There are many different types of ecommerce businesses, each with its own unique advantages and disadvantages. In this article, we will explore the most common types of ecommerce businesses: those that sell physical products, digital products, subscription-based products, and services as products.
Let’s dive right in!
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Ecommerce and its benefits
Commerce has been around for centuries, and the advent of the internet has only made it easier. Ecommerce is simply the buying and selling of products or services over the internet. This can be done through a website, an online marketplace, or an electronic commerce application.
Benefits of ecommerce include:
- Reduced costs: Ecommerce businesses do not need to rent physical space, hire sales staff, or invest in inventory. This reduces overhead costs and allows businesses to sell products at a lower price.
- Greater reach: Ecommerce businesses can sell to customers all over the world without having to open physical stores in each country.
- Increased efficiency: With ecommerce, customers can buy products 24 hours a day, 7 days a week. This increases customer satisfaction and leads to increased sales.
- Improved customer service: Customers can easily find product information and reviews online. Ecommerce businesses can also provide live chat support, which further enhances the customer experience.
Now that we know a little bit more about ecommerce let’s take a look at the different types of ecommerce businesses.
Different types of ecommerce businesses
1. Physical product ecommerce businesses
Physical product ecommerce businesses are those that sell physical goods. This could be anything from clothing to electronics to home goods. Physical product ecommerce businesses usually have to deal with inventory, shipping, and returns.
The most common type of physical product ecommerce business is the online retailer. Online retailers sell products through their own website or an online marketplace. They are responsible for manufacturing, shipping, and returns.
Other types of physical product ecommerce businesses include:
- Manufacturers: Manufacturers produce products that they then sell to retailers or customers directly.
- Wholesalers: Wholesalers purchase products from manufacturers in bulk and then sell them to retailers at a lower price.
- Distributors: Distributors purchase products from manufacturers and then sell them to retailers or customers.
2. Digital product ecommerce businesses
Digital product ecommerce businesses are those that sell digital goods. This could be anything from music to software to ebooks. Digital product ecommerce businesses do not have to deal with inventory, shipping, or returns.
The most common type of digital product ecommerce business is the online retailer. Online retailers sell products through their own website or an online marketplace. They are responsible for manufacturing, shipping, and returns.
Other types of digital product ecommerce businesses include:
- Software as a service (SaaS): With SaaS businesses, customers can subscribe to use a software application. The business then charges a monthly or annual fee.
- Music streaming: Music streaming businesses allow customers to listen to music online. Customers can either pay a monthly or annual subscription fee, or they can purchase individual songs.
- Ebooks: Ebook businesses sell digital books that can be downloaded and read on an electronic device.
3. Subscription-based ecommerce businesses
Subscription-based ecommerce businesses are those that sell products or services on a subscription basis. This could be anything from food to clothes to beauty products. Subscription-based ecommerce businesses usually have to deal with inventory, shipping, and returns.
The most common type of subscription-based ecommerce business is the online retailer. Online retailers sell products through their own website or an online marketplace. They are responsible for manufacturing, shipping, and returns.
Other types of subscription-based ecommerce businesses include:
- Food delivery: Food delivery businesses deliver meals to customers on a weekly or monthly basis. Customers can choose from a variety of meal plans.
- Clothing rental: Clothing rental businesses allow customers to rent clothes on a monthly or annual basis. Customers can choose from a variety of clothing options.
- Beauty box: Beauty box businesses send customers a box of beauty products on a monthly or quarterly basis. Customers can choose from a variety of beauty boxes.
4. Service-based ecommerce businesses
Service-based ecommerce businesses are those that sell services. This could be anything from haircuts to car repairs to home cleaning. Service-based ecommerce businesses do not have to deal with inventory, shipping, or returns.
The most common type of service-based ecommerce business is the online retailer. Online retailers sell products through their own website or an online marketplace. They are responsible for manufacturing, shipping, and returns.
Other types of service-based ecommerce businesses include:
- Hair salon: Hair salons offer a variety of services, such as haircuts, hair color, and hairstyles.
- Car repair: Car repair businesses offer a variety of services, such as oil changes, tune-ups, and brake repairs.
- Home cleaning: Home cleaning businesses offer a variety of services, such as housekeeping, laundry, and window washing.
Which type of business is right for you?
Now that you know the different types of ecommerce businesses, you can decide which one is right for you. If you want to sell physical products, you could start an online retailer or a marketplace business. If you want to sell digital products, you could start an online retailer or a software-as-a-service business. If you want to sell subscription-based products, you could start an online retailer or a food delivery business. You could start an online retailer or a hair salon if you want to sell services. Whichever type of business you choose, make sure you do your research and create a well-thought-out business plan.If you need further help with setting up your ecommerce store, or you are looking to hire a creative digital marketing agency to take your business to the next level, contact our team at Brandshark. We are a full-service digital agency that specializes in ecommerce design and development, as well as digital marketing. Our team can help you create a beautiful and user-friendly ecommerce website, as well as drive traffic and sales to your store. Contact us today to learn more.