We listed out the various Business Models in the previous post. Today we talk about how to choose which is a good Ecommerce Business Model for you…
For the most part, people go into businesses like the image below, with their eyes shut tight. As a result, the rate of success in startups is abysmal – as low as 5%.
Here are a few aspects of various Ecommerce business models that you need to consider.
B2B business: This is your Business selling to other businesses. Usually the dynamics of B2B are different from that of selling directly to end consumers. There is normally a longer sales cycle as well as negotiations on pricing and service terms etc. Depending on where you are located, businesses also are averse to paying upfront for services rendered. You may have to wait a certain period before you get paid. On the plus side, your order size may be much bigger than usual.
B2C business: Much easier to deal with smaller order size. There is no negotiation since the customer hardly ever sees you or talks to you personally. Business takes place entirely over the web (sometimes over the phone). Though order size is smaller, payment is instantaneous.
Sell a product: You could sell a product. Selling a product is easier – as it is much more scalable. Product could be something simple costing a small amount or something quite expensive such as diamonds and jewelry. How easy is it to create a product yourselves? Are you planning on reselling a product after buying it at wholesale price?
Sell a Service: This takes more selling than a product business. The customer needs to be convinced of your ability, authenticity, authority etc before he pays money.
Sell a mixture of both: You may sell a service or a product as initial lead – and then continue with selling the other type. For example, if you sell a TV or an Air Conditioner, you also sell extended Warranty.
Aggregator: Offer a listing of different services of a type and easier ways to utilize such services. Charge money from both customers and vendors of such services.
Ad Supported: Offer a listing as well as quality content – then display ads using Google Adsense or other services to make money from others who will pay to display their ads to your visitors.
About the Author:
Deep is a respected Ecommerce Entrepreneur and Consultant – currently CEO of an Ecommerce Startup. He is also the founder and Chief Executive at International School Of Success where he trains new entrepreneurs to set up and run their Ecommerce Business from Scratch. He is a Technology & Marketing veteran of nearly 20 years experience having built multiple websites as well as businesses in India and abroad. His one day classes for entrepreneurs are a hit with startup founders who want to get going in a hurry – while minimizing risk of loss and failure. Want to start doing SEO for your website? Go to Deep’s website at http://ischoolofsuccess.com and download the Basic Search Engine Optimization e-book for Free!