There is a common wisdom that the ultimate differentiator and advantage in eCommerce is logistics. This is the Amazon approach of building eCommerce. I think that this is not the only way.
I think that the ultimate differentiator and advantage is an innovative and stable (both required) business model. At Divante, we work with many innovative eCommerce companies so I decided to write down some of the business models that helps our clients to build eCommerce rocketships! All these businesses are dealing with serious numbers (from dozens to hundreds of millions euro in annual turnover).
Marketplace for celebrities
One of our clients from the Nordic region offers a business opportunity for famous Youtubers to create their own fashion brands. This company offers design, products, logistics and eCommerce processes. What you need as a celebrity is to have an audience and they build a fashion brand for you. You then become the face of your own brand and they share the revenue with you. They are growing rapidly and at this moment, they have more than 2 million users every month. Celebrities generate massive traffic for them.
Another client from the Benelux region built a platform that allows users to buy furniture. Doesn’t sound so sexy, right? But the magic happens when you add furniture to the cart. At this moment, the platform sends information to manufacturers across Europe and they bid for production in real time. They bid the price and time of delivery. The commission depends on these parameters and algorithms choose the best manufacturer in real time. This is all invisible to the end client but helps our client to keep high margins and short delivery times all at once.
This client is using marketplaces like Amazon, EBay, Bol, Rakuten only to create a massive presence in Europe. They are using different brands, photos, product descriptions etc. to optimize the offer for each market and each marketplace. They compete on price but also on design and many other factors. They use A/B testing to optimize product descriptions, photos, etc.
B2B Multi Level Marketing
This client from CEE is using a multi-level marketing mechanism to engage B2B sales managers to add new products to their offer. In B2B the relationship with the client is the most important factor so having this, you can sell much more that you usually offer. The idea is to give sales managers a broad choice of additional products and engage them in up-selling. The speciality of this company are commodity products that are very hard to sell individually (low margin, low roi) but very easy to sell as an up-sell.
As you can see there is still plenty of space for new players in eCommerce.
Creative business models compounded with an ability to scale-up across borders can produce really strong players.
Read also: Who and how will succeed on Marketplaces?