For any person that is considering starting an online e-commerce business, they might have a one-track mind concerning the options available to them. However, e-commerce is anything but one directional because there is more to it.
While e-commerce in its simplest form is selling items, marketing products, making sales and generating a profit online, your journey to that point is extremely important. This is where you have to consider the different methods that are available.
Many people simply see it as having a website, displaying their products and making sales without sparing a thought for how they are going to store their goods or what options are available to them. However, there are options and these are known as own brand e-commerce, drop shipping and affiliate e-commerce. All of these options work differently and are designed to fit the varying needs and desires of those who are looking to make money from an e-commerce business.
If you are wondering what e-commerce drop shipping is, then it is an option for those who want to take a hands-off approach to selling online. An agreement is made between you and the drop shipper which empowers them to take care of your stock. This means that you won’t need to physically hold any stock in a warehouse or even in your garage, making it easy for you to sell as there is less commitment both financially and in an organisational sense.
So, when a sale is made on a website, a third party company will process the order and then ship it to the customer. While this is an efficient process for the seller, it will mean that the item contains the branding of the third party, while they will also take a significant percentage of the sale.
Own Brand E-commerce
For those who want complete control over their e-commerce business, own brand e-commerce is the right option for them. This means that you can take control of the sourcing, the branding and the landing of goods, all of which will be stored in your warehouse unless you choose to opt for a fulfillment service that is offered by Xune. There is a higher level of control when it comes to the entire process and it enables the retailer to plan ahead should they want to establish their brand as one of the major players in their niche. What is the difference between standard e-commerce and drop shipping? The own brand is more structured and controlled approach while drop shipping uses a drop shipping, third-party company to handle and ship the goods.
Affiliate e-commerce is a more simplified approach in some ways as it just requires a visitor to click an add which takes them to a merchant’s website, where if they make a successful purchase, a percentage of the sale is paid back to the referral website.
What does this all mean?
If you are looking to own a business that can stand the test of time where you can take greater control over the profits then own brand e-commerce is the best choice. It affords a greater level of scalability but puts the business owner in complete control from end-to-end.
Dropshipping is an ideal choice for those who want a more simplistic approach but the downside to this is that it does come with less control and it is harder to sustain. This option does pose questions such as why would a customer purchase from you when they can go direct to the source and often pay lower prices.
Finally, affiliate e-commerce is ideal for those who do not have money to spend but have plenty of time to offer, where they can generate a relatively small income in comparison to the other methods.
So, it is clear to see that own brand e-commerce is the best option if long-term success is what you are aiming to achieve. Speak to Xune about your project, we’ll be glad to provide free advice on how to get started.