Know the competition
Any business that reduces the needs of our customers which we satisfy.
Choosing the right eCommerce business model depends on your product, target audience, resources, and goals. Many businesses combine multiple models to maximize revenue streams and customer reach.
There are several eCommerce business models, each suited to different types of businesses, industries, and customer bases. Here’s an overview of the primary eCommerce business models:
1. Benefits of a B2C Ecommerce Businesses
From a generic webshop’s point of view:
Business Model in B2C | Examples | Is it a major competitor? | Unique selling points |
|---|---|---|---|
Direct-to-Consumer (DTC): Traditional webshop | Glossier, Warby Parker, Dollar Shave Club | Yes | Any can be chosen |
Retail | Walmart, Target, IKEA | YES | Cheap, Quality, Availability, Decent UX |
Subscription-Based | Netflix, Birchbox, Blue Apron | Maybe | Quality |
Dropshipping | Shopify stores, AliExpress | Yes | Cheap |
Online Marketplaces | Amazon, eBay, Etsy | YES | Cheap or Impulsive |
Aggregators | Uber Eats, Booking.com | Maybe | Cheap, Quality (easy to compare) |
Digital Products | Audible, Udemy, Canva | Maybe | Quality |
Freemium Model | Spotify, Canva Pro | Unlikely | Quality |
Social Commerce | Instagram Shops, Facebook Marketplace | Yes | Cheap or Impulsive |
Flash Sales and Deals | Groupon, Zulily | Unlikely | Price, Biases |
Multi-Brand Retailers | Zappos (shoes), ASOS (fashion) | Likely | Quality, Exclusivity |
Bricks-and-Clicks (Hybrid) | Best Buy, Macy’s | Likely | Any can be chosen: |
Affiliate Marketing Model | Blogs, YouTube channels | Maybe | Impulsive, Informative |
Crowdsourcing or Crowdfunding | Kickstarter, Indiegogo | Unlikely | Innovative |
Rental Services | Rent the Runway (fashion rentals), Turo (car rentals) | Maybe | Cheap |
Online-to-Offline | Like DoorDash encouraging in-restaurant dining | Unlikely | Quality, Experience |
Know your Limits
What are the potential limiting factors of a B2C ecommerce business? The potential limiting selling factors of a digital B2C (business-to-consumer) business can significantly impact its growth and success. These factors include:
Limit | Description |
|---|---|
High Competition | No profitably marketable advantages |
Customer Trust and Credibility | New business, no or bad reviews, no brand, no transparency |
Dependence on Digital Infrastructure | Server, Website issues, lack of internet for customers |
Marketing and Customer Acquisition Costs | No marketing efficiency advantages |
Limited Customer Engagement | Poor UI/UX |
Pricing Challenges | Quality not compensating for higher price |
Logistical and Fulfillment Issues | Shipping delays, inventory shortages, or high delivery costs + customs + taxes |
Regulatory and Compliance Requirements | (e.g., GDPR, CCPA) |
Customer Data Management Risks | Inadequate cybersecurity, Mismanagement of customer data |
Rapidly Changing Technology and Trends | Obsolescence |
Cultural and Language Barriers | Lack of localization can alienate customers +Miscommunication or misunderstandings |
Economic and Market Conditions | Economic downturns or changes in consumer spending habits, market saturation |
Limited Scalability | Difficulty in scaling infrastructure or operations + High dependence on a single revenue stream or target audience. |
Lack of Differentiation |
No Unique Selling Point
|
Customer Support Challenges | Inadequate or unresponsive customer service |
Know your Strengths
3. Unique selling points of Products or Services
The main selling points of a product are the key features and benefits that make it attractive to potential customers and differentiate it from competitors. Each product may emphasize different points depending on its target audience, industry, and use case.
What are the qualities of a product that can be unique selling points (differentiates)?
Unique selling points | Description |
|---|---|
Unique Value Proposition | Product stands out, satisfies needs better than others |
Quality and Performance | Superior, Reliable, Cost-effective |
Cost-effectiveness | Competitive pricing or long-term savings. High value for money. |
Ease of Use | Intuitive design or functionality. Simple installation, operation, or maintenance. |
Innovative Features | Cutting-edge technology or unique attributes. First-of-its-kind offerings. |
Customer Benefits | Time-saving, convenience, or comfort. Health, safety, or environmental advantages. |
Social Proof | Positive customer reviews or testimonials. Endorsements by experts or influencers. |
Aesthetic Appeal | Stylish or visually pleasing design. Adaptability to different tastes or settings. |
Brand Reputation | Trustworthiness and credibility of the brand. Proven track record or heritage. |
Customization and Personalization | Ability to tailor the product to individual preferences. Versatility for different uses. |
Availability and Accessibility | Easy to find, purchase, or acquire. Local support or service. |
Warranty and After-sales Support | Comprehensive warranties or guarantees. Exceptional customer service. |
Sales Channel presence
Single Channel
Multichannel
Omnichannel
Branding
Branding strategies are techniques and approaches used by businesses to establish a distinctive identity, foster customer loyalty, and stand out in the market. Below are the key branding strategies:
Branding Style | Description |
|---|---|
Corporate Branding | Corporation as a whole – Emphasizes core values, mission, and vision to build trust and recognition (apple) |
Product Branding | Unique identity for a product or product line. logo, packaging, and messaging (coca cola) |
Personal Branding | An individual, typically influencers, entrepreneurs, or public figures. Leverages authenticity and personal connections to engage audiences (e.g., Oprah Winfrey, Elon Musk). |
Service Branding | Highlights superior customer service and experience as a key differentiator. Aims to build emotional connections and loyalty (e.g., Ritz-Carlton’s “Ladies and Gentlemen serving Ladies and Gentlemen”). |
Digital Branding | Uses online platforms such as social media, websites, and email to build a cohesive digital presence.Focuses on SEO, content marketing, and social media strategies (e.g., Glossier’s Instagram-driven strategy). |
Co-Branding | Involves partnerships between two brands to leverage each other’s strengths and audiences. Examples include Nike and Apple’s collaboration on fitness products or BMW and Louis Vuitton. |
Ingredient Branding | Promotes a component or feature of a product as a key selling point. Examples include “Intel Inside” for computers or Gore-Tex fabric in outdoor apparel. |
Employer Branding | Focuses on the company’s reputation as a great place to work. Used to attract and retain top talent (e.g., Google’s culture of innovation). |
Geographic Branding | Ties the brand identity to a location, emphasizing regional authenticity or heritage. Examples include Champagne from France or Swiss-made watches. |
Cause Branding | Aligns the brand with a social or environmental cause to appeal to ethically conscious consumers. Examples include Patagonia’s focus on sustainability or TOMS’ “One for One” campaign. |
Luxury Branding | Emphasizes exclusivity, superior quality, and prestige. Uses minimalistic design, high-end packaging, and controlled distribution (e.g., Rolex, Gucci). |
Emotional Branding | Builds strong emotional connections with the audience, often focusing on storytelling. Examples include Dove’s “Real Beauty” campaign or Coca-Cola’s “Share a Coke.” |
Value Branding | Appeals to cost-conscious consumers by emphasizing affordability and good value. Examples include Walmart’s “Save Money. Live Better” or IKEA’s affordable furniture offerings. |
Cultural Branding | Builds on cultural narratives or identities, aligning with a group’s shared values or traditions. Examples include Nike’s focus on empowerment through sports or Ben & Jerry’s activism. |
Brand Extension | Leverages an established brand to introduce new products or services in different categories. Examples include Dyson moving from vacuums to hair care tools or Apple’s transition from computers to phones and wearables. |
Experiential Branding | Focuses on creating memorable and engaging experiences for customers. Examples include Starbucks’ in-store ambiance or Disneyland’s immersive theme parks. |
Niche Branding | Targets a specific, well-defined audience or market segment. Examples include specialized fitness apparel brands like Gymshark. |
Sustainable Branding | Highlights the brand’s commitment to environmental sustainability and ethical practices. Examples include Tesla’s focus on renewable energy or The Body Shop’s cruelty-free products. |
Global Branding | Focuses on creating a consistent brand image across international markets. Examples include McDonald’s standardized yet locally adapted branding. |
Private Label Branding | Retailers create their own branded products, often offering them at lower prices than national brands. E.g. AmazonBasics. By selecting and combining the right strategies, businesses can effectively connect with their target audience, differentiate themselves, and build lasting brand equity. |
The Most Applicable Online Branding Elements
- Experiential branding – memorable experience
- Gamification
- Superior customer service
- Geographic – Local
- Value – being cheap
- Cultural
- Niche Audience branding
- Brand extension