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What Are the Best Ecommerce Business Models In 2020?

May 28, 2020 eCommerce TipsEntrepreneurs

There are many e-commerce business models out there, which makes it challenging to choose one to bank on. It may even be more difficult if you are a newbie to ecommerce. However, it is important to know that your chances of success in the ecommerce business most times will depend on the model that you choose. In this article, we’ll be discussing five best ecommerce models for you to choose from in 2020.

Dropshipping via Online Store

If you’re just getting started with e-commerce, then dropshipping might just be the best option for you. This business model doesn’t require you to have so much as the cost of getting started, as you don’t have to buy stock in bulk.

The supplier in this business model takes care of things like the storage facility, inventory, and even shipping. A customer places an order on your store; your supplier is notified. Then they supply and ship the product to your customer.

You only need to set up an online store with the help of platforms like Shopify, list your products for sale, and then use marketing or any other ways to drive traffic to your website and make sales.

Amazon FBA with Your Own Branded Product

This business model involves creating a private label product for your brand and selling it using the medium of Amazon FBA. A private label (or branded) product is a product that carries your brand. You can start this model by sourcing and buying in bulk a generic product from a supplier and ask them to have it branded by printing your brand on it. You can also work with a manufacturer to create a unique product.

After this, you then use the service of Amazon FBA, a fulfilment service, to store the products in their fulfilment centers. They’ll then pack, ship, and also be in charge of the customer service for these products on your behalf. You’ll have to pay Amazon FBA for their service.

 This e-commerce business model is best for people who have money to invest in their business and want to create their own brand or those that want to outsource storage and customer service.

Wholesale Sourcing and Selling Via eBay Or Amazon

Unlike the previous model, this model doesn’t need you to have a branded product. If you don’t want to launch a branded product, but want to make a good profit on an established marketplace, then this is for you.

This e-commerce business model involves you negotiating with suppliers to purchase products in bulk. In this model, you need enough money and confidence to place a large order and to be able to sell it all.  You’ll also get a better purchase price since you’ll be purchasing in large quantities; this will give you a higher profit margin, which means more money on sales.

This e-commerce business model is best for people who is ready to source a large quantity of product, have a place to store their stock, and ready to handle shipping and customer service.

Wholesale Sourcing and Selling Via Your Own Website

This is the model being used by many major retail companies who have significant capital to invest upfront. To use this model, you must be ready to invest a good amount of time and money for wholesale buying.

Here, you source products in wholesale at the cheapest price possible and sell them for the highest possible amount. You don’t need to pay extra fees to any Amazon or eBay because you’ll be the one to build your online store, market, handle shipping, customer service and drive the traffic to your site for sales.

It’s riskier than the other business models in that inability to convert enough customers; you’ll be stuck with excess stock. However, if you have the ability to make sales, the payoff can be really huge!

Selling a Private Label Product via Your Own Online Store

Now, this is the most independent of all the ecommerce business model. Everything about this model boils down to you. It’s your brand, your private label products, and your platform. It’s the gold standard of business model, and you have to shoulder all the responsibility in this model.

This is the ecommerce business model to go for if you’re serious about building a brand and a business that makes serious money. However, to make serious money, you’d have to invest the most money, time, and work.

You’ll need to find a reliable supplier or manufacturer who can produce your branded product, then negotiate a fair price for bulk purchase.  You’ll need to build your website; you can use platforms like Shopify and WooCommerce to build, and you get to have full control over the design and branding of the store.

 

There you go! Above are five proven and best ecommerce business models in 2020. As mentioned earlier, the chances of success in ecommerce business depend on the model that you choose. The more reason for you to have or adopt a model that fits your target niche, time, resources, and you’re your capabilities.

Contact us today at Fulfillman to know more about our services. We specialize in providing excellent Drop Shipping services, Warehouse fulfillment, China sourcing, Third Party Logistics, and so forth. Our dedicated experts will be available to speak with you and discuss the options available to you. We guarantee you get quality and excellent services that gives 100% client satisfaction.