In today’s digital world, e-commerce is becoming an increasingly influential industry. If you want to launch an online business, the business model is one of the first decisions you need to make. An increasing number of entrepreneurs are choosing to use the support of an e-commerce manager – why is it worth it?
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E-commerce business model
A business model is a blueprint for your company, so you know what you’re aiming for and what target audience you’re targeting. This ensures that you make optimal use of the funds you invest and thus generate more revenue and profits. If you want to succeed, you need to choose a business model to begin with. An example is B2B or B2C, although this is not the only division of models for e-commerce.
Business models in the e-commerce industry – a breakdown by relationships between entities
This name may sound quite complicated and official, but in reality it depends on who you want to sell your products to: companies or individual customers.
1. B2C (business to consumer) – selling directly to the individual customer
This business model of the company means that you sell your products directly to individual customers. This is the most well-known type of trading that takes place with most traditional online stores. Customers make purchasing decisions based on emotions and personal preferences, and this is something to keep in mind: content should be geared to the customer’s needs and emotions, since in B2C decisions are made more spontaneously than in B2B.
2. business to business (B2B) – selling products to businesses
The B2B business model involves selling products to other companies. B2B companies act as suppliers to other companies, and transactions are often based on long-term contracts and price negotiations. So here the key is not emotion, but the image of an expert in the industry and the fulfillment of contracts. You are dealing with entrepreneurs or merchants who work for them, who make decisions based on analysis rather than momentary impulses, and who approach purchases more responsibly.
3. C2B (consumer to business) – trade between an individual and a company
In the C2B model, individuals sell goods or services to companies. This is a reversal of the traditional business model, where individual customers buy from companies. One example is a platform that allows freelancers to offer their services to companies.
4. C2C (consumer to consumer) – exchange between individuals
Companies operating under the C2C model bring individuals together to sell each other’s goods. It is often based on platforms where users can sell and buy from each other. A good example is the marketplace , although on most of the popular marketplaces the sellers are in business.
E-commerce business models by sales method
A company’s business model depends not only on who you sell to. There are also different sales methods and platforms you can choose between. A traditional SaaS or open source online store is the most popular, but not the only solution.
1. online stores
Online stores allow you to sell products via the Internet. They can be both B2C and B2B platforms. They give entrepreneurs a wide sales reach and the ability to target different groups of customers. Here, however, it should not be forgotten that the competition among online stores is huge, so do not forget about marketing.
2. wholesale on individual order
The B2B model, which involves wholesale sales on an individual order basis, is often used in industries where customers make large orders, such as buying materials for production.
3. dropshipping
Dropshipping is a business model in which the entrepreneur acts as an intermediary between customers and manufacturers, without physically owning and storing the products. It’s a popular option for e-commerce startups because it doesn’t require a large investment to get started. However, it is worth remembering that, unfortunately, dropshipping does not have a good reputation; it is mainly associated with low-quality products and long delivery times. If you want to build a strong business, you need to ensure a high level of customer service. Most companies relying on dropshipping, unfortunately, only compete with their competitors on price, which leads to low margins and reduces profits and makes it difficult to invest in business development.
4 Subscription model
The subscription model involves the recurring sale of products or services on a subscription basis. Such a model appears mainly for services, but sometimes also for products such as cosmetics and household chemicals.
Why do you need an e-commerce manager?
The decision to hire an e-commerce manager depends on many factors, including the scale of the business, the type of business model and the company’s resources. An e-commerce manager is a specialist in e-commerce. E-commerce management, which can help with:
- Strategy and planning: an e-commerce manager helps develop an online strategy, including choosing the right business model, identifying the target audience and competition, and planning marketing activities.
- Platform management: managing an online store, choosing the right e-commerce platform, and optimizing the site for UX and SEO are key to success in selling online.
- Online marketing: an e-commerce manager can help develop an online marketing strategy, including social media advertising, SEO, ad campaigns and email marketing.
- Analyze and optimize: monitoring sales performance, analyzing data and adjusting strategies are important tasks of an e-commerce manager.
A common mistake of entrepreneurs starting out with e-commerce is to forgo investment in marketing. This may seem like an unnecessary investment, due to the uncertainty of the results. Unfortunately, slogans like a good product defends itself have little to do with reality. On the IdoSell platform alone, the number of online stores has increased by 65% in 5 years: against such sizable competition, you need to be able to stand out and advertise.
This is the response of Internet users in the report “E-commerce in Poland 2023” to the question: did you happen to buy a product based on content published on the Internet?
Do you want to get into e-commerce seriously and make your store a profitable business, not a hobby? Contact me – I will comprehensively take care of your online sales.
