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eCommerce Business Models: Types, Selection, Revenue, Examples

eCommerce Business Models: Types, Selection, Revenue, Examples

While it all starts with your idea/product, the business model you choose serves as the bedrock of your eCommerce venture, dictating the operational dynamics, the value proposition to your customers, and the revenue streams that will fuel your growth.

The eCommerce space is animated with various business models, each with its unique set of advantages, challenges, and requisites, making it hard to identify which is the best fit for your use case.

What follows is a mish-mash of research, dry definitions, suggestions gathered from our clients, and our in-house and world-famous brand examples in an article to help you make that decision a little easier.

Types of eCommerce Business Models

There are at least five major eCommerce business models with all the shades in between. Let’s have a look.

Business-to-Consumer (B2C)

A business-to-consumer business markets products and services directly to consumers.

Every time you purchase anything from a store, eat lunch at a restaurant, attend a movie at the theater, or get a haircut, you engage in a B2C transaction. These businesses offer goods and services to you, the customer directly. This is also known as the direct-to-consumer (D2C) approach.

Businesses that want to use the B2C eCommerce model must have a flexible eCommerce platform to quickly adjust to changing customer demands. Service delays and other issues can be avoided in this way.

Revenue vise, companies in B2C are into Direct Selling, which is the most common model in which people buy goods from online retailers. Think of Target or Gap, Nike and Macy's, and even Porche. You pay for the product directly.

Or operate as Online Intermediaries, i.e., connect sellers and customers, taking for themselves a percentage of every purchase. Websites like Etsy, eBay, and fall into this category.

Or offer a Subscription to their service, i.e., require a paid subscription in exchange for unrestricted access to their content. These are usually entertainment services such as Netflix and HBO Max.

Business-to-Business (B2B)

The business-to-business model means a company sells its products or services to other companies. A B2B transaction typically has a longer sales cycle but higher order values and more recurring purchases.

B2B eCommerce can be divided into two categories: vertical and horizontal.

Vertical B2B companies are selling goods and services specifically within one industry. The perfect example is the car manufacturing industry: a specific company makes steel and only sells it to car manufacturers, another provides the tires, and another one provides the engines.

Horizontal B2B businesses serve a wide range of buyers across various industries and do not specialize in any particular product or service.

Direct purchase and Subscription model and the most popular revenue approaches in B2B.

Business-to-Business-to-Consumer (B2B2C)

B2B2C is a business model where a company sells its product or service in partnership with another organization to an end customer. An example of a B2B2C arrangement is when a wholesale distributor sells merchandise to retail stores that then sell the merchandise to end users.

The main advantages of this business model are that it provides new economic opportunities otherwise not reachable, improves convenience, combines industries, and increases access to customers.

Business-to-Government (B2G)

When a company sells its products and services directly to a government agency, it falls under the business-to-government model. Due to government agencies' supervision and intervention, the B2G eCommerce model is more complex and demands strict compliance with business laws and conditions.

With eCommerce, B2G businesses are mostly in the fields of electronics, telecommunications, and infrastructure.

Consumer-to-Consumer (C2C)

In C2C eCommerce, consumers sell goods or services directly to other consumers. This is most often made possible by third-party websites or marketplaces that facilitate transactions on behalf of the buyers and sellers.

Best-known examples of C2C include eBay and Amazon, which act as both a B2C and a C2C marketplace. Since its launch in 1995, eBay has been one of the leading marketplaces for consumers to sell and buy from each other.

The benefits of this model include increased profitability, increased customer base, and convenience for both parties, while the disadvantages are platform fees, potential fraud, and low or no quality control.

Direct-to-Consumer (DTC)

The Direct-to-Consumer (DTC) business model has emerged as a game-changer in the retail industry. By bypassing traditional intermediaries and selling products directly to consumers, businesses can gain greater control over their brand, customer experience, and revenue streams.

Even well-known brands are opting out of DTC marketing strategies.

Revenue Models

Now that you know who you’re selling to and how (i.e., which business model fits your need the most), it’s time to identify your revenue model or how you’ll make your profits.

Direct Sales

Direct sales basically mean selling your product/service directly to consumers, managing payment, and completing the order fulfillment pipeline.


If you’ve ever googled anything eCommerce, you’ve probably seen a dropshipping course ad or two. It has become trendy in recent years due to its simplicity: you don’t have to manage inventory, you don’t have to have a warehouse or deal with packaging -- but you have to have an outstanding supplier.

You only have to set up a storefront, list your products, and charge your customers for them. Once an order is in, your supplier takes care of the rest.

Just keep in mind that if they’re particularly slow, you’ll open yourself up to bad reviews (remember reviews / online reputation management are crucial for your local SEO efforts and add up to your brand image) and/or product quality complaints if it is unsatisfactory. Additionally, the profit margins will typically be pretty thin with dropshipping.


Subscription businesses are businesses with the most stable revenue streams. It’s where a business provides ongoing services on a recurring basis in exchange for recurring payments from customers.

Depending on the type of product or service you’re selling, you’ll be able to opt for a replenishment subscription service (usually commodity products like groceries or cosmetics), curation subscription service (collections of products personalized to the customers), or access subscription service (exclusive access for paying customers).

Subscription offers excellent potential, but success with it does not come overnight. The topic itself is gargantuan, and I invite you to check our Ultimate Guide to Subscription eCommerce for an in-depth view of everything subscription.

Is the Subscription Model for Your Business?

White Labels

In white labeling, you’d find a product that another company makes and offers white labels.

You then pay that company for the white label, design your product and label, and then sell that product as your own.

You’ll frequently encounter this model in the beauty industry or with online blogging platforms like Tumblr or Wordpress that let you set your custom URL if you pay for the white label.

Private Labels

This model is fairly clear. If you don’t have your own production line, you can contact a manufacturer and pay them to create the product for you. They can then either ship that product directly to the customer, to a third-party retailer like Amazon, or to you so that you can sell it.

This can work really well as long as you identify a reliable manufacturer.


Typically, a wholesaler sells products in bulk at a discounted price to other businesses. However, those who opt to sell bulk products at a discount to businesses, and separate pieces at the right price to consumers, can significantly increase their profit margin (and their workload).

Selecting the Right eCommerce Business Model

Your choice of business model reflects your market understanding, customer-centricity, and long-term vision. There is no way around it, TBH. So the better you can nail product-market fit, in theory at least, the more likely you’ll adopt a model that fits your use case.

Still, a couple of best practices and contemplative questions can guide you in understanding solutions, i.e., helping you make a better decision.

Conduct a thorough market analysis to understand the demand, competition, and customer preferences. It will help you recognize the pain points of your target audience and aim to provide value-driven solutions through your eCommerce platform.

  • Questions to consider: What unmet needs of the market can your ecommerce platform address? How well do you understand your target customer’s preferences and behaviors?

Develop a compelling value proposition that underscores what sets you apart from the competition beforehand. Your value proposition should resonate with your target audience and reflect in every aspect of your ecommerce platform.

  • Questions to consider: What unique value does your ecommerce platform offer to its users? How does your value proposition compare to your competitors?

Embrace technology that augments the user experience, streamlines operations, and provides data-driven insights. This includes considering the adoption of headless commerce for greater flexibility and personalized user experiences.

  • Questions to consider: What technological infrastructures and platforms align with your ecommerce business model? How adaptable is your technology stack to the evolving market demands?

Establish a clear monetization strategy. Whether it’s a subscription model, a one-time purchase, or a freemium model, ensure that your pricing is competitive yet profitable.

  • Questions to consider: What pricing strategy will optimize your revenue while remaining attractive to your customers? How does your monetization strategy align with your market position?

Build strategies for customer engagement and retention. A satisfied and returning customer is a valuable asset. Engage customers through personalized experiences, quality service, and value-added features.

  • Questions to consider: How will you measure and enhance customer satisfaction? What strategies do you have in place to encourage repeat business?

Ensure your business operations are agile and scalable to adapt to market changes. Building a business model that can scale with growth is imperative for long-term success.

  • Questions to consider: How is your ecommerce business model poised to handle growth and market fluctuations? What processes have you established to remain agile in responding to market dynamics?

Pondering over these questions while adhering to the outlined best practices will not only help you choose the best business model but engender a comprehensive business plan.

The Wrap

Most likely, your business is one of the possible combinations of these, and its combination may impose certain technological and promotional restrictions (or rather, audience expectations).

This does not mean that you should conform to these restrictions. Not at all! The best brands in the world defy convention and are successful because of it.

BOOK a personalized 1-on-1 demo today, and we’ll show you what makes Crystallize a powerful product story engine well suited for your business.

Or, why not SIGN UP for FREE and start building the website yourself?

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