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How To Choose Your Ecommerce Business Model

How To Choose Your Ecommerce Business Model In 2022

Now that we have looked at all the types of business models in the last lesson, we went over an overview of everything; pros and cons of both. Let’s look into How to choose Ecommerce Business Model.

In my opinion and experience in dealing with them, the obvious next question is which business model is right for you?

Again, this post will be targeted more toward people on the newer end of the eCommerce spectrum because there are many different options out there already.

Ecommerce is a really broad field, and you should make a decision based on understanding your option, understanding what’s going to be the best for you, not just looking at what somebody else is doing or some webinars you just saw or some screen chat, right?

Because so much of that stuff can just be pure hype, you need to decide what will be the best for you. Otherwise, is it going to be much more difficult for you to find your success?

So, a few things to consider right away: the biggest thing that will be affecting anybody reading this is STARTUP CASH; this is the first point we are going to start with as per Choosing your Ecommerce Business Model.

StartUp Cash

Some businesses require more startup cash than others do.

Choosing Your ecommerce Business Model

We will spend a little bit of time on this side; I want to note that it is incredible with an online business, no matter which business you choose, even if you go to the private label or subscription route.

You will be able to get started for probably a fraction of the cost it would cost to normally set up some type of retail store or brick-and-mortar location.

Because there is no overheard of the actual brick and mortar location and there is no overhead of the employees and anybody who is reading this that owns mortar and brick store Some type of retail startup you probably know exactly what I am talking about.

There is a huge investment; I want you to keep that perspective as you think about this.

Are you in this for the long term? Or are you just here because you thought this was some quick cash grab? I am not on here about teaching the cash grab to make online money; sure, we are here to make money online, right?

That’s what eCommerce is. We are selling things and collecting money from people paying us, and we can make amazing money from that, but it doesn’t mean that It’s not difficult and doesn’t mean it’s not a long-term process that you need to consider.

When you are looking at startup cash, you need to be thinking not in terms of like how cheap it can be to get started; you need to be considering what I willing to invest right now to build the best business possible because you should not have been looking at this like OH am!

Choosing Your ecommerce Business Model

How cheap can I try to get started to make a couple of a thousand bucks? That is the wrong mindset; you know you should go and find another business post.

Because this post is designed to teach people true business practices of what I have learned, studied, and experienced, one of the things is that it will require startup cash.

Having invested tens of thousands of dollars in my education over the years into my businesses to be able to get to the point some of that money was burnt & lost, some of it produced high returns.

There are no right or wrong answers to these questions, and now you might think, well, which business costs more?

Which cost less? How much is it going to cost for me to get started? In addition, that is fair.

The number one thing you must consider when it comes to startup cash is whether you are going alone, with a mentor, or with some type of coach.

I got started without any type of coach, but I believe coaches can greatly help, but it will require a lot more startup cash.

If you are getting any coach because you will be paying that coach and program for the time and investment, which is usually at least a few thousand dollars, right?

In terms of just money that you need to get started, there are a few things you have to start thinking about: your marketing, your budget, your ability to pay for actual orders, and your cost of goods sold.

I will recommend that no matter what you want,  a comfortable number would be two thousand dollars ($2000) at least to get started, and even the lowest barrier to entry business model like dropshipping & entrepreneurial demand.

As an entrepreneurial demand, you have even a little bit more of an investment because you have to invest into your own design, which will probably be a few hundred dollars to get started if you have to get some design made.

Strength And Weakness

You want to know your strength, right? If you do not understand print on demand & design, that is probably a more difficult path. As part of Choosing Your Business Model, strengths and weakness are topics we must address.

If you do not understand branding, you will not start building your private label right.

Generally, dropshipping is where people start because it is a good way to test and it is a good way to get started.

Business Experience

The same thing; if you do not have any business experience and want to start with a low-risk model, you can learn as you go.

Throughout this post, I will give you as much experience and wisdom as I can. Still, again you want to think that you will not be jumping into a subscription model if you have no business experience.

You are probably going to end up burning a lot of money if you do that consider right; you may want to get started right away; if you have zero experience, you might want to take some time and learn something and go for case studies, read some posts like this so you can understand the model.

Existing Assets

This will apply to most people who want to get started and don’t have existing assets. Still, if you are a small business owner or already have some type of product or brand, that will guide the direction of the business model you choose.

Maybe a subscription model, selling your product, private label, or something right, so your existing assets matter. Finally, one of the most important among next to “startup cash” is your business goals. Are you learning something to help you in Choosing Your ecommerce Business Model? Well, let’s dig in more.

Business Goals

You need to be thinking about your goals and why doing them. I hope you are not thinking about how cheap it can be to make some money quickly because these people are rarely the ones to ever make the money.

I am not saying it is impossible; it is very difficult if you come from that mindset. We are going to talk about mindset in the next post.

ecommerce business model

You want to think about your goals; you here doing long-term business; what type of business do you want to build? Are you here to build an imperial business? Are you here to build your private label brand?

  • Are you here to find one unique cool product that can change the world?
  • What is your business goal?
  • Are you going to use that to stir your direction?

Now getting into my suggestion,

I suggest you start with more dropshipping & entrepreneurial demand if you are brand new ok? Then your business can evolve, private label or subscription, or you know, it doesn’t necessarily need to evolve into a different business model. It simply scales on the better operation, right?

A drop shipping business can be a multi-million dollar-a-year business model. Still, at that level, you are going to have better operations, you going to have a better supply chain, better logistics, you probably going to be working with a high company, partners and come to the fulfillment side and operational side.

It does not necessarily mean you will evolve into a different business, but you will want to evolve eventually.

Dropshipping, Entrepreneurial demand is something that can also evolve. I told you about the company “gear bunch,” which I know they are doing millions of dollars a year in sales.

There is a company I cannot disclose; they evolve from a basic startup Entrepreneurial demand doing millions of dollars in sales, so obviously, their operation has had to evolve.

But either way, if you are brand new, I suggest you start with one or the other; now, it’s important to know that there are many haters in the drop shipping business.

Mostly these are experts on there, those that have been in ecommerce a long time before drop shipping started, and the people running high-level performance advertising.

Drop shipping is just a business model ok; all it means is that you are getting your product fulfillment from a third-party supplier; it does not have to be a bad business model, there are ways to make it a good business model, and we are going to talk about that.

We are going to talk about;

How to do quality dropshipping?

How do you turn this into something that is not associated with all that bad stuff you might hear out there about dropshipping? I am going to talk about a way you can, what I call hyper business models that combine drop shipping & entrepreneurial demands, but again, this is where we stopped,

If you are completely new and have no design skills, entrepreneurial demand might be a bit tougher, but it does not mean it is out of your reach.

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Again, I have some training in the future that will open your eyes & world to entrepreneurial demand and how successful this is to start your business.

Suppose you have a product idea or you already have some type of store or some small business. In that case, I suggest you focus on expanding your existing operations into an ecommerce channel.

I get these questions a lot from people with business background experience;

Should I sell my products? Alternatively, should I start a drop shipping in different products, and the truth is you can go either way?

I know people who handle the different products and just take a drop shipping course and learn how to start drop-shipping and go to something new, so that’s an option.

Nevertheless, personally, if you have a product you built or have some type of brand you are dedicated to and have spent a lot of time building and setting up.

It makes sense to me to expand in that, first into an ecommerce channel and from there focus on another thing,

However, I always think about maximizing what I have before moving to something else. When fulfilling your products, starting local, national, and global is usually best.

It is important to understand that no matter what model you choose, you should not be random. What I mean by this is you want to understand what market or people you want to sell to, not just randomly.

I am going to start dropshipping cat products because you saw somebody else drop shipping cat products; you need to do market research, put in the time to understand who your audience is and what products you want to sell, and we are going to talk about that in the future.

In my personal opinion, I think drop shipping is great because you can search for product ideas on sites like Amazon & Ali-Express, and again, you can find ideas that solve the problem or offer some type of unique solutions to improve someone’s life. I am not talking about sourcing at this point.

I think outsourcing from Ali-Express is a thing of the past because it’s too uncontrollable with quality & shipping at times. Still, there are amazing millions of product ideas on Ali-Express, and new ones are always added.

There is rarely anybody in the world, in my opinion, better than china and exactly taking ideas from zero to be able to ship in an incredible amount of time.

In addition, of course, Amazon too is the world’s largest marketplace where you can find so many unique items and so many been added all the time.

What do I want to do? It is easy to go on Amazon and look at the drop-down menu; these are all categories.

ecommerce business mdel

Now you are not going to sell in that rogue level or the categories, but it gives you a starting point of matching your strength or what business models I think to make sense to get started and trying to blend that with okay, what are my interests in?  Do I want to sell gardens and outdoor products?

Now again, think about your startup cash; it’s going to be a lot more difficult to start an office and furniture business with like zero capital than it would be to start a scrap-looking & stamping business because the product price is higher, you know, you like.

People pay me beforehand. Yea, that is the truth, but you want to have some rooms; what if that is a refund or a return or I get multiple orders?

Nobody can answer this for you that’s the thing all I can do is show you the pros and cons, give you my opinion about the experience and how each type of business model works, and kind of put you in the direction on how you should be thinking about this, at end of the day you make a decision, at the day you are the entrepreneur, the C.E.O of your business, you are the one that is going to have to make a choice and stick with it and make that decision in Choosing your ecommerce business model.

One thing that I will tell you is do not hang up on this too much. I know from my own experience and talking with others that sometimes people are stuck here, and they just get stuck for hours thinking about it and overthinking.

You should make a list if you are brand new, make a list and start going through some ideas and start looking at a few different options of what you are most interested in and take these ideas.

When we get to the market research phase, you will see ways to analyze the ideas and identify which one you think will be the best profitable business.

The quicker you start testing things, the quicker you will get to the right solutions.

It will not be perfect when you start; no matter what, there will be an adjustment. You will edit things; you have to fix things or change inventory.

Do not get intimidated by the idea of failing; the people that often get the idea of failing are less successful simply because they were unable to overcome that paralysis, and its causes a cloud of thinking.

You will think all these categories are wide-open opportunities because, in reality, anyone in this category can be profitable. As I said, anyone in this category can build a successful business,

The X-Factor is you and the kind of business you want to build, the brand you are creating, and your marketing.

Pick a few ideas that make sense to you, which you find yourself interested in, and as we go through these series, you can narrow in on what you feel like.

It’s the best one, so don’t get to hang up on this; it’s important, but if you are brand new like you just have to get started on a very long journey, and you want to realize anyone of this, still with me on this Choosing your ecommerce business model? Great.

Understand that there are different kinds of suppliers out there

  • You can use U.S wholesale suppliers.
  • You can use direct supply chains from Chinese fulfillment companies.

Print On Demand

Print on demand is amazing because you can design items specifically for a target market of people like (veterans) and then create a brand around that item.

It is harder to be copied & easier to differentiate yourself. The drawback is margins are smaller, and shipping is more expensive. However, still, with print on demand, there are lots of advantages to it, and if you know how to set up your store & sell, be able to create higher order value so that people will be spending more money on your store the margins will become less of a problem.

If you are brand new to print on demand, there are different types of stuff, and you can use the printful print-on-demand app.

Read Also:

The Hybrid Model

This is basically what I believe for any new person to start; it’s called hybrid because it’s a blend between these different side, so on the other side of choosing your niche, we are going to talk about this more in-depth on the other side of choosing your niche.

There is general, and there is a niche we talk about more. However, here is what I want you to focus on now. Print on demand vs Drop shipping you can do both in the same store.

ecommerce business model

I believe they blend for most niches because, with print-on-demand, you get branding, customized items, personalized items, and good product offerings that can help build your business.

With drop shipping, you can still find viable products with higher margins. They are great for front-end products; they will bring people to your store and so print-on-demand compliments that very well. This is the business model that I got started with all those years ago.

I was dropshipping products, and I was selling things in certain niches. I realized, HEY! I can design T-shirts in this niche too.

I like t hybrid model; it is a way to get started; you can put dropshipping products and print on demand.

Do you have any questions about Choosing your business model? Comment below.Thanks for reading.

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I was looking for ways of making a living working online from the comfort of my home,few years in am able not only to work from home but also help others achieve their dreams too. I am a full-time eCommerce expert dropshipping business ,Niche research and Facebook ads Expert.

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