Current business models of eComm (Marketplace, Inventory-owned)

E-Commerce Companies: The Model is the Message


E-commerce companies and dynamic market scenario run parallel. Adapting to the changing market trends, B2B and B2C online companies implement different models of e-commerce, namely Inventory Model, Marketplace Model and Hybrid Model.

Inventory Model: A seller-oriented model with the seller owning the entire inventory and managing processes on his own website, from product quality to delivery; this model is quite similar to the offline buyer-seller relationship. The inventory model is suitable for those who already have an offline retail business and want to make their virtual presence as well. The drawback of inventory model is blockage of goods procurement and stocking along with high capital investment.


Marketplace Model: An interactive platform for buyers and sellers with an extensive product range, this model relies on third party for delivery and inventory management. In this model, it is easier for both large and small scale B2B and B2C sellers to access a wider base of customers or buyers. This model is preferred by those seeking minimal capital investment and quick results. Tradus, Ebay and Shopclues, for instance, follow the marketplace model. However, the large base makes it difficult to check product quality. Also, the dependence on third party for delivery and transit could pose a challenge.


Hybrid Model: As is evident by the name, this model combines the attributes of both inventory and marketplace model by means of the organization being in control of an interactive platform and the inventory. Hybrid model is preferred by most e-commerce companies, like Flipkart, Myntra, Amazon and Jabong (that also has its logistics and customer care service) to name a few.


Though the most preferred model is still debatable, the points to consider basically revolve around customer satisfaction, ROI and infrastructure. Whatever the model followed by the e-commerce companies, it is the customer who is ultimately basking in all the glory.

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