E-commerce enterprises success like other ventures relies on the ability to select a good business model. A good model determines the profitability and the potentiality of your business to cover its expenses. Since e-commerce is a long-term investment; you need to put great care when selecting a marketplace model. Here are the top four online marketplace business models you can choose for your e-commerce business:
- Subscription or membership fee model – This is a model where you subscribe or pay a membership fee to access customers from an online marketplace. Mostly, you subscribe for a given period such as monthly and annual. The benefit of this model is that you save on marketing costs as the marketplace connects you with customers. However, it is only viable if you have enough capital to subscribe to such services and your products and services are of high value.
- Commission based model – Commission based is another online marketplace business model you can opt for in your e-commerce business. In this model, you pay a commission for every customer transaction you get from the online marketplace. The commission is either a flat fee of maybe $2 or a percentage like 5% per transaction.
As such, the model is suitable the customers cater for the costs in that there are no prior payments to the provider. However, for you to succeed you need to offer high quality for both the client and the service provider. Else, you will lose both the customer and the income if your quality is poor.
- Featured advertising model – Sometimes you see business advertisements appearing on the homepage of a marketplace site. This is called featured advertising. With enough capital, you can pay for visibility service where your e-commerce business is featured on the top or homepage of an advertising site.
However, you need to consider the traffic of the site you are looking on for featured ads as it will determine whether you will get a follow of users or not.
- Listing fee sites – Apart from the above models, listing fee is another online marketplace business model you can choose for your venture. Here you pay classified sites to list your business on their ads. For instance, you can opt to list your business on Craigslist. When the site visitors log on to the site to search for products or service they can easily find you on the list of providers.
In summing up, selection of online marketplace business model relies on what you want to achieve as well as the availability of revenue to pay for such services. As such, you can choose one of the above models that would serve your e-commerce business better.
— Sparity (@sparity) 4 de junio de 2017