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Business Models Of Marketplace


There are different types of business models –

1. Drop Shipping

In this business model, the store owner sells items on his website without holding the inventory that means someone else manufactures and ships the product to the customer. This frees the store owner from the hassle of managing inventory, warehousing stock, delivery or dealing with packaging.

For example, there is a B2C domain e-commerce store owner who sells shoes. And have a tie-up with third party supplier/producer/manufacturer. The suppliers will provide the inventory of the shoes and store owner will list them on the web store.

Now whenever a customer will make a successful order, notification will be received by the supplier. The supplier will then dispatch the item to the buyer and the store owner will get a commission on the sales.

2. Wholesaling & Warehousing

Warehousing business model is more of a supply chain management process where the whole mechanism is concerned on to have a track and control over the movement and storage of products stored in Warehouse.

In this, the web-store owner buys products in bulk and store them in a warehouse.

For Example: The customer buys the product from the website. And the web-store owner takes care of the whole process from product purchase, warehousing to product dispatch just like Jabong.

3. Service Based

The service-based marketplace is growing at a very fast pace because they don’t need huge investment as they are based on services. The web-store store owner can sell booking services as a product eg, Uber, Airbnb, etc. Clustering service providers under one platform will offer a wide range of services.

4. Subscription Based

In this business model, products to customers are delivered at regular and scheduled intervals. And customers pay for the goods and services on a subscription basis like monthly, quarterly or annually. Netflix is one such example of the subscription business model.

This business model is the reliable income channel which can lure customers to purchase additional subscriptions via incentives or encourage their contacts to subscribe.

5. White-Labelling & Manufacturing

Manufacturing is when you’re actually paying to have the items created for you. While white labeling allows one to put his brand on the product or service as if he is the manufacturer. This type of business models is most likely to fall into the food, beauty and wellness industries.

For example- In a grocery store, you find all sorts of products under a brand name say ABC. Does that brand ABC has manufactured all those products? No, they simply have various companies that provide those products and are willing to put the product in ABC brand packaging instead of their own.

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