Millions of more people are working from home now, many of them permanently. The number of products people purchase through the internet is vastly increasing. It’s no wonder online shopping continues to grow and become the new norm.
Worldwide eCommerce sales are expected to almost double by 2023, and due to the pandemic, growth has leapfrogged 5 years faster than expected, from 12% of total retail sales in the U.S. to over 16%. In the UK, it reached 32% of all sales, before dipping down later in the year.
Overall, we’re talking about $6.5 trillion will soon be spent online. This is fantastic news for digital marketers, including for you!
Below are six online business models that you can easily get started with today. Any of these can complement your existing online presence. Combining two or more is also possible.
You’ll of course have to decide which models best fits your product choice, target audience, resources and preferences.
Don’t worry if you’re a beginner. Setting up an online shop is simple. Like anything, it does take effort, but the results are a powerful and stable income stream for you and your family.
This is a wise choice if you want to start an eCommerce business but lack funds. It’s an order fulfillment system that doesn’t require you to keep an inventory of products to sell.
Simply put, you promote these through your online assets. When a customer orders, a third-party becomes responsible for packing and shipping.
Dropshipping can be your portal to the eCommerce world. It’s a low-risk endeavor that is perfect for beginners.
Several sites list the top Dropshipping items sold. But, before you search, and without dwelling too much on this, what would you like to sell? What problems will you solve? Is there a need you want to satisfy? These are the questions you must first answer.
An excellent place to start your business is Shopify Dropshipping. To learn more, here’s our take on Shopify.
Here are things you should consider before going into Dropshipping.
- It’s incredibly competitive. Because of the simplicity and low investment required, 33% of online businesses adopt this fulfillment model. Also, you won’t be the only seller of a product, unless you have an exclusive deal.
- Add value to your products. Large companies can undercut prices to drive away new players such as yourself. But, you can justify a higher cost by adding value to your product. Months ago, I bought a liquid screen protector for my phone from a seller who offered a year’s insurance coverage worth $100. The price difference is only $4.
- An inferior product or poor service will reflect on you. You’re at the mercy of suppliers. Delays in shipping could be a problem, and would reflect on you. Additionally, you have no control over product quality. Be diligent when choosing your supplier. Some shamelessly cut corners in manufacturing to earn more revenue.
- Customer service is still your responsibility. Customers will call you if they’re unhappy with your product. Keep in mind your suppliers are invisible partners.
All in all, dropshipping is an easy and entry-level business model if you want to adopt this business model. There are dropshipping “clubs” available as well, though you make more of a profit margin by researching and forming connections direct with suppliers.
2. Retail Arbitrage
In this ecom model, you basically buy items at a discount from physical retail shops and sell them online to earn a profit. This means keeping tabs on product overruns, clearance or warehouse sales. You usually find these at the following:
- Local retail shops
- Home Depot
- Outlet stores
There are many more big names to add to your list. Also, search for local small businesses that offer specialty items like hand-made products. There is a vast market and demand for these.
You can start your business quickly by opening an Amazon, eBay or Shopify store. You can maintain shops on all three, but this will require a lot of work (hiring a VA will definitely help with this.)
If you already have a website, why not dedicate an ecommerce shop using retail arbitrage? You have to deal with fulfillment and shipping yourself, though you can send your products to a warehouse that specializes in this.
Be careful of reselling products that are discontinued. Make sure your buyers know before they purchase. If any, inform them of newer versions, so they’ll revisit your shop.
When wholesale is mentioned, the word “bulk” often comes to mind. This used to be the exclusive domain of B2B companies. Not anymore.
Now, customers are buying in bulk to take advantage of volume discounts. Of course, not everything on the shelf can be purchased wholesale. Items with a short lifespan can’t be kept in storage indefinitely.
Do you need a warehouse to store goods? Yes and no would be my answer. If you buy and sell mass-produced items or lack any direct contact with a manufacturer, you definitely should lease space.
On the other hand, if you’re purely selling, work out a win-win arrangement with a manufacturer. They might be able to store products for you and act as a dropshipper, fulfilling items and sending them to customers.
Wholesaling will require up-front funds. The amount will depend on the product you’re selling. Taking on a business partner might be a good idea. A small business loan can also help.
Note, as well, the terms of your wholesale purchases. If you have 30, 60 or 90 days to pay, you can sell your items first and pay the cost of goods after you receive income.
4. White (Private) Label
You’ve likely seen products that look the same but are branded differently. Before we became aware of white labeling, we thought businesses copied from each other.
We didn’t know then that these companies had the same supplier of generic products such as skin creams, phone cases, lighters, towels, water bottles, garlic presses, dog collars, etc.
Manufacturers produce generic items that are then branded and sold to businesses, who sell them as their own. You likely know some of them that do exactly that:
- AmazonBasics and Pinzon (Amazon)
- Great Value (Walmart)
- Kirkland (Costco)
- Crown Bolt (Home Depot)
In fact, over 25% of all retail products sold in the U.S. are actually private label products. (Technically, private label is the retail store’s “private” brands, while white label is more accurate in our case, as it refers to a manufacturer who places a brand name on their blank product … but both terms are used interchangeably.)
Since many brand products come from the same source or similar manufactures, it’s no longer a question of which product is better. The question becomes who is the better brand, and who has the better marketing.
Your USP (Unique Selling Proposition)
So, how do you rise above the rest with a generic product?
If you’re new, I suggest your primary focus is to gain your customers’ trust with your brand. This isn’t won overnight, but earned over time. Your first step is to ensure the products you sell are of high quality.
You can also ask your source to tweak your product so it is more unique to your own brand. There will likely be a one-time “molding” fee, as the manufacturer will need to customize their production line for you. We do this with most of our own private label ecom products.
The next is to deliver your products on time and easily accept returns. This proves to the customer that your company is easy and worthwhile dealing with.
The third is thanking your customers and keeping in touch with them through e-mails, social media or phone calls. They will feel grateful that you care about them.
You and your business should always exhibit your core values when dealing with your target market. This is one way of forming bonds with your customers. People are wary of many online businesses that are only after a quick buck.
You can also turn your customers into fans, who will then champion you and refer you to their family and friends. We have an entire article on transforming your ho-hum generic business into branding superstardom.
If you’re the supplier and wholesaler for other sellers, the same principles apply. You also have the added responsibility of keeping retailers adequately stocked. Your primary focus is on production and storage.
5. Subscription Services
You’re mistaken if you thought Dollar Shave Club, Hello Fresh and BarkBox is part of a new business model. It is simply a reimagining of the Book of the Month Club, which was founded way back in 1926. A subscription service is an old concept.
This eCommerce model caters to a particular niche. Customers usually pay a monthly or annual membership fee. In return, they receive ongoing services or consumable products.
Here’s another example. As more people are working from home, food delivery has evolved and opened up new business opportunities. There’s no need to call every day for ready-to-eat meals or groceries. A subscription with any of the meal delivery companies guarantees food on the table anytime.
There are several services you can offer and these are not limited to physical products. Here are other ideas:
- Board Games
- Comic Books
- Arts and Crafts (Designs for cross-stitching, crochet, knitting, etc.)
- Beer, Wine, etc.
- Jewelry Making (Includes tools and materials)
Amazon Prime, Netflix and Microsoft 365 are also based on this subscription model. Many businesses today offer some form of subscription service to their customers. This is a no-brainer … receiving a stable, monthly income in exchange for certain benefits is a win-win for businesses and customers.
If you got ideas now, go ahead and try them. It’s not hard to believe that each household will have at least one membership in a subscription service one day.
6. Print-on-demand (POD)
Generate more wealth by unlocking new channels for your creativity. Customize designs for t-shirts, leggings, mugs, caps, pillowcases, posters, phone cases, etc.
Print-on-demand is actually a variation of Dropshipping. It’s not necessary to keep inventory. Orders can be forwarded to a third-party manufacturer, who prints and ships the items.
If you want to get started, check out these POD platforms:
- Printful. They’re a favorite and offer a wide range of products.
- Zazzle. They’re visited by least 30 million monthly.
- Redbubble. Membership is free and you get to choose your profit margin.
- Sunfrog. Their reach is worldwide.
- Printify. Easily integration with ETSY and WooCommerce.
- Threadless. A good home for artists.
- Society6. Art is their niche.
Conversely, you can produce and ship items yourself if you’re concerned about product quality and prompt delivery. You need to invest in printing equipment and stock up on the required materials.
Just to give you an idea, the best mug printers will cost you less than $200. It’s added work and expense for you, but it can pay off handsomely. You’re in full control of everything.
The best eCommerce business for you will depend on your preferred niche and resources. It’ll also boil down to what you’re passionate about. When you discover what drives you, the next steps become easier as long as you put in the time and effort.
If you’re really serious, now is the time to give eCommerce a try! When you sign up below for our newsletter, we have available full courses on ecommerce and other digital marketing models to get your home business up and running quickly!