Before you launch an ecommerce business, a thorough understanding of ecommerce types is only half of the knowledge you will require. After you decide what type of trading you will be engaging in, you will need to be familiar with the various avenues that are available for ecommerce.
The majority of us have purchased a tangible item such as electronics or clothes online. However, there are many more options for ecommerce traders that are not as obvious to the average casual buyer.
Retail
The most obvious and popular type of ecommerce is the sale of goods to consumers. Most people have participated in ecommerce on the retail side of ecommerce trading. ASOS, for instance, was ahead of the curve. They were the first to exclusively launch their clothing brands on retail ecommerce platforms. With 14.2 million active customers as of 2019, the brand still dominates the market. It is not surprising that numerous brick and mortar stores migrated online, following ASOS’s lead.
Ecommerce retail offers overhead costs that are considerably lower than brick and mortar retail stores. In addition, ecommerce now accounts for 2l.8% of global retail sales. Therefore, many brands have opted for ecommerce instead of physical stores, or in addition to them. Many companies that have launched ecommerce branches have begun to favor on-line retail due to the high overhead of brick-and-mortar sales.
Digital Ecommerce Products
The downloading and sales of documents, media, software, and other intangible products is exclusively possible through ecommerce.
Online courses such as Future Learn, Adobe Suite and other creative design software, and numerous educational products are excellent examples of the benefits of ecommerce. It is a growing market due to a large increase in the number of digital products that are available, ranging from movies, music, books, new software programs, as well as app developments. In addition, digital sales are a very cost-effective type of ecommerce since these items do not require stock inventories, warehouses, or high rent expenses. Therefore, it is an even lower cost form of ecommerce compared to retail.
Services
Skilled workers have the ability to sell marketing, writing, and coaching services, similar to the sale of digital products. These services can be paid for on-line but they may be provided in person. As a result, agencies, freelancers, and other self-employed professionals enjoy much broader audiences for their work than would be possible without the availability of ecommerce services sites.
Wholesale
Usually, wholesale products are bought for lower prices in bulk, than single pieces. Wholesale ecommerce connects retailers and wholesalers who sell large quantities of their products B2B for the retailers to later individually sell to consumers (B2C).
Since the B2C retailer is able to buy large quantities of products for relatively low prices and sell them for a profit, this is an effective form of retail. The B2B wholesalers are able to keep costs low by guaranteeing bulk sales, while avoiding the cost and necessary expertise to market the products to a broader consumer base.
Drop-shipping
Drop-shipping is similar to wholesale, but slightly different. Instead of buying products in bulk, a retailer markets a product, but only orders it from the supplier after a consumer has placed an order. This lowers costs for retailers since they do not need space to hold wholesale stock in bulk. They also don’t need to worry about moving all the stock that they have purchased wholesale.
On the other hand, the retailer will not benefit from discounts on wholesale stock and is not able to offer quick shipments because they do not have the order available in inventory. Amazon is the most successful company utilizing this ecommerce type.
Subscriptions
Apps, TV streaming, and other recurring purchases are paid regularly instead of through one-off payments. The subscription method for ecommerce gives the consumer the ability to cancel when they no longer want or need the service.
