Picking an eCommerce Business Model
B2B (business to business), B2C (business to consumer), drop shipping, direct sales, wholesale: You may be familiar with some of these terms, but what do they actually mean and more importantly, why do they matter?
It is imperative to understand how these models differ from one another and how they impact what and to whom you sell to.
Three basic eCommerce business models
- Direct Sales / B2C (Business to Consumer)- Any product sold directly to the customer is considered direct selling or B2C. This means there are no middlemen between you and your customer. Most eCommerce startup businesses are B2C
- B2B (Business to Business) / Wholesale- Products that are bought or manufactured and then sold in bulk to a distributor are considered those involved in a business to business (B2B) transaction. The company or person(s) your products are sold to (in bulk) will turn around and “distribute” them in smaller quantities directly to consumers (B2C). [su_spacer size=”18″]For example, if you wanted to sell your products to Wal-Mart, you wouldn’t just sell one unit, you would sell large quantities like a 1,000 or 10,000 units.The main advantage of B2B selling is that you don’t have to deal with the end-user and you are paid up fron