When it comes to starting an online business, you have a lot of choices to make. The biggest of the choices may be the most important as they will ultimately define your business model and much of the future of your business.
In this post, we’re going to show you at a high-level each one of the major choices you need to consider when starting your online business along with the pros and cons so you can make the best decisions possible right from the beginning.
Let’s get right into it.
There are a million types of ecommerce stores, all with subtle differences and nuances. How the products are sources, the types of product, where the products come from, are they a curated collection.
Business-to-Consumer means you are selling directly to the end consumer that will be using the product. This is the most common type of business model and what most people think about when discussing building ecommerce businesses.
What Type of Products Do You Want to Sell?
Lets take a look at the different type of products you can sell online:
Selling physical goods is what most people think of when they think of an online store, and makes up the majority of online ecommerce businesses. Although physical goods are the most popular product type of item to sell, it also presents challenges including inventory storage, shipping, breakage, and insurance.
Digital goods are also a popular type of product to sell and has the advantage of not needing inventory storage or physical delivery like it’s physical product counterparts. Digital goods can be anything from music, ebooks, videos, images or software. The biggest disadvantage to selling digital products is piracy. However, because a digital product can be resold thousands of times over, their margins are considered the best and comes without the headaches associated with shipping and inventory management.
The third, slightly less common product type to sell online are services. Online services can range from consulting, web design and development, content writing/editing and a whole host of other service options. Selling services through an online store can be a great way to build credibility and gain exposure but typically comes with the limitation of scalability as services are typically delivered by a person and are therefore limited to that person's time.