Thread by @mywifequit, 8 E-com Business Models Explained (inc. pros vs cons of each model [...]

8 E-com Business Models Explained (inc. pros vs cons of each model and how they work)

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There are many ways to get into e-com.

There is no "one" best model.

The model you pursue comes down to one thing....

Risk v Reward

Some models are easy to start but hard to make a profit....

Some models are extremely profitable but have a steep learning curve...

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This thread outlines the pros and cons of each e-com biz model so you can make the right decision for your unique circumstance.

Each models is rated from 1-4 based on 4 key criteria

1) Ease of launch
2) Profit velocity
3) Sustainability and risk
4) Level of competition

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# 1 Dropshipping with your own website

How

1- Contact wholesalers to get approved as retailer
2- Build website and list products
3- Drive traffic to website
4- Send orders to wholesalers for fulfilment

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No inventory

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No fulfillment

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Low startup costs

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Easy to start

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Less pricing flexibility

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Paid ads are hard due to low profit margins

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Inventory and customer support is difficult as you& #39;re depending on a 3rd party to fulfill

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Vendors can be unreliable

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen"> Business reputation is heavily dependent on vendors

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 8
Profit velocity - 3
Sustainability and risk - 6
Level of competition - 3

# 2 Ebay/Amazon Arbitrage

How
1- Find Amazon products selling higher on Ebay
2- Copy&Paste images+product description onto Ebay
3- Post on Ebay at higher price
4- When auction closes on Ebay buy product on Amazon and ship to buyer

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">$0 overhead

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No website

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">no need to find vendors

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Brand owners will hate you

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Always hunting for arbitrage opportunities

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">High risk of getting banned

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 10
Profit velocity - 2
Sustainability and risk - 1
Level of competition - 2

#3 Retail Arbitrage

How
1- Buy low cost merch at clearance/liquidation outlets
2- Sell at higher price on Amazon FBA

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No website

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Leverage size of Amazon marketplace for fast sales

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Minimal startup costs except cost of inventory

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">100% at mercy of Amazon

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Need to invest time product hunting

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Hard to scale

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">New Amazon rules discourage this model

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 8
Profit velocity - 5
Sustainability and risk - 2
Level of competition - 5

#4 Dropshipping on Amazon

How
1- Find distributors willing to dropship for you
2- List item on Amazon as merchant fulfilled
3- Contact distributor to ship product for each sale

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">$0 start up costs

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No website

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">100s of products to list straight away

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Anyone can contact same distributor and copy you

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Amazon has strict requirements

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">High risk of getting banned (A guy lost 7 figure biz overnight like this)

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 8
Profit velocity - 7
Sustainability and risk - 1
Level of competition - 3

#5 Sell private label on Amazon
Private labeling: Place your own brand on a product you manufacture

How
1-Find manufacturer that white labels
2-Produce products in bulk
3-List on Amazon FBA

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No website

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No need to drive traffic

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">No inventory issues

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">High margins

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">High upfront cost (have to make products in bulk)

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Not ideal for beginners

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Dependent on Amazon FBA

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Attracts copycats

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 6
Profit velocity - 10
Sustainability and risk - 7
Level of competition - 8

#6 Selling wholesale goods on Amazon

How
1- Find distributors with large product catalogs
2- Buy products and list on Amazon FBA

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">High margins

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Low unit quantities

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Fast turnaround

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">100s of products at your disposal

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Selling exact same product as other sellers

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Eventual price erosion as you& #39;re listing the same product as others

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 7
Profit velocity - 7
Sustainability and risk - 3
Level of competition - 3

#7 Selling wholesale on your website

How
1- Find wholesaler
2- Build website and sell
3- Manage your inventory

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Control your own store and brand

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Not easy

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 5
Profit velocity - 4
Sustainability and risk - 6
Level of competition - 5

#8 Selling private label products on your own website

How
1-Build product
2-Build website
3- Drive traffic

Cons

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">Hardest model to master

https://abs.twimg.com/emoji/v2/... draggable="false" alt="❌" title="Kreuzzeichen" aria-label="Emoji: Kreuzzeichen">High upfront investment

Pros

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">Highest long term potential

https://abs.twimg.com/emoji/v2/... draggable="false" alt="✔" title="Fettes Häkchen" aria-label="Emoji: Fettes Häkchen">You control everything

https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">Rating (1-10)
Ease of launch - 4
Profit velocity - 7
Sustainability and risk - 10
Level of competition - 9

Wrapping things up

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Stop falling for whatever guru says is the "best e-com model"

Each has it& #39;s own pro and cons and it all depends on your personal risk/reward tolerance.

Final tweet

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If you enjoyed this thread I& #39;ll leave you with 2 things...

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1) Check out the full YouTube video where I go in depth into each business model ( https://youtu.be/v0mfGrQ40QI )

2)">https://youtu.be/v0mfGrQ40... Share this thread by retweeting the first tweet

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