Drop-shipping, wholesaling and warehousing, and white labeling and manufacturing are some of the e-commerce business models that may be swiftly set up and run.
Here’s a look at all three business models:
Drop-Shipping is when you sell goods made, delivered, and shipped by someone else to your customers on your website. Such partnerships are usually formed between you and a distributor or wholesaler who has a warehouse full of the products that you’d like to sell.
Once the proper agreements are in place, the manufacturer or wholesaler will send you images of the products you wish to sell along with pricing.
You’ll then place those items for sale in your e-commerce store. Your job is to sell the items, and the manufacturer or wholesaler will fulfill the orders and ship them to your customers.
2. Wholesaling and Warehousing
This model is when you buy products in bulk and store them in a warehouse somewhere. Usually, people who prefer this model are selling products in volume. People most commonly use this in a B2B market as opposed to a B2C model.
If you’re like most people using this model, though, you’re selling in bulk to businesses that sell to consumers that have lower margins.
You need to create enough sales volume in most wholesale enterprises to make up for the smaller margins.
This model also involves large capital investments to purchase and house the commodity.
3. White Labeling and Manufacturing
Manufacturing is when you actually pay to get the products made for you. You will not produce the drug in white labeling, but your licensing contract requires you to place your name or logo on it as if you were the manufacturer.
So with this scenario, you are either manufacturing products overseas or importing them from overseas and putting your brand on them. You’re the top of the product chain at this point.
When you’re importing or manufacturing overseas, your margins are much higher. You get to create the product for a very low price and then sell it online for a much higher price.
You also control all the shipping and fulfillment yourself; while it’s more work, it has a lot of benefits, too. You get to control the entire cycle and always know what’s going on with the product.
Also, at this point, you can take advantage of wholesalers and drop-shippers to retail your products for you.
Writer: Irly Nurvitasari