What are the Best Ecommerce Business Models in 2023
The key idea here is “for you”. There are different ways to set up an online business, like drop shipping, Amazon FBA, or having your own online store. But there isn’t a single best way. However, there’s probably an eCommerce plan that’s perfect for you.
One that matches your experience level, Or the other one that fits your budget. And one that matches how comfortable you are with taking risks. Picking the right eCommerce plan for you is the most important thing for your long-term success.
You can find a great product, a reliable supplier, and use clever marketing strategies. But if your business foundation isn’t right for you, it will be tough to succeed. Let’s take a look at the best eCommerce business models.
What are the Best eCommerce Business Models?
Now that you’ve identified your customers, you can begin considering how to organize your business. You’ve likely heard of eBay, Amazon, and Shopify, and you may be familiar with drop shipping. But how do you determine which business model and online platform is most suitable for you?
There are often individuals offering quick fixes and shortcuts online, but this is genuine guidance for those who want to establish a legitimate business. So, let’s examine the best eCommerce business models.
Dropshipping via Online Store
Dropshipping is one of the most popular business models for newcomers to eCommerce. Why? Because it’s very affordable to begin with. You don’t have to buy a lot of stock upfront. There’s no need to pay for storage space.
Plus, your supplier handles the shipping. So, what’s your role? You’ll need to invest in creating your own online store. While it’s possible to do dropshipping through Amazon, eBay, or other marketplaces, the high competition and fees there can make it hard to make a good profit.
You can choose that path if you want, but I suggest starting with your own online store. You can use platforms like Shopify, WooCommerce, or SaleHoo Stores to easily set up your own eCommerce store.
It doesn’t have to be expensive, and it gives you your own platform that’s not crowded like the big online marketplaces. How to find a suitable ecommerce business model? Above is the answer to your question.
Amazon FBA with your own branded product
A private label product is like when you put your own name on something. You can buy a regular item from a supplier and have them stick your brand on it. Or you can work with a maker to create something special. These branded products usually cost more because they are unique, and having a brand makes them more valuable.
Amazon FBA, or Fulfilled by Amazon, is a service from Amazon. You pay them to store your products in their big warehouses, and they take care of packing, sending, and helping customers with your stuff.
This way, you don’t have to worry about those tasks, and you can focus on other parts of your business like selling and advertising. While choosing the best eCommerce business model you need to keep these things in mind.
Wholesale sourcing and selling via eBay or Amazon
This eCommerce business model is for people who want to sell products online on big websites like eBay, Amazon, Etsy, Rakuten, and more. Instead of creating their brand, they want to earn money by selling existing products.
Here’s how it works: You buy products in large quantities directly from suppliers at a lower price because you’re buying a lot. This means you need to have enough money to buy a big batch of products, and you should be sure you can sell them all.
You’ll also need a place to store all these products unless you use Amazon FBA, which we talked about earlier. Even though this approach needs a big upfront investment, it can help you make more money over time. So Which eCommerce business plan suits you the most? You need to decide it yourself!
Wholesale Sourcing and Selling via Your Own Website
This eCommerce business model is for people who are really committed to putting time and money into building an online business. It’s the same as the third business model we talked about, but with one big difference: you sell your products through your very own online store.
Here’s the deal: You find products at the lowest possible cost and sell them for the highest possible price, without having to pay extra fees to Amazon or eBay. The big advantage here is that you can make more money. No doubt, B2B Ecommerce is the trendiest to do.
But there’s a catch you must be all in to make your business succeed. You not only need money to buy products in bulk, but you also have to create and manage your own online store. Plus, you need to figure out how to bring lots of visitors to your site. And once they’re there, you have to convince them to buy from you consistently.
Selling a private label product via your own online store
This business model demands the most money, time, and effort. As they say, success often comes after hard work. In this approach, you create your very own brand and a unique product with your label on it (as explained earlier). Then, you sell it on your own website. It’s the most self-reliant model, meaning you reap all the rewards, but you also shoulder all the responsibilities.
First, you must find a trustworthy supplier or manufacturer who can make your branded product and agree on a fair price for buying a large quantity. This eCommerce business model works best for professionals.
You also need to build your own website using an eCommerce platform like Shopify, WooCommerce, or SaleHoo Stores. This gives you complete control over how your store looks and how your brand is presented, which is different from the strict rules of established online marketplaces. However, it’s entirely up to you to attract customers to your website and make sales, which can be quite challenging.
Getting this step right is crucial. Establishing a strong foundation for your business will help you navigate challenges and increase your chances of success. If you’d like additional guidance in choosing the best business model for you, you can take a quick and easy quiz.
Based on your responses, the quiz will recommend the business model that matches your experience, budget, and willingness to take risks. With your eCommerce business’s structure in place, you’re already ahead of those who rush in without a plan. Don’t forget to try out the best eCommerce business models.