can also be quite challenging.

Here are the top six revenue models for e-commerce.

Selling your products directly to customers helps you cut costs by eliminating middlemen.

The direct-to-customer model is a great way for online stores to build a loyal relationship with customers, and you can easily customize your customer experience.

Online retailers like Warby Parker, Glossier, and Casper practice this type of e-business model.

Wholesaling is an e-commerce model and strategy that involves selling goods in large quantities to businesses at a discounted price. This model is common to manufacturers and online retailers.

Venturing into wholesaling requires huge capital and large inventory. However, the model has high risks and thin profit margins. Many B2B brands and a few B2C companies apply this business strategy.

Want to sell products without holding inventory? Dropshipping is your answer.

Dropshipping is an e-commerce revenue model that allows you to market and sell items by acting as an intermediary between a buyer and a supplier. You eliminate the costs of holding inventory, warehousing, and shipping.

You can set up an e-commerce website and display products of different brands with your own added price. When a buyer places an order, you notify the supplier who handles the tracking and delivery of the product, then you gain a commission from the price.

You are only responsible for running ads and getting traffic to your e-commerce site.

A subscription-based e-commerce revenue model enables customers to buy and subscribe to a service or product for a defined period - usually lasting for a month or year.

Most software companies adopt the subscription e-business model, including Website builders, Payroll software, Accounting solutions, and many others. The model is not limited to Tech giants only, as e-commerce giants like Netflix, Blue Apron, Amazon Prime, and ButcherBox also use the model.

However, the business model doesn't apply to every business line; it works well if you're in the fashion, food, pet products, movie, or beauty industry.

eCommerce enables online store owners to expand their business and also maximize profits. You can increase your business's profitability easily by using an e-commerce business model that aligns with your brand.

Here, we take a look at some of the benefits of business models of e-commerce.

Most business owners spend a handsome amount of money setting up their stores. You have to pay your staff, foot electricity bills, pay rent, buy stock, and manage product delivery.

With e-commerce, you can eliminate operating costs. Set up an e-commerce website, promote your products, and make profits at minimal costs.

A single brand website is a dedicated website that only promotes an individual brand's products and services.

When setting up your e-commerce store for the first time, a single brand website is best to start with. Your website displays only your goods and services, and you can sell directly to buyers without any intermediary.

With a single-brand website, you have more control over the pricing and branding of your business.

Affiliate marketing is a marketing strategy whereby businesses permit individuals to promote their products for commissions on the sale's price.

The seller is known as an affiliate marketer. For this to work, the affiliate marketer sets up an affiliate website to promote the owner's products. The affiliate marketer only gets rewarded a percentage of the product's price whenever a sale is made.

Software as a Service, commonly known as SaaS, is a cloud-based platform with intuitive features that helps e-commerce website owners manage their online store properly.

It is easy to set up and doesn't require any technical learning curve. SaaS e-commerce solutions offer businesses responsive customer support, security and PCI compliance, integration compatibility, and lots of marketing tools.

The key to success in your e-commerce business is selecting the best and hottest products to sell.

The most common form of e-commerce business is selling physical products. You can have a physical store and still set up a store online. Depending on the amount of stock you have, customers can place orders on your online store, and you'll deliver the products to them physically.

This can also be applied to rendering services. Customers can book a session online, and you'll fix a date to render your services to them.

The lifeblood of any online business is a set of responsive customers.

Prior to kick-starting your e-commerce business, you need to define your target audience. Are they private individuals or government agencies? Public administrations? Or other businesses? These are questions you need to answer before venturing into online selling.

Lastly, you need to know your standing in the e-commerce market to gain ground quickly.

Do you know what your place in the e-commerce market is? You have to know your competitors and devise means to edge over them. Knowing your market position allows you to make proper preparations to attain a competitive advantage.

The e-commerce market is enormous and there are so many examples of e-commerce business models.

There are popular e-stores like Amazon, Aliexpress, and Walmart. There are also streaming platforms like Netflix, Spotify, and YouTube.

Furthermore, some e-businesses serve as marketplaces for connecting freelancers and companies, such as Upwork and Fiverr. Lastly, there are tech giants like Microsoft, Apple, and Samsung.

The e-commerce market has undergone tremendous transformations over the last couple of decades.

The industry has grown from selling physical products to digital products, software, and other human necessities. With e-commerce, people can get what they want easily without hassle.

Small-time businesses such as Amazon and Walmart have grown to become internet giants with millions of products available and millions of transactions yearly, making the e-commerce market worth trillions of dollars.

Despite the immense potential and incredible worth of the e-commerce market, it isn't so easy to thrive in the sector.

Although there are many successful e-commerce business models, it can be difficult to achieve such heights without a proper plan and strategy. Businesses face lots of competition in each niche, and according to forensics, most startups fail in their first ten years. The failure results from a lack of knowledge about the business models and inadequate capital to maintain the business.