eCommerce Business Models That Are Killing It Right Now

Written By Alla Levin
April 20, 2020
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eCommerce Business Models That Are Killing It Right Now

We all know that eCommerce companies do well for themselves.

The market grew at a double-digit rate over the last decade. And that trend looks set to continue.

Some business models, however, are working better than others in 2020. 

But what are they? And why are they doing so well? 

Let’s take a look. 

Dropshipping

Dropshipping is one of the most important innovations in eCommerce ever.

Here, you set up a shop front online, and then a supplier takes care of the fulfillment.

It’s a plug-and-play solution that eliminates the need for extra work. 

Customers buy your products online. You collect the payment, and after that, your supplier ships the order to the supplier. You then skim profit off the top. 

It is surprisingly simple to set up too. Brands like Oberlo and Shopify provide you with all the tools you need to get going.

Once you set it up, you can begin shipping without worrying about building out your infrastructure. 

White Label A Productimportant innovations in eCommerce

“White labeling” is fast becoming one of the most popular methods for selling online. 

Here, you’re not just selling another brand’s products. Instead, you take their product, rebrand it, and sell it under your name.

Typically, you find this type of strategy in the health and beauty sector. You sell the label, and then share profits with the manufacturer.

Just be sure that you get the permission of the company first. You don’t want a lawsuit on your hands. 

Subscription Models

Wondering how to sell on Amazon 2020-style? Well, your best bet is to take cues from the eCommerce retailer itself.

If you go on the company’s website, you’ll see that it pushes subscription payments.

Customers can automatically buy items on repeat from selected vendors. And the strategy is proving very lucrative. It means that they don’t have to remember to log onto Amazon.

They pay without having to do anything, just like a direct debit. 

It is actually easy to get in on the action. You don’t need a subscription box. Any product that customers need to replenish regularly will suffice.

Just provide the option, and Amazon will do the rest.

Private LabelingPrivate Labeling

Sometimes you have an excellent idea for a product but not enough money to set up a factory. What do you do in a situation like that?

You copy what all great eCommerce companies do: outsource. 

Private labeling is where you put your badge on a product made by another company. You send them your design, and then they recreate faithfully.

Both of you then share in whatever profits the product makes. 

Often, private labeling is a much better option than selling directly.

Third-party companies are often able to get prices down much lower than you can.

And that means that you wind up making higher profits, even if you don’t control production. 

There are, of course, many more opportunities to make money in the eCommerce sector.

Setting up a company that fulfills orders is an excellent way to go. But these ideas should get you started.

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