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Business Models in Technology?

Business Models of Ecommerce – Best Options to Buy or Sell in 2018!

It is important for business owners and investors alike, to understand the

foundation and structure of certain ecommerce business models.

This is true regardless if you looking to buy a e-commerce business

online in Los Angeles, California or Orange County. The reason being is,

understanding the base and structure of anything, helps with the preparation

of a great plan.


Foundation – Business Models in Technology

Remember, that the execution of the plan is just as important of

an element, as the structure itself. Having the right knowledge,

will help you consider the best options for your

personal and business needs and growths.


Business Model Mold?

There is no one size fits all, to any business model or business mold,

regardless if it is through ecommerce or not. This is because there

are so many ever-changing external and internal components of

technologies, that can influence the direction and business course.

Remember, electronic commerce draws on many different web and

internet technologies.


Web Tools for Business Technology?

These web tools, are required to advance the mission of online

electronic business expansion. The areas of technologies that

ecommerce derives its success and advancement on, are as followed:

  • Electronic Funds Transfer 
  • Supply Chain Management 
  • Internet Marketing 
  • Online Transaction Process 
  • Mobile commerce 
  • Electronic data interchange or EDI 
  • Data Collection 
  • Inventory Management Systems


Increase in Ecommerce Business Models

With the increase in ecommerce business models, and with sales expected to

exceed 78 percent by 2020, it makes sense to

review the basic structure and operation of each model.

This is because even though this new online marketplace is booming,

it still needs to be understood for complete comprehension.

This trend shows, that many new prospects will be entering

this new digital buying platform, so be ready for it!


Business Trend?

You always want to make sure that you have a solid business plan in place.

This will help to maximize your investment dollars and

end results, without creating any present or future loss.

Think of it, as a risk insurance management

policy, protection for your business future.


Introduction to E-commerce Business Models and Types

So, what are the e-commerce business models that you

need to understand before you buy or build?

They are classified as the following:

  • Business to Business – B2B 
  • Business to Consumer – B2C 
  • Consumer to Consumer – C2C 
  • Consumer to Business – C2B


Business Model – Deciding Factors for Ecommerce

When considering what type of e-commerce business to buy or sell, make sure

you consider a few things before. For example, you will want to identify

the platform that best suits your preferred business model.

This means, what will enhance your current investment or business portfolio.

You can be a current software company owner, looking to add a

new piece of web technology to your current business model.



Or, you might be brand new to the e-commerce marketplace and want to branch

into it, before it becomes overly saturated with buyers and sellers.

Whichever the case, it is always best to understand the framework

and business approach to anything, before you buy, sell or build.


Ecommerce Business Models

First things first. Different types of e-commerce

business models exist, and are listed below

for your convenience and reference:


Do not be alarmed, if everything above looks foreign.

Each item above will be examined in detail and discussed in relation

to each business model platform. The business model platform is geared

towards online electronic commerce exchange and industry.

This means, understanding the inner components to this business

practice, to help decide on the business opportunities available

through both online and e-commerce website purchase and selling.


Discovery of E-commerce Business

Business opportunities are revealed through analysis,

research and close case examinations.

The next area of discussion in these online business article pieces will

be a look at the different forms of e-commerce.


Starting with Drop Shipping!

What is Drop-shipping? Drop shipping is considered by many

online resources, as the simplest form of e-commerce, out there on

the market in 2018! This is because everything is done for the

business owner. Think of Drop shipping as a fulfillment business model.

This allows the products to be bought individually from a wholesaler

and then shipped directly to the online consumer. This is instead of

buying a large inventory base, right up front. This traditional means

can be a costly out of pocket expense, no matter if you are

just starting a new business venture or not.


Business Risks of Drop Shipping?

You always want to consider the risks, and if they outweigh the benefits

of your business model. The supplier in this example would ship

the product directly from the business warehouse to the customer’s residence.

This all takes place for a charge for the shipped items. Yes, that’s it.

Everything else in the transaction process is, handled by your supplier.

This allows more time to be allocated to other important business and operational tasks:


  • Inventory Management 
  • Stock Warehousing 
  • Packaging Dealing

Drop Shipping Case Examples – Where to Locate?

For example, the only area where the business owner or retail owner

needs to be concerned within the transaction process

is the scheduling part of the customer to meet at a storefront.

This is usually scheduled to take money for the product that was

purchased from the customer. You can always go to a supplier directory,

to find drop shipping suppliers. These such suppliers can

be found from directory lists, like the world-wide brand’s website.

You can ask the supplier if they offer any dropships as products.

This will help direct you in the best possible way.


Drop-shipping E-commerce Software

There are examples of drop shippers who use software or web-based technologies

to advance this online marketplace of shopping. This was done in an inexpensive

way, however. This is because the set-up costs are little to nothing.

The software model is easy to set up and can create more online

visibility and traffic to your main business website. Such software

that can advance this goal is, Shopify. This is a popular way to hit

Facebook Ads and increase online exposure in the social arena.


Profit Margins?

It is noted, however, that profits can be extremely thin on this business type platform.

This is in part because, if the seller is slow to act, and you cannot deliver a

high-quality product, deep seeded problems will occur.

This is because business profits are marginal in this business model type,

to begin with, and profits must be squeezed out when possible.

An example of an online e-commerce business site using the

drop shipping function would be, Wackyhippo!

What are the benefits of drop shipping?

Like with many business models and operations,

there are good and bad types of operational functions.


Model Type?

In this example of drop shipping, we will first focus on the advances

of this e-commerce model type.

The advantages of using a drop shipping model are strong.

Some of them include:

  • Lower Capital Requirement 
  • Wider Product Selection 
  • Reduced Risk 
  • Lower Capital Requirement 
  • Wider Product Selection 
  • Location Independence 
  • Highly Scalable


What does Lower Capital Requirement Mean?

The benefit of this data selection from drop shipping should be examined

again to help better explain the answer to this question. This is because,

with Drop Shipping, there is no need to put money up for an investment

of thousands of dollars. That means, you only buy product

or merchandise when an online customer places an online order.


What is Wider Product Selection?

This is an ecommerce business type, where you do not have to

pre-purchase or have in physical stock, merchandise for your

online customers. This means that you can offer a larger selection

of more online products, to your online customer base. This

can help to expand your business income and profit streams.

Just think of the advantages of not having to lease or buy,

extra storage space, or facing the risk of losing any unsold merchandise or products.


New Business Venture and Drop Shipping?

If you are a new business venture, this may look like a

very attractive business model base to buy, sell or build.

This is because, it shows a reduced risk investment, from

not having to lose thousands upon thousands of lost inventory products.

All the risk factors involved in housing products in warehouses,

are avoided with this new way of doing online business transactions.

The risk is drastically reduced, so even if the business venture turns

sour, you are not in the hole for the lost product or merchandise.


Location Business and Remote

Freedom Not having to rely on or worry about running a fulfillment

agency or warehouse is one thing. Doing it from anywhere in

the world is another thing. This independence from location strings is very

attractive to all types of buyers of e-commerce businesses.

This is because, it can easily adapt to an existing retail, brick and

mortar business regardless of the retail business is in the city

of Long Beach, California or Garden Grove, CA.



So, outside of having the independence of working from anywhere

in the world, the business is also, highly scalable.

Highly Scalable Business Model This is because, as we already mentioned,

the manual labor part is removed from the buying and

selling transaction process. So, this can help an ecommerce business,

with the control and freedom to easily scale a drop shipping business.

These are attractive online business decisions and incentives.


Business Consideration?

You will want to consider them when deciding if drop shipping is

the right type of ecommerce business for you. Now that we

have discussed the advantages of having

a drop shipping e-commerce business, let us discuss the cons.


Disadvantages of Drop Shipping and Ecommerce?

The most popular reason for a disadvantage of this business model is the

increased competition. It is not like you think, however. The problem does

not start with increased competition. This is just an aftereffect of the

ecommerce buying trends in 2018. Since many new business investors are

hitting the ecommerce buying stage, this type of ecommerce type is very attractive.




Because, it allows for little capital upfront, or, to have a physical

storage place for products, like a warehouse facility. The attractive qualities

of owning your own online business, without any physical strings per se,

is very appealing to many. But this appeal also works as a disadvantage.

Yes, this happens, because with an increasing pool of new buyers and

sellers of ecommerce, so are more buyers and sellers for drop shipping ecommerce.


High Competition, Low Margins

This business phenomenon can happen in many business types,

regardless if they are online or not. This is because, the more

competition, the more diluted the business investment and

profit pool becomes. This is because, the access point to this new business flow,

is backlogged with this new surge of online users, who are interested

in entering the field of information and technology science.

With these new business trends forecasting even more buyers

and sellers of information and technology, only more will be

entering the online marketplace for buying and selling purposes.

This channel of business and information trade, will now overflow

or become overconcentrated. This only exacerbates the idea of a

face to face meeting, which is recorded by e- commerce educational

online sites.


Concluding Thoughts: Lower Profit Margins for Ecommerce Business?

Unfortunately, this surge of online buyers and sellers, from quality

content and efficient help, only lowered the margin for supermarket

placement. This is because, it makes it harder to finically grow as a

business if you cannot afford to spend money on advertisement.

This is because, now with so many new people and companies hitting

the industry, advertisement becomes attractive and expensive.

These should be considered in your business plan, when approaching

new ways of e-commerce business models.

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