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The seven types of ecommerce business - and why it’s essential to know which type you are

The seven types of ecommerce business - and why it’s essential to know which type you are

October 18, 2012 by Chloë Thomas

The seven types of e-commerce business - and why it’s essential to know which type you are/number sevenEcommerce businesses come in all shapes and sizes and unless you know, with clarity, which type you are, you’ll find your business struggling to succeed.

Some have shops as well as websites, some sell on Amazon or eBay, others send out catalogues. The type of ecommerce business you are in affects everything you do with that business — from stock control to finance to marketing.

Once you know your type, you can more easily work out what to do next. Every single ecommerce business fits into one of these seven types. Understanding the nature of your own business will fundamentally change the way you run and market it.

What are the seven types of ecommerce business?

1. Online only

The only way to see the products is online. Examples include: asos.com, lookfantastic.com, Made.com.

2. Mail order

A transactional website plus a printed catalogue, and possibly one or two physical stores. Examples: Boden, House of Bath, Lands End.

3. Big bricks and clicks

These business have lots of physical stores as well as an ecommerce website. Examples include: Argos, Boots, Topshop.

4. Boutique bricks and clicks

These businesses have just one or two physical locations plus the ecommerce website. Examples include: Boswells, Burford Needlecraft, Brownsfashion.com

5. Mainstream piggyback

These businesses use the likes of Amazon or eBay to market the products, with no website of their own.

6. Niche piggyback

Where sellers of similar products come together to market more easily, usually retaining their own blog or ecommerce site elsewhere too. 
Examples include: the craft world (Etsy, Folksy), hotels (hotels.com, laterooms.com), jewellery (Boticca), and Books (abebooks.co.uk).

7. Full multichannel

These businesses use multiple shops, catalogues, and ecommerce and by far the most complex and most difficult to run. Examples are: Bravissimo, Crew Clothing.

Mail order is very different to online only because a catalogue exists for a long time which puts restrictions on your merchandising — you’ve got to keep products in stock for longer, and you are very likely to have to deal with backorders.

Bricks and clicks are different to other types because you’ve got all the overheads of stores to deal with, but also the opportunity to use those stores to drive traffic to your website — and you can create a pick-up-in-store delivery option.

The piggyback types are a whole new way to do business online — no more struggling to get your website right, just use someone else’s and let them bring you business. Then there’s full multichannel — encompassing it all, and the most heavily reliant on good integrated systems.

How the different models work

Your ecommerce business structure influences everything you do in your business, from your USP to your team structure, to your finances. But in particular it has a big impact on how you market your business; if you’re a piggyback then the person you piggy back on is driving your traffic, so you don’t need to worry so much about marketing, you need to focus on product and price. Whereas if you’re an online only you have to drive your own traffic — so you’ve got be busy with your marketing.

Certain marketing methods suit certain types of ecommerce business and this is just one reason why it’s important to know what you are!

For example a full multi-channel business should have social media low on its priority list, and will seriously miss out if it ignores email. A mail order ecommerce business must focus on email, offline promotions, search engine optimisation and remarketing.

By working out what type of ecommerce business you are, you can determine where your effort should be focused in order to get the best return on investment and ensure your business is a success.

Chloe Thomas is an eCommerce expert and the author of eCommerce Masterplan.

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