Episode 25: Different Types of Ecommerce Businesses - Top 3 Ecom Business Models

There are different types of Ecommerce businesses that you can create, and you have to choose the best model or method that will work best for your store. In this episode, you’re going to learn the top 3 Ecommerce business models.

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In this episode, we are going to talk about three of my favorite Ecommerce business types. These are all fulfillment methods to get your products into the hands of your customers. I’m going through each but something I really want to emphasize is that each method really doesn’t matter TOO much. At the end of the day, what's important is that your customers get the product.

Ecommerce business model #1: Dropshipping
This is one of my favorite Ecommerce business models. In this method, you list the products on your site but your supplier ships the product directly to your customers. That means someone places an order and you send the address and customer details to your supplier and they just send it directly to the customer.

Advantages of this Ecommerce business type:
1. Quickly test out your products and target audience without needing to purchase inventory
2. No need to stock the products yourself

Disadvantages of this Ecommerce business model:
1. The supplier might mess up the order
2. It’s hard to deal with returns
3. You can't personalize the packaging of your products

Ecommerce business model #2: 3PL (Third-Party Logistics)
In this Ecommerce model, you buy the inventory but ship it to a warehouse where another company takes care of packaging it and sending it to customers. So when an order comes in, you send the details to the warehouse and they take care of sending it to customers.

Advantages of this Ecommerce business type:
1. Allows you to not have to rent a warehouse or deal with employees
2. Easily keep your eCommerce store fully remote

Disadvantages of this Ecommerce business model:
1. Wrong products could be sent
2. Shipping could take longer
3. You couldn't customize the packaging

Ecommerce business model #3: Shipping the products yourself
This is where you get the products shipped to your house, garage, or your own warehouse and then ship them out to customers from there. This type of Ecommerce model allows you to make more profits while also having a really high-quality shipping and unboxing experience for your customers. It means that you can ship out orders really quickly and add notes and other gifts for your customers in the packaging.

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