So, you’re ready to start your online business journey? Well, you’ve come to the right place. In this video, I’ll be teaching you all about the different eCommerce business models so you can choose the right one for you.

Are you ready to start an online business but totally overwhelmed and confused as to which direction to go? Well, you’re not alone and that’s why we’ve created this video to help you make sense of the different types of eCommerce business models so you can figure out which one is right for you.

Ready? Let’s go!

So, when it comes to talking about business models, many people instantly think B2B or B2C (and sometimes even C2C and C2B). And while it is important to understand who you’re going to sell your products to, that’s not exactly what I’m going to be discussing today.

In this article, we’ll be discussing less about who gets your products and more about how they get them.

Ecommerce Business Models

Like many things in business, there is not a definitive list of every single way to do things. People are constantly coming up with new and innovative ways to do business online that doesn’t fit in one category or another. That said, there are six common online business models that I’m going to talk about today: dropshipping, print on demand, wholesaling, private labeling, white labeling and subscription models.

Dropshipping

So, first, let’s talk about dropshipping.

Dropshipping is, by far, the easiest way to start an online business. If you’re unsure what dropshipping is, it’s an eCommerce model whereby the retailer acts as a middleman between the supplier or manufacturer and the customer. Essentially, dropshippers never hold any inventory, so when they sell a product to a customer, they purchase it straight from the supplier who ships it direct to the customer. It’s pretty simple, actually.

Over the past few years, it has become even easier to get into dropshipping. Chinese dropshipping platform AliExpress provides an easy way for potential online business owners to find products to sell. Now, the vast majority of dropshipping products sold online today are from AliExpress because this easily accessible platform is so intuitive to use and you don’t need to pay for access like you do with many other dropshipping directories. That said, AliExpress isn’t the only place to find winning dropshipping products, but it is good for beginners to get started.

Dropshipping, and dropshipping from AliExpress in particular has become so popular that many eCommerce website builders have in-built systems to help eCommerce store owners import products quickly and easily, without much work at all. And that includes the Dashnex PowerTech Ecom Builder, which you can get a huge discount on here.

It should also be mentioned that with the dropshipping eCommerce model, there are sub-models within it that you really need to consider too. We won’t discuss that in this video but you can head to this article which tells you all about it.

Pros of Dropshipping

Cons of Dropshipping

Print on Demand

Print on demand is very similar to dropshipping but it allows eCommerce business owners to personalize and customize their products. The concept behind print on demand is that once a product is sold, a print on demand supplier custom-prints an order and ships it direct to a customer.

A great example of companies using print on demand services are t-shirt companies selling funny t-shirts. Instead of holding mountains of stock, all in different sizes and colors, the eCommerce store lists all the various options for sale on their store, which only get made once they have been purchased.

These days print-on-demand services like Printify, Printful and Gooten have a range of products that extend well beyond the humble t-shirt. From clothing to homewares and everything in between, print on demand services allow you to get a little more creative than the standard dropshipping model.

Pros of Print on Demand

Cons of Print on Demand

 

Manufacturing and Private Labelling

Manufacturing is a model that sees you create a product, either yourself or by an external manufacturer. For those eCommerce entrepreneurs who have a specific skill or talent and can create a product based on that, they can create an eCommerce business which sells this product for a profit. But this model won’t be for everyone because a. Not everyone is blessed with such talents and b. Unless you can sell it for a price that reflects the time you spent on it or in high volume, you won’t make any money from it! If I had a dollar for every time I said ‘I could make that…’, tried and realized it wasn’t worth it…

So, when it comes to manufacturing, the most common route that most eCommerce entrepreneurs will head down is finding a manufacturer that will help them bring their idea to life. India, China and Indonesia are really popular places to find suppliers because the cost of both materials and labour are significantly lower than in Western countries, meaning you should be able to get your product manufactured so you can sell it at a profit.

When you manufacture something, you are generally creating a private label. The products you create will have your branding both on the product and packaging. With this eCommerce business you generally must buy in bulk and warehouse your product. When a customer buys from you, unlike dropshipping, you’ll be responsible for packing and shipping the item to the customer.

Pros of Manufacturing

Cons of Manufacturing

 

White Labelling 

White Labelling the eCommerce business model lovechild of dropshipping and manufacturing. Just like with dropshipping, you find a winning product that is already selling well. And just like manufacturing, you brand it as your own. Depending on what the item is, you may be able to brand the product or the packaging, or sometimes both!

Unlike dropshipping though, you’ll generally need to purchase a minimum number of products to white label them, meaning you’ll also have to store, pack and ship them too. 

Pros of White Labelling

Cons of White Labelling

 

Subscription

A hugely popular eCommerce business model is the subscription model. The concept with a subscription model is that customers pay monthly or at some other agreed interval for a product or service. This works well for software companies and eCommerce tools but it’s also a great idea for products that people want or need on a monthly basis.

The Dollar Shave Club is an awesome example of a subscription service that works. It’s also why a large number of subscription boxes have been popping up in recent years too.

Pros of Subscription

Cons of Subscription

So, How Do You Pick Which Business Model Works Best For You?

The biggest barrier to entry for many people when it comes to setting up an eCommerce business is money. The investment that is needed for many eCommerce business models is not something that the regular side-hustler wants to do. And let’s face it, many of us do dabble in eCommerce as a side-gig. 

If you don’t want to invest in a huge stock inventory and want the flexibility of swapping and changing your products, dropshipping or print on demand may be for you.

If you have an idea for a product you’re passionate about and you are happy to invest some cash, you might want to look at manufacturing.

There are a number of reasons you’d choose one model over the other but the simple fact is, I can’t make the decision for you! It’s your job to look at your options, look at your personal and professional goals and your situation so you can make an informed decision for yourself.

So, dropshipping, print on demand, manufacturing, private labeling and subscription. Leave a comment below to tell me which you’re leaning towards and why. And don’t forget to watch the next video on how to find your niche and choose your products.

 

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