Ecommerce Business Models – What Are the Common Types of Ecommerce?

Ecommerce is basically the act of physically buying or selling goods over the Internet or on online services. Online stores or marketplaces are popular places to purchase goods since they give you a wide array of options for shopping. Since the technology has made it possible to reach out to millions of people with just one click, there has been a tremendous increase in the number of people going online to buy and sell almost anything. The online marketplaces provide a great platform for buyers and sellers to meet each other.

The birth of ecommerce started with the growth of the World Wide Web. The internet has provided a very convenient shopping avenue for millions of people. People can browse the internet and search for almost any product that they want to buy. Most businesses have their own websites through which they are able to make their products known to the prospective buyers.

There was a time when these businesses used to sell directly to the consumers but now as the ecommerce business got more popular, they have developed more sophisticated ways of reaching out to the prospective customers. The traditional way of starting an ecommerce business involved searching a big warehouse or outlet for the merchandise. This overhead cost was very expensive for small enterprises and they had to make do with buying goods from wholesalers or factories which specialized in manufacturing these products. It also consumed a lot of time and most of the times there were problems related to delivery. However, with the advent of ecommerce websites, this problem too has been eliminated.

Many businesses started using ecommerce websites to sell their products as there was no need to locate a warehouse to store their goods. Even though this worked well initially for these businesses, as the popularity of ecommerce grew, there was a need to find a cheaper and easier method to start their businesses. This led to the companies manufacturing ecommerce storefronts to come up and rent their existing commercial spaces. There are many advantages of these businesses and the biggest advantage is that they don’t require the overhead costs of warehousing and shipping.

The concept of ecommerce websites is relatively new and even the best established companies had not yet adopted it. These sites sell products online and earn income by selling their services online. The website, which sells the digital products gets the money from its customers who place orders for these digital products through the site. Once the product is available in the customer’s hands, the website makes the order and ensures that the product reaches the customer on time. In this way, an ecommerce website makes money without any physical products.

There are different ecommerce business models available and the way the website sells its products online varies from one website to another. There are three common types of ecommerce that are thriving these days and these are: shopping cart software, affiliate programs and retailing. Among these, shopping cart software is the most popular among the three. The reason behind its popularity is that it provides a safe and secure method for buying products online and also ensures lesser losses to the business.