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Ecommerce Business Models for Beginners (Shopify, Dropship, Print On Demand)

Published on: December 7 2022 by Nick Peroni

Ecommerce Business Models for Beginners (Shopify, Dropship, Print On Demand)

Ecommerce Business Models for Beginners (Shopify, Dropship, Print On Demand)

everyone welcome Nick Peroni here
welcome to the first module of econ
empires Academy where we're going to be
looking at a lot of the introduction
foundational stuff this module is for
anybody that is new to e-commerce or
even if you have been in e-commerce but
maybe you don't have an understanding of
the full spectrum of everything that's
out there and available this is gonna be
where we start by toking about
e-commerce business models and then kind
of move through as a progression to to
work you into the foundation of how
you're going to be setting up your
e-commerce business and brand so to
start let's just look at some of the
basics okay ecommerce is just something
that means selling things on the
Internet
alright then there are several business
models to this I don't want you to a lot
of people out there right now because of
people selling courses in the online
marketing world they they think of
e-commerce is just drop shipping or just
print on demand and that's not true
there's actually many different types
and even within the different types of
business models first you have to think
about what type of business model okay
because there's really there's really
two main classifications that are gonna
apply to 99.9% of people watching this
that's either that you're gonna be
selling business to consumer or you're
gonna be selling business to business
okay whichever one is fine like it it's
it's completely up to you I just want
you to be aware that they're different
right a very much typical drop shipping
and print on demand is going to be
selling straight business to the
consumer and a lot of times you know
business the business is going to be
marketing agencies professional services
wholesale goods right like if I set up
an agency and I help local businesses
get more customers through Facebook ads
or get more customers through local
marketing and SEO that's a
business-to-business
service right and it's a marketing
agency it's still ecommerce though right
it ecommerce doesn't mean that you have
to sell physical products okay it's just
anything that you sell online all right
and so business the business is a form
of e-commerce
where these are just some examples okay
business-to-consumer like I said is
generally gonna be where you see them
out of the physical products stuff where
you're selling dropship items or
print-on-demand but it doesn't have to
be it could be information products as
well right like one of the business
models I have is selling information
products and as a business econ empires
I sell to a consumer or you could call
it business the business I guess
whichever way you think about it but
really it's more business to consumer
because it's generally like a
solopreneur somebody getting started or
food-and-beverage
right so these are all just like some
examples of different categories
obviously this is not a complete list
but I just want you to get in the
mindset that when it comes to business
models there's two parts first you have
to understand are you selling business
the business and or are you selling
business to consumer okay
so once you know who you're selling to
then you need to choose what model you
want to use to sell to to that audience
okay
there's basically five core models that
I'm going to tok about all right
there's dropshipping
there's print-on-demand private labeling
subscriptions and selling your own
product or service okay
drop shipping is a trendy business model
right now because of low barrier entry
there's millions of product choices out
there lots of automation tools like this
is something that this may be in fact
exactly why you're here in e-commerce
but again I don't want econ empires and
I definitely don't want ecomp empires
Academy to be focused on just drop
shipping as a site backstory when I got
started with econ Vampires I created a
course called dropship the Academy many
of you have probably gone through it and
that was completely solely focused on
this drop shipping model of taking
products wholesale from China and then
fulfill selling them on a Shopify store
to consumers around the world right and
that is a low barrier entry to model to
get into it's become very trendy because
of that is like a make money online idea
but
it's certainly not the only business
model and I'm not even gonna say it's
the best business model right because
what I want you to think about is we go
through this is that there's multiple
options and I'm gonna walk you through
how you choose one that you feel is
right for you all right but if you're
unfamiliar with dropshipping this is the
idea basically you set up a store okay
and you find third party products all
right at a wholesale cost like I find a
necklace at $3 I put it on my store to
sell for $20 customer buys the necklace
you keep that seventeen dollar profit
and then your supplier shifts the item
to the customer you never have to touch
it okay that's what drop shipping is and
when done right it can be a really
lucrative really really great business
model because it's something where it's
it's low risk and there's no inventory
there's you know you so much of the the
barriers to business are not there okay
but when it's not done right and we're
gonna tok about this but when it's when
it's not done right then it can be a
nightmare here's a drop shipping example
of a store that's been around and is
still around and doing very well
they're called sugar and cotton you can
look them up basically they are sourcing
products direct from China right like
these are not their products they're not
making these they are just sourcing
products they're putting them on their
website and they are reselling them
using social media ads for a profit okay
that's an example print on demand is
very similar to drop shipping it's kind
of tiknically a form of drop shipping
but the difference we print on demand is
that you are not you're not selling
somebody else's already created products
right you are taking an item like a
shirt or a poster apparel and then
you're printing some sort of design on
it okay and then again you are reselling
it so it's similar to drop shipping in
the sense that you are not fulfilling
the item right there's third party
fulfillment companies that can link into
your store so basically if you take a
t-shirt and and put a design on it I
take a t-shirt on I put an econ empire's
design on it okay
and somebody goes to my store and buys
that the order is routed to my
fulfillment partner they print the shirt
and then they ship it
okay so print-on-demand is in my opinion
actually one of the best business models
for right now because there are so many
advantages to what you can do with print
on demand it can be so unique so
brandable you can make designs
specifically for a niche and there
there's so much unprecedented
opportunity right now because it's you
know it's it's not like us it's not a
race to the bottom like drop shipping is
print-on-demand is something where
you're actually selling unique designs
that are difficult to copy to people but
we're going to tok about print on
demand and drop shipping more
specifically and later modules so for
now I just want to introduce you to the
business model here's an example of a
print on demand store gear bunch com I
know these guys that have started the
store it's a fantastik example of print
on demand and you can see like some of
the categories they have here in
leggings capris yoga pants hoodies shoes
so basically in the shoes category they
are taking these designs these are
unique custom designs that they are
making and then they are uploading them
to this product this shoes product and
then if somebody comes in buys this
they're third party fulfillment center
will print that item and ship it to
their customer okay
and it's it's a really unique model as
you can see because this type of design
on that shoe doesn't exist anywhere else
and in fact up until very recently it
wasn't even possible for me to print a a
hamsa design on sneakers and then go on
social media for people who are
interested in hamsa and show them this
exact design in this exact item you see
how specific and how unique the
connection how brandable that connection
can be there
that's why print on demand can be a
fantastik business model when you
understand it and and you know how to
set something like this up private label
this is this is where generally
dropshipping evolved to okay because
private labeling is is a little bit more
difficult
you have to know what you're selling
right you you want a proven product idea
when you private label because you're
going to have to order in bulk you're
going to have to get your own packaging
and it can even go even further than
that to where you're getting involved in
the manufacturing process so the
advantage is private labeling or that
it's again it's very unique it's your
brand so when you're drop shipping
anybody can dropship that same exact
item all they have to do is be able to
find where you're getting the supply
from out of China which is generally not
difficult and anybody can sell it right
so it becomes a commodity and again it
becomes kind of like a race to the
bottom where you're all selling until it
bottoms out and nobody can sell it and
I'm not ragging on drop shipping because
you can make a lot of money with that
and that's how I got started but private
labeling is generally where you want to
evolve to okay because private labeling
is when you can build your own brand
private labeling is when I can take
whatever I was selling and put my brand
on it and now it's specific alright and
I'm able to bring that item in bulk to
my own fulfillment house and start
creating a much better customer
experience because I can have my own
packaging I can have my own inserts I
can have my my own logo on it right so
this is and and the advantage to private
labeling is that you aren't necessarily
manufacturing the product yourself you
just need to find a good manufacturing
partner with a proven idea and then be
able to build a brand around that and do
the marketing okay so private labeling
is probably probably the best business
model when you're able to evolve to that
point an example I'm sure that all of us
have heard of Kylie cosmetiks which is
now considered a billion-dollar company
and has put Kylie general path to become
the youngest billionaire ever and the
amazing thing about Kylie cosmetiks okay
it's a Shopify store Shopify has
actually written up a whole success
artikle on hair but the amazing thing
about Kylie cosmetiks is that she did
not invent this product right this is
basically private labeling at its finest
where she was able to find a third party
manufacturer that already produces these
types of items and then she goes to them
and she says hey I'm Kylie Jenner I have
a really massive social media brand I
want to create my own beauty product
okay and so they take what they already
have they work with her to formulate
something that is specific to you know
what she wants and what she likes and
then they she builds her own brand
around it builds her own packaging
around it to make it very unique and
very specific to her and then she uses
her social media brand to launching and
does 300 million dollars in sales in the
first year now obviously that's not
something that just anybody can
duplicate because she's one of the
largest Instagram Instagram celebrities
in the world but the point is that she
is not making this product there's
nothing actually super-unique here
except for the branding except for her
so that's why private labeling can be so
powerful because while none of us may be
celebrity influencers you can still
create an amazing brand and you can
still create amazing marketing and when
you're able to do that you stand out
from everybody else that might be able
to try the same type selling the same
type of thing right and generally when
you private label as well you're able to
bring that manufacturing in like since
you're working directly with the
manufacturer you're gonna get even lower
margins because you're ordering in
larger quantities so that's the
advantage to private labeling but again
it's not where you're gonna start right
this is where you evolve to because
you're gonna have to know what you're
doing know how to build a brand know how
to market know how to connect with
suppliers I'm gonna teach you all that
stuff in this Academy okay because I
haven't you know doing this kind of
stuff but again it's it's still
something that you're gonna evolve to me
because it's gonna require startup
investment and it's gonna require time
right so you need money in time to start
a private label brand and so you're
already gonna have to have some success
in my opinion right in my opinion I
think you should already have some
success before you move into private
label one subscription model this is
also difficult one I think when you're
just starting out because again this is
going to require that you know your
niche
it's gonna require you had creating your
own supply chain investing in your
packaging and branding you know because
a subscription model when you're selling
physical products now it's important to
note that you can sell digital products
as a subscription model as well right
and that's a lot easier because you're
just delivering the content online but
most people I think are here to learn
how to sell physical products and when
it comes to a subscription model that's
that's gonna be more difficult you're
gonna have to understand your logistiks
pretty well for you know when somebody
signs up to when they're rebill is to
when the product goes out and how are
you syncing all of your deliveries that
they're going out and reaching a
customer on a uniform timeframe each
month regardless of who signs up and who
drops off right so there's there's
challenges there that obviously can be
figured out because other people like
Birchbox are already doing it and have
proved this model I've never personally
built a subscription business myself for
physical products I've built one for
digital products but you know this so
this is just a model I want you to be
aware of and give you an example of a
company that's doing this now I do work
with people the partner right now who
has built a very successful subscription
box so I understand it and I know how it
works but I just want to let you know
that personally I haven't built one
myself the advantage to a subscription
model of course is that you are creating
recurring revenue right and and that's I
mean you still have to deal with a churn
rate but you're you're creating
repairing revenue and that's a really
really powerful thing anytime you can do
that for me personally I like the
digital subscription model better
because there's no physical product
fulfillment that has to be shipped out
so your margins are a lot higher and
money is easier to collect but either
way the advantage of subscription is a
recurring revenue model and that can be
really really powerful when you're able
to build that but again for physical
products I think it's a tough place to
start unless you just have like this
amazing vision and this amazing idea
that you're willing to invest in and
spend time and you know go all-in right
but from you know that that's a choice
for you you have to decide that because
it's going to require time
effort to be mmm a being require
investments if you don't have the money
yourself to be able to get that all set
up get your packaging your your branding
your your minimum order items that you
need and then finally your own product
okay and these are not again this is not
every business model in existence but I
think these are the main ones that are
going to apply that just about everyone
here this could be a product that like
to scrub daddy right it could be your
own product that you invented it could
be that you're a small business owner
and you already have products you sell
within some type of retail location and
you want to expand into e-commerce maybe
you have your own brand whether you make
the product yourself or you don't make
the product right but that's generally
where this is going to apply somehow you
are making packaging and shipping the
products on your own
alright that's that's what's going
happen really for your own product until
you find some type of co-packer or you
hire some type of fulfillment team where
most people start out with their own
product is packaging it and shipping it
right from their home hiring family and
friends to help them out you know hiring
college kids or whatever to be able to
start small and ship and then eventually
move into some type of co pack or a
warehouse that can ship for you and they
can integrate with your with your online
ordering system okay now again I also
want to note here that this could be a
digital product as well write your own
product or your own service doesn't
necessarily need to be physical this
this covers a lot of areas right this
could be if again if you're an existing
small business right that has products
you sell or maybe you are like a
cleaning service or you know a
photobooth service or something that
that could be expanding into an
e-commerce channel and that's your own
product or service or you could have a
digital product right you could sell
course you could sell some type of
master class or any type of you know
information it's valuable to people but
again the point is here is that you are
the one creating it you're the one
controlling it you're the one packaging
it and you're the one delivering it
whether that's shipping it or delivering
it online this is something that can be
a fantastik
to start the only barrier to entry with
your own product is you have to be the
long that has the idea you have to have
something unique and creative that is
already in existence or that you're
already building okay and here's an
example from a highlighted Shopify store
called Jasmine's kitchen which is sorry
about this update here Jasmine's kitchen
which is you know they you can see they
have their own kitchen products where
they're selling I'm quite sure what the
stuff is flavors and sorted flavors and
seasonings right so they're they're
selling Indian cooking kits so that's
what they're selling and they're using a
Shopify store to be able to list their
products online and then when somebody
buys it it gets shipped from wherever
their local fulfillment center is okay
so they started as a small business and
then expanded into e-commerce now it's
important to know here after we've gone
through these business models that no
business model has to be standalone
right it doesn't mean you can't mix and
match doesn't mean your business can't
evolve from one thing to another thing
right for example you could have a
business that sells dropshipping
products and you eventually start adding
a subscription model as well right you
could have a dropship Plus
print-on-demand store say for example
golf and if you're in the golf niche you
could sell and dropship golf products
while also creating your own line of
golf t-shirts right and they could both
be sold on the same store there are
multiple ways that you could mix and
match these types of things even within
the business the business business the
consumer model right if you have your
own product say you might sell it direct
the consumer for your retail price and
then you may also have a wholesale price
that you're willing to sell direct to
businesses all right so this mountable
was or this lesson here was really just
meant to give you an overview of what I
think the main business models are that
most people are using again I believe
that 95% of people are going to fall
within these categories here so if
you're new and you're just getting
started I really wanted to be able to
give you this
introduction to understand the different
models in e-commerce and in the next
lesson we're going to look at now how
you start narrowing into what business
model is right for you and and where
should you be starting all right
see in the next lesson