What are the different types of e-commerce businesses with examples?
Last Updated | August 22, 2023
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How you used to shop a decade prior, just give it a thought.
What was your shopping style? When there was a need to get new things, how do you manage to purchase groceries, clothes, crockery, Home Appliances, etc.?
Today, e-commerce businesses have modified the world’s shopping style; only making it more convenient.
In the year 2013, 6% of retail sales were made up by E-commerce businesses in the U.S, and it reached up to 9.9% by 2018. Specialists predict that in the U.S.A market e-commerce sales will reach 14% of total purchases.
Today, it is much simpler for innovative founders to bring their ideas into reality. As we see new ecommerce ventures being opened up across the world every year.
There are rapid enhancements and improvements in tools, while the standards remain the same. If you are concerned about how to meet today’s expectations, you will have to understand your business model well and characterize how you will initiate.
This article is all about the e-commerce central business models, few examples are mentioned of trend-Setters and the standards of the e-commerce business. So, let’s get started…
Explain the types of e-commerce websites?
Ecommerce websites come in different shapes and functions. From transaction sites making online sales to content-based sites that rely on advertisements, the ecommerce industry offers different monetization options and different types of ecommerce websites that are suited for different business moles. Some of the major types of e-commerce websites include;
– Transactional Site
Transactional sites are kind of websites which provide the facility to its customers to make online transactions, these sites can be like an electronic store-front for retailers or business owners, or a showroom for manufacturers that are willing to sell directly to its customers. People who shop online are well aware of this type of website. Transactional sites allow its users to do the following things (a) make complete financial transactions using e-payment method (b) empower clients to search their desired product, request, and pay for items via online payment gateways (c) allows the customer to contact administration for any query after-sales. Most of the transactional sites make efficiencies via consistently merging the transactions process with back-office frameworks, for example, inventory, logistics and fulfillment, accounting, advertising, customer relationship management (CRM), web analysis and statistics, and many others.
– Static Content Site
Static content sites are generally focused on the spreading of product information, services, or contact details that how can you process a purchase. These sites promote corporate awareness to its customer rather than provide online transaction facilities. Since the site is based on a static platform instead of a dynamic platform, so, an online transaction system is not necessarily needed here. It is cheaper, less complex in design, and its maintenance is quite easier than any transactional sites. Information delivery websites are ideal for organizations that market services and products that can not give on the websites.
The website allows the customer to shop online at the best cost from competing sellers that offer similar items, for example, authorized vendors of Honda America. The product details are mentioned on the website among various similar products helps the customer to choose, visualize the specifications, and get an idea of the expected price for a vehicle.
Online Marketplace or Auction Site
These sites are hosted platforms that bring buyers and sellers together to facilitate transactions. Participation on one of the sites often provides an efficient way of finding a customer without the expense of building a proprietary transactional website. Types of sites include auctions (www.eBay.com), sites for local artisans (www.etsy.com), sites for retailers and wholesalers (www.Amazon.com and www.Alibaba.com), and matching services (www.buyusa.gov).
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Online marketplaces and auction sites are a good venue to get started in e-commerce. However, the Department of Commerce recommends that a business explore its options regarding online stores before it relies solely on such marketplace and auction sites for its long-term e-commerce strategy. Some 70 percent of e-commerce sites in North America will be dependent on services (such as shipping, payment gateways, and fulfillment) from Amazon or eBay by 2017.
Some examples of online ecommerce marketplaces are these:
- Amazon is an online marketplace on which businesses may set up a store and offer products within strict rules. Amazon offers several monthly plans for merchant stores.
- com, which is now part of the global Rakuten.com, is an expansive online marketplace that receives heavy traffic.
- eBay owns PayPal payment services and the Magento on-premise e-commerce platform solution. Subscription rates and fees vary by plan.
- Etsy is the largest online marketplace for handmade and vintage items; it is best suited for artisan and craftsman type unique sellers.
- com is a free marketplace operating specifically with the small business owner in mind.
Difference between types of e-commerce models and business
DropshippingDropshipping is a growing way of making money. Any person or business can sell the products on a website, which they do not own by using the Drop-Shipping method. The dropshipping method involved three parties i.e. seller, buyer, and manufacturer. The products are packed and distributed by a third party. The individual or business owner never come into the contact with a single product, they just keep their small margin from the person or person who is manufacturing and disturbing.
Drop-shipping can be very successful and can generate great revenues. For example, Wayfair is an online furniture store and a dropshipping site.
With type, dropshipping is becoming a super competitive place, so it won’t be a walk in the park for the newbies, and that they would have to work hard to master the art of drop shipping and succeed.
Subscriptions used to be essentially saved for magazines and papers, but exactly when you thought they are getting obsolete, they returned with a huge blast as subscription boxes. So large, that the subscription box market developed by over 100% consistently from 2013 to 2018.
All the subscription boxes work a bit different, but essentially involve signing up to receive a separate kind of item that you like every month. Today, subscription-based sites are one of the biggest types of ecommerce websites, generating revenues in billions of dollars.
Read Also Sell Shopify Subscriptions
There are multiple subscription services available. For instance, “FirstLeaf” is a subscription-based website for wine lovers. Every month wine specialists scour the world to produce unique and award-winning wine bottles for their subscribers from the places they never heard the name of.
Some of the subscriptions are, beauty subscriptions, coffee subscriptions, club subscriptions, etc. subscription is an efficient way to keep the clients, and it gives you a sense of prediction that how much stock you need to have.
- Private labeling and manufacturing
Private labeling and manufacturing is yet another popular type of ecommerce website that refers to the single entity (individual or business) being responsible for everything, from start to end process. In other words, they are the ones who are manufacturing the products, packaging them, and then selling those products to the end customer directly.
It sounds like some technical term, but many small businesses are working on private label. For example, a bakery selling homemade savories and cakes on order.
- White labeling
The term white labeling refers to the product or service provided by one company (manufacturer) and sold by reseller brands by changing the brand/ label name.
White labeling, sounds sketchy? Well, it’s common nowadays, in fact, many big names are using this.
For example, Dollar Shave Club is like the poster child of white labeling businesses. By taking a decent, affordable razor, and taking just a small margin to repackage and distribute it, Dollar Shave Club has become a huge success among women tired of overpaying for pink plastic razors.
They follow the same white labeling tactics, the Dollar Shave Club has gained a huge success among many women tired of paying for a plastic razor just by purchasing the reasonable razor, and repackaging and distrusting its customer while keeping the just small margin.
It works as a subscription box service as well, efficiently generating great revenues.
A wholesaler works as the middle Man between a retailer and a manufacturer. Every wholesaler works on different premises but most of them work on small profits by selling the products to retailers. Wholesalers give away to the retailer to be truly responsive about how much stock they need or what is taking off the racks, leaving the manufacturer to deal with it. (especially when a manufacturer is overseas)
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This means a wholesaler must have to order a bulk of stock in advance by only predicting what retailer may need to buy in the future, and which product will increase in demand. If it goes safe and well, it could generate great revenues or it can be highly risky at the same time if things go not well,
yet it is surely a difficult act!
- Rent and loan
In this model, the business owner charges for providing the service or product for a limited period, rather than selling it to the customer. A B2C is an example of a car rental place, but C2C options are also popping up.
There are various rent and loan platforms available where one consumer rent out their gadget like drones, camera lenses, etc. to another consumer for some time. One of the most famous platforms is AirBnb which does not need any introduction, there is also Fat Llama a well-known platform, which generates thousands of dollars in a month.
It a payment model commonly used by digital products. A free version of the products can be accessed by using freemium, which has limited functionality.
There is a hope that at some point you may need to access the premium plan and in this way, you sign up to get the extra features. While you may continue using the free version for as long as you want, you would be tempted to purchase the premium version with even better features and functionalities, thus ensuring that the company continues making money.
Spotify is a great example of working on a freemium platform. There is occasionally hindrance by advertisement while using the free Spotify plan, which is not a big issue for a casual user. However, the Serious music lover will not tolerate this interruption at any time and will upgrade for continuous listening.
What are the types of e-commerce technology?
– E-commerce Business Models
B2B: Business-To-Business E-commerce
B2B refers to the trading of products or services from a business to another business. Whereas many businesses related to the B2B model are service providers such as software houses, document hosting companies, and other various e-commerce businesses.
ExxonMobil Corporation and the Chevron Corporation, Boeing, and Archer Daniel Midlands are examples of B2B e-commerce. These businesses are based on a custom-made e-commerce platform that works with other businesses directly. This kind of business needs a huge amount of cash while initiating a business.
B2C: Business to Consumer E-commerce
The term B2C refers Business to Consumer E-commerce where a business sells to a customer by using an online platform rather than a physical store. This is the most common type of business and the deepest market; this is what generally people think when they hear the term e-commerce business.
You can easily find the B2C examples, such as Overstock.com, Newegg.com, ModCloth, and Wish, but brick-and-mortar is another significant B2C model like Wal-Mart,
Staples, REI, Target, and Gap.
For most of us, B2C and B2B are intuitive concepts, but the C2C concept is quite different. How does a C2C consumer-to-consumer e-commerce business works?
The consumer confidence in online business Is growing day by day, These sites provide a platform for customers to sell, buy, and trade product by giving a small commission to the websites. A consumer must be cautious while opening a C2C site.
There are many success stories of such platform as eBay and Craigslist, but still many other auction sites have opened and closed immediately because of nonviable models
C2B: Consumer To Business E-commerce
C2B is another type of ecommerce website model that is not commonly considered by people, yet it is growing faster. This business model focuses on the trading between consumer to Business, in this model consumer sells services and products to business, and is generally identical to sole ownership serving a bigger business.
Auction sites as Upwork and other common content monetization strategies such as affiliate marketing are also considered under this model.
How many types of b2b e-commerce?
A business to business model has unlimited benefits, it’s a quick way of marketing that offers strong support to your business, due to which it is getting popular.
Due to the internet, several changes can be observed in every field of life. It brought some immense transformation in the marketing world as well, this new from marketing is known as e-biz. It is a great way of exchanging services, information, and products between businesses, this also helps in making a profit quickly. This strategy encourages a modern businessman to earns a lot more than before.
Types of B2B E-commerce
- a) Supplier- Oriented Model (eDistribution)
A Supplier Oriented model refers to a place where multiple distributors set up an online marketplace to build up a productive channel to sell to numerous businesses. The distributor has the right to set his price list depends on the requirement of the purchasers. Distributors are normally accessible by the services or items they offer.
Cisco is a great example of distributors arranged B2B model. In 1994, cisco launched its very first website. There was huge traffic on the website by 1998, the total number of views per month was around one million. The hype was because of tracking on their order, download software, or technical assistance. Cisco announced to launch its online application in the same year, which saved them $363 annually.
- B) Buyer Oriented Model (eProcurement)
A buyer-Oriented model focuses on the requirements of the individual buyer. This model is generally well known among huge organizations with higher volume purchases. The buyers set up an online entry to accept multiple offers from numerous different vendors. As numbers of offers are coming the buyers do a careful analysis, after analysis, a buyer can decide which vendor to work with.
This way, a buyer can get the best price from the vendor and minimize the administrative cost as well.
GE`s electronic bidding site referred to as GE TPN works as a buyer-oriented marketplace. Buyers need to pay fees to access this website. Buyers post their project requirements on the websites, and vendors who meet those requirements give offers to buyers. When there are tons of offers to select from, buyers can feel free to decide with whom they want to work with
By bringing buyers and vendors on one platform, this model encourages both of them to grow their business, build a stronger partnership, and in the end strike more beneficial deals. Any business required a Third-party integration for creating an extremely versatile website.
- C) Intermediary-Oriented Marketplace (eExchange)
An intermediary oriented comprises of marketplaces that allow the sellers and buyers to communicate with each other. Marketplace owners keep a log of sellers and buyers and the main aim is to make a profit from such affiliations. It is also very important to know about top practices for b2b e-commerce.
Alibaba is a prototypical example of an intermediary oriented marketplace. The company was established in 1996, the focus was to connect the Chinese vendors to overseas buyers. In 2015, two stores of Alibaba made $170 billion in sales, which was a huge success. It created another record in 2015 by piling up deals and benefits far greater than all leading US retailers, such as Amazon, Walmart, and eBay.
What Model Fits Your Idea Best?
Well by now, you are well aware of how e-commerce business, product options, business classification, and platform exits. You are prepared to begin, have a look at your business plan. The key to success in the ecommerce industry lies with your capability to understand your unique strengths and compare the operational model of different types of ecommerce websites. The ecommerce industry has just started to expand and there’s a massive untapped potential for innovative entrepreneurs determined to come out on top.
So, what are you waiting for? Choose the right eCommerce business model and start surfing with the big waves!
How do you understand the best types of business for headless e-commerce?
It is the simplest and easiest structure of any business application that separates the front end and back end of the e-commerce application. This structure provides the freedom to the business to build an application however they want to, it enables the business to improve the overall client experience
The four biggest benefits worth the efforts and can fasten your business.
- Better employee adoption.Some organizations are hesitant to utilize new advanced technologies because of steep learning. Headless commerce business tackles this issue since anyone from the team can easily access and make changes without advanced skills or in-depth knowledge.
- The right tools for the job.Headless commerce provides businesses the tools to create custom experiences that customers cannot find anywhere else.
- Time savings across IT.Since front-end changes can be made easily, ecommerce developers do not need to spend much time on the user interface. Moreover, headless templates are also available that saves developer time and effort
- Time to market.Headless commerce makes it easier to create a new front experience, which attracts the market. A new environment can be set rapidly according to the trend without spending a lot of time and cost on backend development
What are the different types of e-commerce apps?
- B2B (Business- to – Business) A B2B e-commerce applicationis focused on trading and providing products and services between two businesses.
- B2C (Business- to – Consumer) A B2C model is focused on trading and providing products and services between business and customer.
- C2C (Consumer -To- Consumer) A C2C model is focused on trading and providing products and services between two consumers.
- C2B (Consumer -to -Business) A C2C model is focused on trading and providing products and services between consumers to business.
How many types of e-commerce revenue?
Some of the popular eCommerce revenue models include;
- Private labeling and manufacturing
- White labeling
- Rent and loan
Are there any types of business insurance for e-commerce?
E-commerce shipping insurance is an extremely important cover required for e-commerce sellers, especially if you have your product inventory shipped directly to your warehouse. Should any loss, damage, or theft occur during the time of transit to the inventory, the responsibility is on you as an e-commerce seller.
What types of information do e-commerce sites need to protect?
The most pressing need for ecommerce sites is to protect the confidential/identifiable personal and financial information of its users. Any breach in users’ information may result in a massive cybersecurity scam, which may lead to reputational and financial loss for the business.