8 E-com Business Models Explained (inc. pros vs cons of each model and how they work)
Looking to get into E-Com?
Bookmark this Thread. It will save you time and money.
//Thread//
Looking to get into E-Com?
Bookmark this Thread. It will save you time and money.
//Thread//
There are many ways to get into e-com.
There is no "one" best model.
The model you pursue comes down to one thing....
Risk v Reward
Some models are easy to start but hard to make a profit....
Some models are extremely profitable but have a steep learning curve...
👇👇
There is no "one" best model.
The model you pursue comes down to one thing....
Risk v Reward
Some models are easy to start but hard to make a profit....
Some models are extremely profitable but have a steep learning curve...
👇👇
This thread outlines the pros and cons of each e-com biz model so you can make the right decision for your unique circumstance.
Each models is rated from 1-4 based on 4 key criteria
1) Ease of launch
2) Profit velocity
3) Sustainability and risk
4) Level of competition
👇👇
Each models is rated from 1-4 based on 4 key criteria
1) Ease of launch
2) Profit velocity
3) Sustainability and risk
4) Level of competition
👇👇
# 1 Dropshipping with your own website
How
1- Contact wholesalers to get approved as retailer
2- Build website and list products
3- Drive traffic to website
4- Send orders to wholesalers for fulfilment
Pros
✔No inventory
✔No fulfillment
✔Low startup costs
✔Easy to start
How
1- Contact wholesalers to get approved as retailer
2- Build website and list products
3- Drive traffic to website
4- Send orders to wholesalers for fulfilment
Pros
✔No inventory
✔No fulfillment
✔Low startup costs
✔Easy to start
Cons
❌Less pricing flexibility
❌Paid ads are hard due to low profit margins
❌Inventory and customer support is difficult as you're depending on a 3rd party to fulfill
❌Vendors can be unreliable
❌ Business reputation is heavily dependent on vendors
❌Less pricing flexibility
❌Paid ads are hard due to low profit margins
❌Inventory and customer support is difficult as you're depending on a 3rd party to fulfill
❌Vendors can be unreliable
❌ Business reputation is heavily dependent on vendors
📝Rating (1-10)
Ease of launch - 8
Profit velocity - 3
Sustainability and risk - 6
Level of competition - 3
Ease of launch - 8
Profit velocity - 3
Sustainability and risk - 6
Level of competition - 3
# 2 Ebay/Amazon Arbitrage
How
1- Find Amazon products selling higher on Ebay
2- Copy&Paste images+product description onto Ebay
3- Post on Ebay at higher price
4- When auction closes on Ebay buy product on Amazon and ship to buyer
Pros
✔$0 overhead
✔No website
How
1- Find Amazon products selling higher on Ebay
2- Copy&Paste images+product description onto Ebay
3- Post on Ebay at higher price
4- When auction closes on Ebay buy product on Amazon and ship to buyer
Pros
✔$0 overhead
✔No website
✔no need to find vendors
Cons
❌Brand owners will hate you
❌Always hunting for arbitrage opportunities
❌High risk of getting banned
📝Rating (1-10)
Ease of launch - 10
Profit velocity - 2
Sustainability and risk - 1
Level of competition - 2
Cons
❌Brand owners will hate you
❌Always hunting for arbitrage opportunities
❌High risk of getting banned
📝Rating (1-10)
Ease of launch - 10
Profit velocity - 2
Sustainability and risk - 1
Level of competition - 2
#3 Retail Arbitrage
How
1- Buy low cost merch at clearance/liquidation outlets
2- Sell at higher price on Amazon FBA
Pros
✔No website
✔Leverage size of Amazon marketplace for fast sales
✔Minimal startup costs except cost of inventory
Cons
❌100% at mercy of Amazon
How
1- Buy low cost merch at clearance/liquidation outlets
2- Sell at higher price on Amazon FBA
Pros
✔No website
✔Leverage size of Amazon marketplace for fast sales
✔Minimal startup costs except cost of inventory
Cons
❌100% at mercy of Amazon
❌Need to invest time product hunting
❌Hard to scale
❌New Amazon rules discourage this model
📝Rating (1-10)
Ease of launch - 8
Profit velocity - 5
Sustainability and risk - 2
Level of competition - 5
❌Hard to scale
❌New Amazon rules discourage this model
📝Rating (1-10)
Ease of launch - 8
Profit velocity - 5
Sustainability and risk - 2
Level of competition - 5
#4 Dropshipping on Amazon
How
1- Find distributors willing to dropship for you
2- List item on Amazon as merchant fulfilled
3- Contact distributor to ship product for each sale
Pros
✔$0 start up costs
✔No website
✔100s of products to list straight away
How
1- Find distributors willing to dropship for you
2- List item on Amazon as merchant fulfilled
3- Contact distributor to ship product for each sale
Pros
✔$0 start up costs
✔No website
✔100s of products to list straight away
Cons
❌Anyone can contact same distributor and copy you
❌Amazon has strict requirements
❌High risk of getting banned (A guy lost 7 figure biz overnight like this)
📝Rating (1-10)
Ease of launch - 8
Profit velocity - 7
Sustainability and risk - 1
Level of competition - 3
❌Anyone can contact same distributor and copy you
❌Amazon has strict requirements
❌High risk of getting banned (A guy lost 7 figure biz overnight like this)
📝Rating (1-10)
Ease of launch - 8
Profit velocity - 7
Sustainability and risk - 1
Level of competition - 3
#5 Sell private label on Amazon
Private labeling: Place your own brand on a product you manufacture
How
1-Find manufacturer that white labels
2-Produce products in bulk
3-List on Amazon FBA
Pros
✔No website
✔No need to drive traffic
✔No inventory issues
✔High margins
Private labeling: Place your own brand on a product you manufacture
How
1-Find manufacturer that white labels
2-Produce products in bulk
3-List on Amazon FBA
Pros
✔No website
✔No need to drive traffic
✔No inventory issues
✔High margins
Cons
❌High upfront cost (have to make products in bulk)
❌Not ideal for beginners
❌Dependent on Amazon FBA
❌Attracts copycats
📝Rating (1-10)
Ease of launch - 6
Profit velocity - 10
Sustainability and risk - 7
Level of competition - 8
❌High upfront cost (have to make products in bulk)
❌Not ideal for beginners
❌Dependent on Amazon FBA
❌Attracts copycats
📝Rating (1-10)
Ease of launch - 6
Profit velocity - 10
Sustainability and risk - 7
Level of competition - 8
#6 Selling wholesale goods on Amazon
How
1- Find distributors with large product catalogs
2- Buy products and list on Amazon FBA
Pros
✔High margins
✔Low unit quantities
✔Fast turnaround
✔100s of products at your disposal
How
1- Find distributors with large product catalogs
2- Buy products and list on Amazon FBA
Pros
✔High margins
✔Low unit quantities
✔Fast turnaround
✔100s of products at your disposal
Cons
❌Selling exact same product as other sellers
❌Eventual price erosion as you're listing the same product as others
📝Rating (1-10)
Ease of launch - 7
Profit velocity - 7
Sustainability and risk - 3
Level of competition - 3
❌Selling exact same product as other sellers
❌Eventual price erosion as you're listing the same product as others
📝Rating (1-10)
Ease of launch - 7
Profit velocity - 7
Sustainability and risk - 3
Level of competition - 3
#7 Selling wholesale on your website
How
1- Find wholesaler
2- Build website and sell
3- Manage your inventory
Pros
✔Control your own store and brand
Cons
❌Not easy
📝Rating (1-10)
Ease of launch - 5
Profit velocity - 4
Sustainability and risk - 6
Level of competition - 5
How
1- Find wholesaler
2- Build website and sell
3- Manage your inventory
Pros
✔Control your own store and brand
Cons
❌Not easy
📝Rating (1-10)
Ease of launch - 5
Profit velocity - 4
Sustainability and risk - 6
Level of competition - 5
#8 Selling private label products on your own website
How
1-Build product
2-Build website
3- Drive traffic
Cons
❌Hardest model to master
❌High upfront investment
Pros
✔Highest long term potential
✔You control everything
How
1-Build product
2-Build website
3- Drive traffic
Cons
❌Hardest model to master
❌High upfront investment
Pros
✔Highest long term potential
✔You control everything
📝Rating (1-10)
Ease of launch - 4
Profit velocity - 7
Sustainability and risk - 10
Level of competition - 9
Wrapping things up 👇👇👇
Ease of launch - 4
Profit velocity - 7
Sustainability and risk - 10
Level of competition - 9
Wrapping things up 👇👇👇
Stop falling for whatever guru says is the "best e-com model"
Each has it's own pro and cons and it all depends on your personal risk/reward tolerance.
Final tweet 👇👇
Each has it's own pro and cons and it all depends on your personal risk/reward tolerance.
Final tweet 👇👇
If you enjoyed this thread I'll leave you with 2 things...👇
1) Check out the full YouTube video where I go in depth into each business model ()
2) Share this thread by retweeting the first tweet
1) Check out the full YouTube video where I go in depth into each business model ()
2) Share this thread by retweeting the first tweet
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