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In 2018, consumers spent over $517 billion online<\/a> with U.S. companies. Each year, ecommerce takes a larger bite out of traditional retail sales as consumer demand for online shopping and convenient delivery grows stronger. As a result, your company has a huge opportunity if you wish to expand (or establish) your online offering.<\/p>\n <\/p>\n Fortunately, it\u2019s easier than ever before to set up an ecommerce business. Previously, an aspiring online merchant would need exceptional coding talent to create its online presence – or the start-up capital to hire said talent. Today, there are a number of online platforms like Shopify<\/a> and BigCommerce. Not to mention marketplaces like Amazon that help companies get up and running in a matter of days.<\/p>\n But there\u2019s something an online tool or platform can\u2019t decide for you, and it requires careful consideration of your business, your potential customers, and the way they shop.<\/p>\n It\u2019s your ecommerce business model.<\/p>\n <\/p>\n Contents<\/p>\n Your ecommerce business model is simply \u201chow you plan to make money<\/a>\u201d. It\u2019s the way you set up your company\u2019s operations, marketing, customer service, and financing in order to meet this objective. While there are several ecommerce business<\/a> models, many ecommerce businesses fall into one of two boats: business-to-business (B2B) or consumer-to-business (B2C).<\/p>\n Recently, a third business model emerged as a compelling option: direct-to-consumer (DTC). We\u2019ll focus on these three business models in this article.<\/p>\n B2C businesses sell directly to consumers. That said, B2C companies can also have B2B channels, like Microsoft, which sells word processing software to both individual consumers and to corporate clients. Microsoft also has a B2G (business to government) channel, but we aren\u2019t traveling down that road today.<\/p>\n Platforms like Shopify<\/a> and Amazon drive the growth of B2C ecommerce, giving online merchants easy availability to off-the-shelf web design, checkout, and accounting tools.<\/p>\n B2C businesses share the following characteristics:<\/p>\n Amazon is a B2C company. The online retailer dominated the competition by slashing prices and prioritizing convenience through same-day and two-day delivery options. Additionally, they built a powerful recommendation tool that showed customers other products they might like. Today, this B2C goliath is one of the most valuable companies on the planet.<\/p>\n By 2021, global retail ecommerce sales will hit $4.5 trillion<\/a> making it an exciting industry for aspiring entrepreneurs. It\u2019s also a flexible industry since online merchants can choose from several product models based on their capabilities: To start an ecommerce business<\/a> you can select multiple product strategies.<\/p>\n Whichever model you use, your B2C company must pay attention to the following to be successful:<\/p>\n B2C companies don\u2019t need widespread brand recognition the way B2B companies do. However, they should still have a strong brand relationship with their prospects and current customers. This creates the emotional response B2C companies need to increase online sales, and turns their products into a must-have rather than a want-to-have.<\/p>\n Almost everything associated with your company, from the customer’s unpacking experience to the helpfulness of customer service, affects your brand. So pay attention to all instances in which the public interacts with your people, products, or marketing.<\/p>\n Recall that many consumers make purchase decisions based on emotions. This means that they also make quick purchase decisions, and they can be easily deterred. A customer compelled to buy your product based on an Instagram ad might quickly abandon the purchase if your website takes too long to load. A poor mobile experience can cost your company a neat sum in sales considering how many people shop through their phones.<\/p>\n \u201cA 1 second delay in page response can result in a 7% reduction in conversions.\u201d- Kissmetrics.com<\/a><\/p><\/blockquote>\n Make it easy for customers to find the products and information they need. Above all, provide a seamless customer experience when they\u2019re ready to pay.<\/p>\n Your customers expect an excellent customer experience. Delivery experience accounts for a critical chunk of their experience. Customers expect their packages delivered accurately, on time, and at low cost. This requires a strong delivery strategy that accounts for different shipping providers and the best shipping rate<\/a> by using algorithms such as carrier rate shopping and shipment rule automation<\/a>.<\/p>\n Online merchants can use the following platforms to power their B2C ecommerce business:<\/p>\n <\/p>\n BONUS:<\/strong> Before you read further, checkout top trends in ecommerce<\/a><\/p>\n Under the B2B model, businesses sell directly to other businesses. Selling to businesses rather than consumers is different in a few key ways:<\/p>\n Flexfire LED is an example of a B2B company. The ecommerce company, which enjoys $5 million in annual sales<\/a>, sells LED strip lighting products to companies like Apple, Google, and Disney.<\/p>\n Powerful trends move the B2B ecommerce industry forward. What may have been useful for B2B companies five years ago, may not be so effective today. And keep in mind that just because you\u2019re a B2C company, doesn\u2019t mean you\u2019re not already a B2B company – you just may not have tapped into that opportunity yet.<\/p>\n Flexfire LED is an example of a company with both B2B and B2C business channels. Their customer base is split between homeowners (consumers) and businesses, nevertheless only 20% of the company\u2019s revenue comes from consumers.<\/p>\n Early literature on B2B ecommerce sales focused on differentiating between B2B and B2C. Today\u2019s experts recommend taking a B2C approach to B2B. This is because while the two models have different objectives, they should share the following tactics to meet their goals:<\/p>\n B2B customers have a buyer\u2019s journey, but it\u2019s different from the B2C journey. While B2C customers move through the buyer\u2019s journey relatively quickly and mostly on their own, B2B customers consult with superiors, seek approval from a decision maker, and have to comply with internal procurement policies. Generally speaking, such companies need content that addresses the following stages of a B2B buyer\u2019s journey<\/a>:<\/p>\n A prospect will identify the need for a product, typically during business strategy development. Before and during this stage, a prospect may know they have a problem, but struggle to define it. A business will take time to clearly document what a product must do, what results it will achieve for a company, and how much it will cost. These requirements either follow internal processes or are decided by a committee.<\/p>\n B2B companies should think about what problems often drive customers to their product, and ensure there is content available to help them understand the problem. They should also clearly outline their product\u2019s features, how those features translate to benefits, and how their company serves as a partner.<\/p>\n This content is not meant to hard sell your product. In fact, it\u2019s best to provide product-agnostic content. Your prospect is still identifying what they need. Pushing them towards a pricing page is a harsh interruption to the stage they\u2019re in. Rather, continue to nurture and push them towards content that answers questions they likely have.<\/p>\n This is your opportunity to demonstrate an understanding of your prospect\u2019s industry, business, and pain points. In doing so, you build trust.<\/p>\n At this point, your prospect understands their problem and is looking for potential solutions. As a business, they likely have procedures about obtaining quotes from several suppliers to ensure fairness and the best possible value. Before they do this, they\u2019ll eliminate options and request quotes from a shortlist.<\/p>\n B2B companies should present information on all<\/i> of the solutions available to companies. Remember: They don’t care to work with you just yet, so it might be premature to start selling your product. At this stage, develop content comparing several tools or solutions, so they start to view you as the expert in the industry. Presenting the competition\u2019s offering also builds trust.<\/p>\n A prospect can reach this stage in several ways. They might spend a significant amount of time on your blog before exploring your pricing page or they may request a quote. At this point, they will want information on topics like buying on account, volume-based discounts, and more.<\/p>\n B2B companies should prepare content that answers these questions. Once the ball\u2019s rolling, you want to keep the momentum going. The more information your company makes readily available, the faster a B2B purchaser can navigate internal decision-making processes at their company.<\/p>\n Are you dealing with a gatekeeper, an influencer, a decision-maker, or a blocker<\/a>? Understand who the different stakeholders are and how to engage with them. For instance, an influencer may not make the final buying decision, but have been dispatched to conduct research and present it to executives.<\/p>\n In this case, it\u2019s important to assess how often they meet with the person holding the purse strings and assess whether you should speak to another influencer. Moreover, understanding the people whose job it is to avoid risk and maintain the status quo (e.g. legal) is critical for B2B companies. These are the stakeholders who may kill your sales opportunity.<\/p>\n While larger brands develop their own ecommerce capabilities, small to medium sized businesses can leverage the following B2B platforms:<\/p>\n The DTC business model is quickly growing in popularity, spurred on by trends in influencer marketing, peer-to-peer marketing, and the emergence of ecommerce capabilities on social media websites. This business model has the following characteristics:<\/p>\n While this may sound like a small potatoes game played by influencers and home businesses, DTC has attracted the attention of larger brands. Companies like Nike have increased their focus on their DTC channels in an effort to strengthen their brand relationship with consumers and own the customer journey. In fact, Nike expects its DTC sales to hit $16 billion by 2020<\/a>.<\/p>\n <\/p>\n The typical B2C product journey looks something like this:<\/p>\n With DTC, the journey looks like this:<\/p>\n While experienced retailers like Nike experiment with DTC, startups like Casper, Warby Parker, and Dollar Shave Club are jumping right in because of the benefits described below.<\/p>\n Brands invest tremendous resources into getting their marketing, products, and packaging just right. But once their products hit a reseller\u2019s shelf, they\u2019re at the mercy of a store\u2019s sales associates. A poor interaction with a rep may lose the sale or worse, damage a consumer\u2019s image of a brand thereby reducing the chances of a future sale.<\/p>\n A direct-to-consumer model gives brands more control over the customer experience<\/a>.<\/p>\n Brands who use DTC have more data on their customers, empowering them to maximize their cross-selling and upselling marketing activities. They can analyze the customer lifecycle better to understand why their customers buy specific products.<\/p>\n By going the DTC route, brands effectively eliminate the middleman. In doing so, they can reduce prices and attract more customers. Warby Parker found success by applying the DTC model to an industry where middlemen drive up the cost exponentially<\/a>.<\/p>\n If you want to adopt the DTC model, you\u2019ll need to take the following activities seriously.<\/p>\n Glossier<\/strong>\n
What is an Ecommerce Business Model?<\/h2>\n
The B2C Business Model<\/h2>\n
What Are the Characteristics of a B2C Ecommerce Company?<\/h3>\n
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How Can Your Company Succeed at B2C Ecommerce?<\/h3>\n
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Building a Strong Brand<\/h3>\n
User Experience<\/h3>\n
Mapping Out an Effective Delivery Strategy<\/h3>\n
What B2C Ecommerce Platforms are Available?<\/h3>\n
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Business-to-Business (B2B) Ecommerce Model<\/h2>\n
What Are the Characteristics of a B2B Business Model?<\/h3>\n
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How Can Your Company Succeed at B2B Ecommerce?<\/h3>\n
Taking a B2C Approach to B2B Ecommerce<\/h3>\n
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Building Content for the Entire Customer Journey & For Multiple Decision-Makers<\/h3>\n
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Understand Your Various Stakeholders<\/h3>\n
What B2B Ecommerce Platforms are Available?<\/h3>\n
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What About Direct-to-Consumer (DTC)?<\/h2>\n
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Why Are Companies Adopting the DTC Business Model?<\/h3>\n
The Difference Between B2C and DTC<\/h3>\n
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Brands Have More Control Over the Customer Experience<\/h3>\n
Brands Have More Control Over Customer Data<\/h3>\n
Brands Can Sell Products at a Lower Cost<\/h3>\n
How Can You Succeed at DTC Ecommerce?<\/h3>\n
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Who is Succeeding at DTC Now?<\/h3>\n
\nGlossier, the beauty company now worth over $1 billion, started with a beauty blog, Into the Gloss, founded by Founder & CEO Emily Weiss. When Weiss launched her first products in 2014, community engagement, inbound marketing, and social media influencers propelled the company to its current unicorn status.<\/p>\n