Developing a Sustainable Online Business Model

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Online Business ModelOpting for an online vertical is relatively simple; however, generating revenue through an online business is a different story. Online shopping has completely changed the way businesses are being operated. It has not only offered an additional platform to market & promote products & services but also given an access to the untapped territories.

However, most of the retailers just create an online store similar to their current physical store. Retailers choosing an online vertical should develop an online business model.

Retailers can choose from a few of the prevailing standard business models such as:

 - Direct manufacturer model – Almost all the manufacturers of goods & services uses this model. They create an online store to list & display their products on it. Customers can directly reach to them and can transact online.

Merchant model - Web Sites such as Amazon come under this category. It is simply traditional retailers or wholesalers of goods & services which sold their items through its family of web sites. It acts as a channel or marketplace for other retailers to offer their products and taking a percentage part of every sale. With this it maintains its standing as a market place which doesn’t require management of inventory.

Person-to-person trading model - Web sites such as eBay comes under this category. In this category, buyers & sellers are given a common platform where sellers list their items on sales and customers need to bid for their items. This gives a chance to every seller to auction ad sort their products on the basis of product categories.

Community model -These are the stores based on Facebook or Twitter. Customer loyalty is the driving factor in this model. Revenue generation is  from the advertising or any paid premium features. The business is usually driven by the customers who are familiar or using the products.

One thing clearly derived from the above said business models are that the customers are able to choose from the products pushed by the retailers. All the business models offer a limited number of products or brands of items from which a customer needs to select his desired products or services.

It is very evident that the online vertical has revolutionized the way businesses are being operated. However, the next revolution is going to be a game changer where customers can push their demand to retailers & retailers who are competent enough can fulfill the online orders.  

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