15+ types of ecommerce models that work in 2024: Which One For You?

In this article, we will dive into the differences, benefits, pros & cons of ecommerce business models.

Key Takeaways

• Ecommerce encompasses online trading of goods and services using various devices, potentially replacing or coexisting with brick-and-mortar stores.
• Ecommerce operates in several market segments including business-to-business (B2B), business-to-consumers (B2C), consumer-to-consumer (C2C), consumer-to-business (C2B), and business-to-government (B2G).

What is an eCommerce Business Model?

Electronic commerce, or eCommerce, is a business model that allows companies and individuals to trade products and services online. It covers various market segments and works on computers, tablets, smartphones, and other smart devices. 

Now, let’s delve into six business classifications and take a closer look at seven delivery models to help you launch or grow your online store.

TOP 6 Ecommerce Business Models

The way an ecommerce company functions can vary based on its products, services, and structures. There are six different approaches it can choose from.

Business-to-Business (B2B)

Business-to-business (B2B) is a business model that provides products from one business to another.  

This category usually includes service providers and extends to different ecommerce models like software firms, office furniture & supply providers, and document hosting companies.

How does B2B work

Here’s a step-by-step breakdown:

• Step 1: Introduction of Product: A crucial differentiation between B2B and B2C lies in the time it takes for a product to transition from introduction to sale.
• Step 2: Customer Acquisition: Gaining new customers in B2B typically takes longer than  B2C.
• Step 3: Contract Agreement: B2B deals require a contract agreement process due to higher transaction values and longer processes.
• Step 4: Careful Transaction Planning: Each B2B transaction demands meticulous planning as it depends on client management.
• Step 5: Marketing Strategies: Different marketing tactics attract potential clients’ attention and enhance awareness of the company’s offerings.
• Step 6: Client Engagement: Maintaining contact is essential after acquiring clients . Professional meetings are crucial before finalizing deals to ensure smooth business proceedings.

Pros & Cons 

Pros:

• Higher profits
• Huge market potential
• Improved security
• High Level of Customer Loyalty
• Recurring revenue

Cons:

• More complex setup process
• Limits to sales & target market

Examples of B2B Companies

Under the B2B business model, a variety of businesses and companies fall. Let’s take a look at some notable examples.

Zoom Video Communications

Amid the COVID pandemic, Zoom Video Communications gained prominence in the B2B landscape. This US-based startup. provides video calling and online chat services, improving connections with clients, colleagues, friends, and family.

Furthermore, Zoom introduced a cloud-based platform for online chat, video calls, and phone systems

Slack 

Among the top 15 valuable B2B SaaS firms worldwide, Slack Technologies Inc. is highly esteemed. 

Positioned as a “collaboration hub,” Slack provides a messaging platform for communication and aids businesses in automating workflow tasks, integrating smoothly with applications like Google Drive and Office 365.

Google

Google has an extensive collection of 271 products that cover areas like cloud content collaboration, surveys, digital analytics, document creation, and video conferencing. 

Popular tools among these are Google Drive, Google Forms, Google Docs, Google Analytics, and Google Hangouts Meet.

Business-to-Consumer (B2C)

Business-to-Consumer or B2C is the most common type of business model, where businesses sell products and services directly to individual online shoppers rather than through physical stores.

B2C became widely popular during the late 1990s dotcom boom. It mainly pertains to online retailers using the internet to sell products and services to consumers directly.

How does B2C work

For achieving effective marketing outcomes, B2C companies should follow a comprehensive tutorial:

• Step 1 – Create attention-grabbing content: B2C businesses face competition, requiring strategies to catch the attention of potential customers.
• Step 2 – Build Trust: Leveraging social media aids in building trust, especially as people extensively research products and services online before making purchases.
• Step 3 – Embrace Multi-Channel Approach: Employing marketing emails, discounts, blogs, podcasts, and social media content across various platforms fosters trust among potential customers.
• Step 4 – Build Loyalty Programs: Implementing special programs featuring benefits like discounts, points, or membership perks attracts customers and enhances their loyalty.

Pros & Cons

Pros:

• Lower prices
• 24/7 reach
• Quicker sales cycle
• Direct Communication
• No geographical boundaries
• No middlemen involved
• Robust customer relationships 

Cons:

• Highly Competitive Market
• Lower Margins

Examples of B2C Companies 

The following are examples of B2C companies.

Amazon

Amazon excels in various domains such as e-commerce, digital streaming, cloud computing, and artificial intelligence. 

When customers purchase Amazon products, they’re involved in a B2C transaction while also paying for Amazon’s online services.

Netflix

Netflix, a popular online streaming platform, provides subscribers with access to movies, documentaries, and TV shows for a monthly fee.

Moreover, Netflix produces its original content, engaging in B2C transactions by directly offering self-created content to viewers.

Spotify

Spotify provides a music streaming service through monthly subscriptions, giving users access to a wide range of songs, podcasts, and albums. 

Other  well-known B2C companies include Starbucks, H&M, Facebook, YouTube, Alibaba, Airbnb, Uber, and eBay.

Direct-to-consumer (D2C)

Direct-to-consumer (D2C) is a business model that allows companies to sell their  product directly to their  end customers, bypassing third-party wholesalers or online retailers. 

This approach is well-suited for small business marketing to launch products, though it necessitates partnering with a fulfillment center for inventory storage and prompt order shipping.

How does D2C work

Here are step-by-step instructions to sell on the D2C business model: 

• Step 1 – Online Presence: Brands set up an online platform, often a website or app, to enable customers to explore products and place orders.
• Step 2 – Direct Engagement: Through this platform, brands directly interact with customers, sharing product details, promotions, and company values.
• Step 3 – Order Placement: Customers select products, add them to their cart, and place orders directly via the brand’s website or app.
• Step 4 – Order Fulfillment: Brands manage the entire process, from packaging to arranging delivery, once an order is received.
• Step 5 – Delivery: Brands collaborate with packaging and delivery services to ensure timely and secure product delivery to customers’ homes.
• Step 6  – Customer Support: Store owners address customer inquiries, feedback, and concerns directly, fostering a personalized connection and offering assistance.
• Step 7 – Feedback Loop: Brands collect customer feedback to enhance products, services, and the overall shopping experience.
• Step 8 – Personalization: Store owners tailor marketing messages, product recommendations, and customer interactions based on individual preferences, enriching the customized shopping journey.

Pros & Cons

Pros:

• Reach higher control over margins
• Create more room for product testing
• Cut out the middleman
• Better connect with your customer
• Control your brand’s story

Cons:

• Increased competition & liability
• Complex supply chains

Examples of D2C Companies 

Here are 3 D2C company names to keep an eye on:

MeUndies 

MeUndies stands out with its slogan “Feel it to believe it.” 

As a D2C brand, it reaches diverse customer groups through two purchasing options: a regular online store and a subscription service.

For subscribers, MeUndies provides new designs and selects upcoming pairs to feature in the online shop based on customer feedback.

In particular, the company chooses custom pouch packaging and jiffy bags over heavy boxes for its products to reduce packaging costs.

Bombas

Bombas stands out as a D2C startup by significantly enhancing product quality and pricing items above the standard while still achieving remarkable success.

By 2018, Bombas had achieved a gross profit exceeding $100 million.

HIMS & HERS

HIMS and HERS are outstanding illustrations of packaging design and rank among the leading D2C brands in the cosmetics industry.

HIMS focuses on men’s issues like baldness, skin troubles, and erectile dysfunction. Its packaging boasts a minimalistic style, embodying a straightforward approach. As a D2C brand, HIMS aims to be more than a product seller, positioning itself as a valuable partner in meaningful discussions.

Consumer-to-Consumer (C2C)

C2C business is a digital platform for individuals to sell their own items directly to other consumers. These transactions are often managed by third-party websites or marketplaces that facilitate interactions between buyers and sellers.

These platforms enable small businesses and hobbyists to sell their products at their chosen prices, without the need for their own online storefronts.

How does C2C work

Here is a step-by-step guide for store owners to work on the C2C business model:

• Step 1 – Listing and Selection: Sellers list their products, while buyers select items they want on the C2C platform.
• Step 2 – Order Placement and Payment: Buyers place orders, and the platform handles secure payments.
• Step 3 – Seller Notification and Fulfillment: Sellers receive order notifications and prepare products for shipping.
• Step 4 – Shipping and Tracking: Sellers manage shipping, create labels, and buyers can track their shipments.
• Step 5 – Confirm Delivery and Feedback: Customers confirm receipt and provide feedback.
• Step 6 – Transaction Completion: Transaction Completion: Successful delivery concludes the transaction, transferring payment to the seller.

Pros & Cons

Pros:

• Increased affordability & customer base
• Accessibility to rare items
• Convenience
• Minimal costs

Cons:

• Credit card payments can be challenging
• Lack of quality control
• C2C platforms can be vulnerable to scams

Examples of C2C Companies 

There are more powerful companies fostering C2C interactions:

eBay

eBay stands out as a notable C2C intermediary, providing a variety of fixed-price and auction items. It appeals to bargain hunters and those in search of rare products, making it a captivating platform for a diverse array of shoppers.

Amazon

Amazon is a versatile platform, engaging in both B2C and C2C interactions. Beyond its B2C retail role, Amazon Marketplace serves as a hub connecting third-party vendors, including both new and used products. 

To become part of Amazon’s seller network, individuals or businesses must set up an account, list their items, and manage shipping logistics directly to customers or through Amazon’s distribution services.

Craigslist

Craigslist is a popular C2C marketplace that enables individuals to buy, sell, and trade  goods and services. With its localized sites for cities worldwide, it fosters a sense of community and emphasizes relationship-building. 

This platform allows property owners to connect with potential renters and enables experts to reach out to those in need of their services.

Consumer-to-Business (C2B)

Consumer-to-Business (C2B) is a business model in which consumers sell goods or services to companies. 

This model includes reverse auctions, service provision sites like UpWork, and several familiar blog monetization methods, such as affiliate marketing or Google AdSense.

How does C2B work

C2B e-commerce uses a digital platform to connect consumers and businesses, simplifying transactions. Consumers create profiles and list products or services with pricing and details.

Businesses can browse for required services, submit offers, and once terms are agreed upon, the platform manages the transaction process and receives a service fee.

Pros & Cons

Pros:

• Customer loyalty
• Brand awareness
• Affordable advertising
• Product development insights
• Better relationships with customers
• Higher revenue

Cons:

• Negative consumer responses
• Lack of trust
• Difficulty in managing quality control

Examples of C2B

In the C2B model, companies benefit  from customers’ readiness to set their own prices, share information, or promote businesses, while consumers enjoy advantages like payment flexibility, direct goods, and services at low or no cost.

Some examples of the C2B business model include:

The C2B model leverages customers’ willingness to determine prices, share information, and promote businesses, thus providing benefits for companies. Meanwhile, consumers enjoy advantages such as flexible payments and access to goods and services with minimal or no costs. 

Examples of the C2B business model include:

Reverse Auctions

Reverse auctions enable customers to participate in the purchasing process by proposing the price they are willing to pay, providing a unique approach that aligns with their preferences and financial limitations.

Affiliate Marketing

Affiliate marketing enables individuals, such as influencers, bloggers, and writers, to promote specific products on their platforms and earn a fee in return.

For example, a food business could partner with a food blogger to showcase their new products in a recipe. When the blogger includes a product link on their website, the company could provide them with a percentage of the sales generated from the recipe.

Freelance

C2B businesses also enable interactions between freelancers, or gig workers, and businesses. Prominent C2B platforms such as Fiverr, Shutterstock, and Upwork provide listings for such collaborations.

Business-to-Government (B2G)

Business-to-government (B2G) involves selling and promoting goods, services, and information to government entities at various levels, including federal, state, and local levels.

Government contracts offer profitable prospects for businesses of various sizes. It’s noteworthy that contracts in the public sector are typically larger and more enduring compared to those in the private sector.

How does B2G work

Unlike other sales models, the B2G ecommerce approach stands out due to its complexity and the need to strictly follow business laws and regulations under government oversight. 

Typically, government agencies create negotiated contracts or tender processes, inviting businesses to bid. 

Once businesses meet stringent government criteria, they calculate fees and provide pricing details for the project. Subsequently, the government selects the most suitable company to sign a B2G contract.

Pros & Cons

Pros:

• Good project security
• Stable job prospects

Cons:

• Regulatory delays in project start
• Extra regulations can mean extra unplanned costs.

Examples of B2G companies

Here are some examples of B2G business models:

Riskpulse

Riskpulse offers a tailored risk management and supply chain solution for government agencies, effectively cutting operational costs, minimizing disruptions, and predicting timely or delayed delivery of goods. 

Riskpulse serves diverse sectors like healthcare, transportation, energy, and defense.

Senseware

Senseware provides an all-inclusive IoT platform, including hardware, cloud data , and software solutions. Their primary focus is capturing real-time data for energy submetering, indoor air quality (IAQ), and HVAC operations.

Skycatch

Skycatch is a top-tier aerial intelligence platform designed for enterprises excelling in data imaging. Government agencies use Skycatch’s on-site connectivity, robust Artificial Intelligence, and advanced analysis tools to enhance project planning, all supported by powerful Machine Learning algorithms.

Types Of Ecommerce Business Revenue Models

Moving forward, a critical aspect of online selling involves mastering inventory management and product sourcing. 

Now, let’s take a closer look at seven revenue models for e-commerce businesses, seamlessly integrating these essential components.

Dropshipping

The simplest e-commerce model is dropshipping. It involves creating an online store, accepting customer payments through credit cards or PayPal, and freeing you from tasks like inventory management, stock storage, and packaging.

Still, a crucial disadvantage of dropshipping is the lack of control in the supply chain, which can lead to receiving damaged or lower-quality goods, subsequently denting your brand’s reputation. Even though the drop shipper manages the deliveries, you remain the frontline for customer interaction, tasked with support and relationship management.

How does Dropshipping work

Dropshipping functions through a collaboration between a customer-facing store and a supplier, offering two primary approaches. One involves personally seeking wholesale suppliers through platforms like AliExpress, SaleHoo, or Worldwide Brands. Alternatively, apps like DSers can connect with numerous suppliers seamlessly.

In particular, DSers, a Shopify app, streamlines this process by enabling the importation of AliExpress products to your Shopify store. This app simplifies much of the dropshipping workflow, leaving the store owner responsible for ensuring accuracy before confirming orders. 

Afterward, the product is shipped directly from the AliExpress supplier to the customer.

Pros & Cons

Pros:

• Less upfront capital required
• Easy to start, test, and scale
• Low overhead
• Flexible location
• Wide selection of products to sell

Cons:

• Low-profit margins
• Inventory issues
• Shipping complexities
• Supplier errors
• Limited customization and branding

Example of Dropshipping Suppliers

Here are some of the most well-known dropshipping supplier directories online.

AliExpress

AliExpress is a global platform connecting e-commerce platforms with product suppliers, facilitating wholesale and dropshipping operations seamlessly.

Location & Shipping Information: When it comes to shipping, AliExpress provides delivery to 220 countries, including the US. If you opt for standard shipping, your package could arrive within 15 to 45 business days. However, if you’re in a hurry, choosing premium shipping can expedite delivery to approximately 7 to 15 business days.

Product types: AliExpress boasts a catalog of over 100 million products, spanning from fashion, toys, and consumer electronics to skincare items, jewelry, furniture, and even automobiles and motorcycles.

Recommended for: AliExpress suits both newcomers and veteran dropshippers.

Alibaba

Alibaba serves as a B2B marketplace, connecting buyers and sellers primarily tailored for wholesalers, not individual sellers. This setup promotes direct transactions between buyers and manufacturers, offering products in bulk to fulfill orders for your dropshipping store.

Locations & Shipping information: 

With Alibaba dropshipping, there’s a waiting period that varies by location, potentially lasting up to six weeks for deliveries. To manage costs effectively, you can choose between freight or air shipping.

Product types: Alibaba proudly presents an excess of 2.8 million suppliers across more than 5,900 categories.

Recommended for: Alibaba is well-suited for experienced dropshippers who are interested in private label manufacturing and purchasing bulk goods directly from distributors.

Doha 

Doba stands out from regular dropshipping suppliers by directly integrating with around 165 warehouses. This unique approach streamlines order management across multiple warehouses via a centralized interface. Additionally, a convenient Push-to-Marketplace tool simplifies the listing process for eBay items.

Locations & Shipping Information: Doba offers global shipping, with shipping rates influenced by both the specific dropshipping wholesalers and the prices you define for your products.

Product types: Doba provides ample opportunities for exploration, with a range of over two million products featuring attractive profit margins.

Recommended for: Doba is particularly suitable for individuals in niches with a limited number of main suppliers. This streamlined strategy simplifies coordination, making Doba an appealing option.

Wholesaling and Warehousing

In business operations, wholesaling serves as a means to manage the entirety of the item delivery process, excluding the actual product manufacturing. This involves directly sourcing items from suppliers and undertaking responsibilities such as warehousing, inventory management, customer order monitoring, and shipping coordination.

Wholesale eCommerce is commonly associated with the business-to-business (B2B) model, although it can also be integrated into a business-to-customer (B2C) online approach.

How does Wholesaling & Warehouse work

Here’s a concise breakdown of the process:

• Step 1 – Sourcing Suppliers: Wholesalers connect with suppliers, distributors, or manufacturers offering bulk products at discounted rates.
• Step 2 – Negotiating Terms: Wholesalers engage in discussions with suppliers about pricing, order quantities, payment methods, and delivery arrangements.
• Step 3 – Placing Orders: Once terms are agreed, wholesalers make bulk orders for cost savings.
• Step 4 – Payment and Invoicing: Wholesalers adhere to agreed payment terms and receive invoices detailing quantities, prices, and due dates.
• Step 5 – Warehousing & Storage: Upon product receipt, wholesalers store goods in their warehouses, enabling swift order fulfillment to retailers and other customers.
• Step 6 – Order Fulfillment: Wholesalers pack and ship products upon receiving orders from retailers.
• Step 7 – Building Relationships: Wholesalers build strong ties with suppliers and retailers, involving effective communication, understanding of needs, and dependable service.
• Step 8 – Market Research: Wholesalers monitor market trends, consumer preferences, and demand shifts to make informed decisions about product selection and retailer offerings.

Pros & Cons

Pros:

• Easy scalability
• No marketing expenses
• Increased reach
• Simpler operations
• Lower cost of business
• Storage capability
• Supply chain stability and mitigation of risk

Cons:

• Highly competitive
• Offline Tracking Systems
• Redundant Tasks
• Transactional Processes
• Rising customer expectations 
• Profit pressure 

Examples of Wholesaling & Warehousing

Let’s discuss some specific wholesale business examples.

Costco

Established in 1976 by James Sinegal, Jeffrey Brotman, Sol Price, and Robert Price, Costco—officially known as Costco Wholesale Corporation, stands out as a prominent American retail chain. 

Notably, it operates as both a retailer and a wholesaler, distinguishing itself by purchasing products in bulk directly from manufacturers and selling to individual customers. 

Moreover, Costco employs a conventional wholesale strategy by offering the same items to other businesses. 

A distinct characteristic of Costco is its membership-only model, requiring consumers to obtain membership before shopping.

Sysco

Syscro Corporation is a “giant” American company involved in the distribution of kitchen equipment, food products, and tabletop items such as restaurants, schools, and healthy facilities. They also give stuff to hotels and other food service companies like Sodexo and Aramark.

Sysco is the largest wholesale food service distributor in the US, serving over 600,000 clients in 90 countries.

Toyota Tsusho

Toyota Tsusho operates as the trading arm of the Toyota Group, aiming to assist Toyota’s automotive division and provide wholesale parts to other vehicle manufacturers.

Toyota Tsusho also is an extensive company with diverse interests in metals, machinery, energy, chemicals, electronics, food, customer service, and logistics.

Subscription

Opting for a subscription model entails regularly delivering your products to customers over an extended period. Various subscription types exist, such as introducing new products or providing limitless services. 

Consequently, pricing, billing, and account management hinge on your specific business, products, and customer consumption patterns.

Especially the Subscriptions work well for goods like food, fashion, beauty, and even pet products.

How does Subscription work 

Subscription models have gained widespread popularity, offering customers the convenience of recurring services. So how does the subscription work? Here’s a simplified explanation:

There are 6 steps for users to 

• Step 1: Online signup: Customers join subscription services through multiple devices on the internet
• Step 2: Payment information: Users share credit card or bank details for payments 
• Step 3: Recurring charges: Customers agree to be charged regularly
• Step 4: Automatic Renewal: If they continue the service, the subscription renews
• Step 5: Renewal Charge: A payment is made for the next period.
• Step 6: Customer Control: Users can cancel if they want to stop the subscription.

For example, ButcherBox is a subscription company delivering customers fresh, organic meat and seafood each month. Customers can choose from pre-designed boxes or customize their own.

Pros & Cons

Pros:

• Predictable revenue stream
• Recurring revenue
• Stronger & long-term customer relationships
• Lower customer retention spend
• Easier demand forecasting
• Opportunities for upselling/cross-selling

Cons:

• Streaming services
• Monthly subscription boxes
• Software subscriptions 

Examples of Subscription business revenue model

Here is a list of popular subscription services that are shining!

ClassPass

With ClassPass, you can access over 30,000 fitness studios globally through a monthly membership. Unlike the traditional single-gym approach, it lets you explore diverse fitness classes across various gyms. 

Catering to fitness enthusiasts and newcomers, ClassPass offers a price range of $15 to $199 per month.

HubSpot

HubSpot serves as a robust software platform, excelling in marketing, sales, and customer service, all backed by a free CRM system. 

It boasts user-friendly CRM features, seamless tool integration, and a pioneering role in shaping “inbound marketing,” focusing on informative content like blogs, eBooks, and webinars to attract leads. 

With a broad audience in mind, from small businesses seeking marketing automation to large enterprises managing numerous contacts, HubSpot offers pricing that begins at $18 per month.

Private Labeling and Manufacturing

Private labeling entails a company outsourcing manufacturing to a third-party based on their unique ideas. This eliminates the need to build a factory and manage production while also granting exclusive selling rights for the products.

Following manufacturing, you can ship items directly to customers, an online platform, or to yourself for management. However, initial expenses vary, making private labeling suitable for brands with abundant resources and distinct product visions.

How does it work

Here’s a simplified breakdown of how private labeling and manufacturing work:

• Step 1 – Contact and Partnership: Business owner collaborates with third-party manufacturers that specialize in large-quantity production.
• Step 2 – Factory Production: Manufacturers operate factories equipped with machinery for bulk production, offering cost efficiency.
• Step 3 – Mass Production: The business owner specifies the required goods for mass production.
• Step 4 – Contract Agreement: Both parties sign a contract defining terms and profit-sharing.
• Step 5 – Exclusive Selling Rights: The contract allows the business owner to sell products under their label, avoiding intellectual property infringement.
• Step 6 – Customization: The business owner defines product details such as name, design, ingredients, production method, packaging, distribution, and pricing.

Pros & Cons

Pros:

• Upper edge over the competition
• Cost-effectiveness
• Customized marketing control
• Higher stability
• Adaptability
• Control over pricing and profitability

Cons:

• Minimum orders
• Low-quality myths 
• Competition

Examples of Private Labeling and Manufacturing 

Here are a few of the most successful private label brands: 

Kirkland Signature

Kirkland, Costco’s widely recognized private label brand, has a global presence. They offer a variety of products identical to well-known name brands, such as diapers produced by the same manufacturer as Huggies. These items are sold in bulk at a minimum of 20% lower cost than the name-brand alternatives.

Trader Joe’s

Trader Joe’s specializes in selling mainly private labeled items. They adopt a strategy of offering steep discounts on common grocery products, such as pasta. 

Additionally, they offer exclusive products unique to their store, such as cookie butter and a wide range of frozen meals. This approach fosters strong customer loyalty towards Trader Joe’s, particularly for their exclusive products.

AmazonBasics

Amazon operates over 100 private labels, with AmazonBasics being the first. This label targets cost-conscious consumers who value affordability over brand loyalty. 

Amazon identified these products using search and purchase data, initially starting with battery products. Presently, they offer a variety of budget-friendly home goods, including curtain rods.

Leveraging their extensive data, AmazonBasics consistently provides competitive pricing, driven by its understanding of prevailing market rates for comparable products.

White Labeling

White labeling allows store owners to sell products using their own branding provided by a third-party distributor. This is common in fashion and health industries, especially with items such as cosmetics, essential oils, and online CBD products.

White labeling provides advantages like boosting brand visibility, avoiding product creation from scratch, and leveraging the distributor’s expertise and knowledge.

How does it work

White labeling involves a legal agreement between a manufacturer/provider and a reseller. 

• Manufactures: The company developing a product for rebranding and resale plays a crucial role. The manufacturer’s primary task is to produce a high-quality unbranded product that meets market demand.
• Reseller: 

Upon purchasing the product from the manufacturer, the business sells it under its own brand. The reseller primarily focuses on building its brand, marketing, and promoting the product to drive sales. 

By customizing the product according to its brand guidelines, the reseller presents it as its proprietary offering to end consumers. This strategic approach fosters the perception that the product is exclusively associated with the brand.

Pros & Cons

Pros:

• Avoid high upfront costs
• Quickly start selling a product
• Sell supplemental merchandise
• Improve customer access
• Rapid brand growth

Cons:

• High competition
• Lack of differentiation
• Less control over quality

Examples of White Labelling Brands

While white labeling is more prominent in the software and SAAS industry, it is prevalent across various sectors, including fashion and the food industry. Here are some examples:

Fenty Beauty

Fenty Beauty, founded by Rihanna, partners with Kendo Holdings to produce cosmetics under its white-label products. This manufacturer also creates makeup products for other brands like Kat Von D, Marc Jacobs, Lip Lab, Bite Beauty, and more.

AliExpress Dropshipping

AliExpress, a China-based ecommerce platform, allows resellers to sell its products under their individual brand names. This approach is known as dropshipping. 

In this model, the AliExpress seller takes care of product manufacturing and shipping, while the reseller focuses on building a brand and driving sales.

Freemium

The freemium model is a widespread approach in the digital product industry, enabling users to start with a free product version. However, you can upgrade to a premium plan to access additional functionalities.

How does it work

The freemium business model offers a free trial to attract potential customers. While users can continue using the free version, companies use various strategies to prompt them to upgrade to the premium version.

Pros & Cons

Pros:

• Cost Savings
• Virality
• Increasing User Base and Monetizing It
• Reducing Barriers to Market Entry
• Free Beta Testing

Cons:

• Limited Support & Features
• Usage Quota Limits

Examples of Freemium Business Model

Here are a few of the most outstanding freemium business model brands: 

Canva

Canva rode its freemium model, achieving a $40 billion valuation. Positioned as a user-friendly alternative to Adobe Photoshop, it offers free graphic design tools accessible through web browsers. 

Moreover, users can access advanced design tools, premium templates, and a stock-image library by subscribing to Canva’s Pro plan at $119,99 per year. 

Skype 

Skype provides free account setup and software download for making videos or voice calls. But for more advanced features, such as calls to landlines or mobiles, you need to incur a small fee, still more affordable than traditional phone charges.

Types of Ecommerce Based on Technologies

As more people use mobile phones and voice commands for online searches, innovative technology-driven ecommerce methods are swiftly emerging. Now, let’s explore a couple of these inventive approaches.

Mobile Commerce

M-commerce (mobile commerce) involves purchasing and selling goods and services via wireless devices such as smartphones and tablets. This flexible approach gives access to online shopping platforms without requiring a desktop computer.

M-commerce encompasses three main approaches to combining mobility and business. M-commerce includes in-app purchasing, mobile banking, virtual marketplace apps like Amazon’s mobile app, and digital wallets like Apple Pay, Google Pay, and Samsung Wallet.

How does it work

Numerous industries can leverage m-commerce, such as event ticketing, healthcare, finance, gaming, hospitality, retail, and banking. M-commerce works under various transaction categories:

• Mobile shopping: Enables users to explore products on their phones through optimized apps, websites, and social media. They can compare items and place orders seamlessly using this type of m-commerce.
• Mobile banking: Allows users to conduct banking transactions conveniently on their mobile devices, eliminating the need for computers.
• Mobile payments: Enable users to conveniently pay for goods and services through their mobile wallets, eliminating the need for cash or card swiping. Additionally, users can make money transfers using cards linked to their mobile devices.

Pros & Cons

Pros:

• Time-saving
• Access anytime and anywhere
• Omnichannel experience
• Improve customer experience
• Better customer deals
• Easy to use 

Cons:

• Risky Investment
• Poor execution
• Security vulnerabilities
• Payment issues

Examples of Mobile Commerce 

Here are some highlight examples of mobile commerce model:

Alibaba & AliExpress

Alibaba Group and AliExpress are prominent Chinese online and mobile eCommerce platforms that allow manufacturers to sell their products globally

AliExpress uses a high-contrast color palette, mainly red, to emphasize search, flash specials, and discounts. 

The shopping cart layout is user-friendly, categorizing items by store and additional time.AliExpress also features a versatile filtering tool adjusting to different product searches.

Amazon

Amazon is a multinational e-commerce company founded by Jeff Bezos in 1994. It is one of the world’s largest online marketplaces, offering an extensive range of products, services, and digital content. 

Amazon’s mobile commerce platform is accessible through its mobile app, available on iOS and Android devices. The app allows users to browse, search for, and purchase a wide variety of items, including electronics, books, clothing, home goods, and more.

Voice Commerce 

Voice commerce, also known as V-commerce, enables customers to purchase products through voice commands using voice assistants like Amazon’s Alexa, Google Home, or chatbots. 

This form of ecommerce provides businesses with insightful data to enhance customer experiences, including feedback, orders, and trends.

According to Yang Zhang, CEO of Plasmic, “Voice presents the most comprehensive data on how customers engage with our brands, providing insights throughout the entire customer journey, from awareness to purchase.”

How does it work 

Voice commerce is designed for simplicity. From a consumer perspective, all you need is your voice and the necessary technology to facilitate the sales transaction. Here are the essential requirements:

1. You need a device with an active voice assistant, such as a smartphone, smart device, or specific voice-activated devices like Microsoft Cortana or Samsung Bixby. These devices should have a functioning built-in microphone with enabled voice commands. 
2. A trigger word (often a verb or action) is necessary to start a voice search or voice commerce. For instance, if you say the command, “Siri, order product XYZ,” the word “order” serves as the trigger.
3. To achieve fully hands-free voice commerce, automated payment is crucial. Payment can be processed through subscription platforms like Apple’s App Store or Amazon Prime.

Pros & Cons

Pros:

• Purchasing convenience
• Review convenience
• Customer data
• Opportunities for growth

Cons:

• Lack of visuals
• Privacy and security concerns
• Specific items for specific queries

Examples of Voice Commerce 

We will show you voice commerce examples you should know.

Sirikit

Sirikit is a program enabling iOS apps and watchOS apps to interact with Apple’s voice assistant Siri network. Users can ask Siri to perform tasks like booking flights, ordering takeout, or purchasing groceries.

Alexa Skills Gallery

Amazon’s Alexa has launched a new connection between businesses and consumers via voice commerce. According to Amazon’s site, Skills improve Alexa device capabilities through voice commands, spanning activities like gaming, podcasts, relaxation, meditation, and ordering food.

The Skills Store offers a multitude of skills, including shopping. In this category, users can search for products, find deals, and request tracking information. Alexa facilitates product inquiries and order confirmation with a straightforward “yes.”

Types of Ecommerce Websites

Now that we’ve explored various ecommerce business and revenue models, let’s  delve into the final factor: the type of website they use for conducting sales.

Individual Brand Website (One Seller)

An Individual brand website is the process of creating a brand identity for a person or company, selling products or services on its website. 

Pros & Cons 

Pros:

• Preservation of parent brand’s reputation
• Diversity in marketing methods
• Variety in customer outreach and service
• Autonomy in producing lower-quality products 
• Flexibility in brand positioning due to reduced corporate identity
• Multi-level customer loyalty acquisition opportunity

Cons:

• Increased risk of instability 
• Potential for substantial costs associated with a new brand name
• Lack of regular customers & acknowledgment
• Increased number of human resources

Examples of Personal Brands 

Implementing an individual brand marketing strategy allows companies to introduce products as unique entities, offering several advantages. Let’s explore this through the examples of prominent corporations such as Procter & Gamble and Unilever.

Procter & Gamble

Established in 1837, this well-known American corporation hosts a portfolio of trusted brands. P & G boasts 65 leading brands, organized into ten distinct categories encompassing diverse products like Baby Care (All Good, Luvs, Pampers), Fabric Care (Ariel, Bounce, Cheer), and Skin and Personal Care (Gillette, Ivory, Native, and more).

Unilever

Founded in 1929, this British consumer goods giant operates through three distinct divisions, each housing a range of renowned brands. Notable names like Cornetto, Magnum, and Lipton reside within the Foods & Refreshment segment. 

With a global presence in 190 countries, Unilever’s extensive portfolio of over 400 brands enables them to connect with diverse customer bases.

Online Retailers (a Select Number of Sellers)

Online retailers combine products from various vendors on a single platform, ensuring a cohesive experience. They can choose which vendors to feature and commonly handle product images and descriptions for a seamless process.

Pros & Cons

Pros:

• Easy access to multiple markets
• Reduced overheads
• Potential for rapid growth
• Possibility of Fast Expansion
• Low Setup & Operating Costs

Cons:

• Security
• Website Prices
• Authenticity and Fraud
• Advertising costs
• Infrastructure costs
• Customer trust

Examples of Online Retailers

Here are a few examples of online retailers to inspire your aspiration:

Amazon

Established in 1994 by Jeff Bezos, Amazon has grown into a global e-commerce powerhouse. It functions as both a retailer and a marketplace, offering a wide range of products across diverse categories. 

Third-party sellers can tap into Amazon’s vast customer base through the Amazon Marketplace. Amazon’s innovations like Prime membership and Fulfillment by Amazon have redefined convenience and customer satisfaction on a global scale.

eBay

Founded by Pierre Omidyar in 1995, eBay introduced a transformative approach to e-commerce with its auction-style and consumer-to-consumer (C2C) platform. 

This platform enables individuals and businesses to buy and sell through auctions and fixed-price listings, fostering trust and reputation within its community. 

With features like eBay Stores and integration with PayPal, eBay has reimagined online commerce by offering a unique auction-driven marketplace experience.

Online Marketplaces (Multiple Sellers)

The business model shows how internet-based marketplaces attract buyers and sellers, generate revenue, and maintain competitiveness. 

It shares similarities with traditional business models while also having unique features. These include overhead expenses, eCommerce accounting, marketing strategies, and target audiences.

Pros & Cons

Pros:

• Brand image identity 
• Wider reach
• Less technical hassles
• Customer trust
• Excellent customer service
• Management of shipping and delivery

Cons:

• High competition
• Delays in payment
• High commissions 
• Social media marketing costs
• More focus on the product instead of the brand

Examples of Online Marketplaces

Etsy

Etsy is a unique and creative goods two-sided marketplace, earning revenue from transaction fees on its platform’s sales. The essential partners for Etsy are the individual sellers offering exclusive listings, while the platform benefits from a broad and organic reach through various marketing channels

Uber

Uber operates as a platform-based two-sided marketplace, connecting drivers and riders through a user-friendly interface with gamification elements. Its revenue creates from fees collected from the platform’s gross bookings.

Ecommerce business model: FAQs

Bottom Line 

The ecommerce business model has fundamentally transformed commerce by leveraging technology to offer convenient, accessible, and innovative ways for businesses to engage customers and drive economic growth.