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E-Commerce Business Models


E-Commerce Business Models

Web evolution has resulted to the development of various e-commerce business models that can be used to monetize web traffic. Lots of people make use of these for their businesses and some of the most commonly used models include the following:

Auction Based System
One of the best examples of an auction based system is EBay. This is a centralized marketplace where goods can be listed by the seller and that can be purchased by the buyer through an auction system. Of course, the goods being sold will then be transferred to the highest bidder once the auction timer run out. Aside from that, goods can also be listed at an agreed price and EBay earns from this through a percentage of every transaction value.

Retailer – Merchant
This is among the most popular e-commerce business model. In this model, vendors offer goods and services to customers through a virtual storefront where the goods can be purchased. Customers can make purchases using credit cards and once payment is done, the goods will then be dispatched for delivery. Once classic example of this model is Amazon, which is in the corporate level. However, there are smaller stores that are operated by individuals and organizations as well.

The affiliate model is operated by vendors of digital products or retailers and the transaction normally goes through a centralized exchange. In this transaction, a certain amount of fee is taken by the vendor and the affiliate responsible for making the sale is given a percentage of the profit. This is also one of the most popular e-commerce business models, as most profit-sharing arrangements can encourage owners to enrich the content of their sites in order to sign up affiliates to promote their goods or services to a larger market.

Membership Site
This is one of the newest models for e-commerce businesses. In this, vendors provide a site with valuable contents in exchange to a monthly payment that will be paid by the member or the subscriber for an indefinite period of time.

Pay on Demand
In this model, goods or services are provided based on the customer’s needs. In a pay-on-demand model, customers are required to pay a one-time fee or will be asked to buy credits in order to make use of the services offered by the site and this model is normally used by research-based websites.

Advertising – Publisher Model
Advertising networks and search engines can charge a fee for the listing of goods and services according to the most suitable search term. This is normally done through keyword bidding processes and is normally paid for a fixed price or fee. It could also be in the form of a banner or a set that is charged according to the number of displays. Most website owners offer this service under a publishing agreement with the client or the advertiser where they will earn a percentage of the revenue that will be generated from the ads or the displays placed on their website. This is considered as the most popular among all types of e-commerce business models.

These are just some of the options that you can go for when it comes to e-commerce business models. Take note that you can also combine any of these models or come up with a hybrid model to make it more effective and profitable for your business.

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