The gig economy is not new, and it’s not a result of the pandemic, either.
Still, there are reports of employers not being able to find labor to fill their vacancies, even when they are offering higher than normal wage rates.
Though the pandemic may impact us in ways that remain long after COVID-19 is over. In the gig economy, workers are focusing less on traditional, full-time jobs and more on flexible positions.
Gig Economy vs E-Commerce
At an individual level, both terms represent increased flexibility to creating a lifestyle business. The gig economy (in its original form), although flexible, still represented a employer / employee relationship. Instead of being an employee, you are a contractor.
Its popularity only became mainstream news when Uber muscled in on the taxi industry, causing governments everywhere to rush in new legislation to protect the exorbitant fees they collect from taxi owners.
Then, when governments everywhere shut down a large part of their economies due to Covid, their taxation revenues fell by the wayside, as business’s closed their doors, and layoffs more commonly fell on workers who were already in precarious financial positions.
The gig economy gained a new lease of life, but by some reports it is now increasingly tilted towards the informal gig economy.
It is assumed that 35% of Americans rely on the gig economy as a primary source of income or a part time income.
This statistic I feel is broad, It is from the government after all, and includes everything from services, to selling online.
Older workers were less likely to work from home. In the survey, twenty-five percent of employees aged 55 to 64 worked entirely from home.
For comparison, 33 percent of employees ages 25 to 34, as well as those aged 35 to 44, worked entirely from home or telecommuted.Source Fed Reserve.
Roughly 25 percent said that they were spending more time on, and earning more money from gigs (including e-commerce).
As a way of creating a lifestyle, the gig (Uber, and services), economy falls short on the income side of things. It is known to be inconsistent, with varying amounts earned week to week.
Often it is used by people who have another job or…
Women with young children, juggling their time between, caring for their children, and supplementing the household income. These two demographics make up a large part of the gig economy. Both formal and informal.
So the reality is, it is used more by those who want to supplement their income, and hopefully improve their station in life, rather than by people looking for a change in lifestyle.
One interesting fact found in various survey’s, is that the majority who participate in the gig economy, don’t have college degrees.
Much of the formal gig economy now relies on Apps downloaded to a phone. It is more about you securing some income, rather than building a business, which is the main aim of E-Commerce.
Lets look at E-Commerce.
The term E-Commerce covers different business models. They are represented by the abbreviated terms below.
- B2B: – Business to Business
- B2C :- Business to Consumer
- C2B :- Consumer to Business
- C2C :- Consumer to Consumer
- B2G :- Government to Business.
Business 2 Business
Typically this model supplies products, usually in quantities a retail consumer would not utilize. These could include office materials, furniture, specialized tooling for car repairs etc.
This model can, and often does involve complicated logistics, particularly if importing or exporting large quantities of items or heavy items.
It could go something like this: >>Manufacturer>>Shipping agent>>Trucking or Shipping company>>Warehouse>> Distribution.
At its most simplistic level, it could be a business wanting a broken window replaced, and googling window installers in their local area.
This is also the largest earning model of all the E-Commerce models, with quantities ordered in bulk, and follow up orders based on quantity, to keep pricing at a minimum.
The downside to B2B is quality control, as there will be items that will not perform to the end users requirements, and will need to be replaced, or repaired.
More logistics required and a cost to the supplier.
Business to Consumer
This is much like the customary retail model except it operates online. The dynamics of this model are similar to normal retail >> Manufacturer>> Wholesaler>> Retailer >> Consumer.
This could also be Supplier>> Consumer. For instance a garden care company, renovating company, or landscaping company, all provide a “needs” based service to the end user.
Other variations include memberships, discounts, and loyalty rewards.
A variation can be Manufacturer>> Affiliate Marketing Manager>> Affiliate Publisher>> Consumer.
Obviously a huge model. In E-Commerce the large tech companies like Google, Facebook and Twitter rely on this model for a large part of their income.
Consumer to Business.
This one is more common than people think. Take for instance Influencers on Twitter. If they have enough followers, then business’s will approach them for shout outs.
Good freelancers, bloggers who sell publicity space on their websites, are others in the C2B exchange.
It is an inconsistent business model for gig workers, due mainly to the trouble freelancers, and others have in getting a regular flow of work.
However if your well known (the top 1%), then the big dollars flow in.
Consumer 2 Consumer.
This is a very popular E-Commerce model. Think E-Bay, facebook market place, Craigslist and many other classified sites.
The online version of a garage or car boot sale.
Although it is showing signs of declining in popularity with increasing costs, it is still has the biggest share of all consumer spending on line.
Other forms of E-Commerce
Rarely mentioned is Government and Public Administration e-commerce. Paying your utility bills online, or governments purchasing office items using a business’s website. If that business is a preferred supplier. B2G is outside of the public online space, so it is not really worth spending to much time on that here.
If your business were wanting to supply a service or item to government, there is generally a muddled process to go through, and most likely a long… long wait for an answer.
This involves a mix of all the above models. It is possible today for an online store to introduce an end-purchaser shopping experience for consumers, yet still offer mass wholesaling for business clients.
All this takes, is some programming of the vendors site, so that both wholesaler and consumer are accommodated.
Three Types of E-Commerce Sites
- Vendor Specific
- Selected Seller – Single Brand
- Multiple Sellers.
The most common type are the Vendor specific online webstores. Think of brands, and like the brick and mortar stores in your town. There is a similar thing on the web.
This is not solely the domain for big business either. There are plenty of solo entrepreneurs who have made up websites to sell their wares.
For instance not only do billion dollar companies like Red Bull and the Economist have stores on Shopify, many everyday entrepreneurs do as well.
Selected Seller – Single Brand
Amazon:- Could be described as a Selected seller – Single brand. In other words, “Where did you get it?” – “Amazon.”
But Amazon didn’t make it (although Amazon does sell its own stuff), For that thing you bought, you had probably 10 different choices, you just selected the product that had the best price / options or warranty.
Some people confuse this with dropshipping. It isn’t because Amazon warehouses the products, and fulfills the orders.
Sometimes even Amazon, with all its checks and balances, runs into trouble with this business model as I show here.
E-Bay is the best known. Like Amazon: “Where did you get it?” – “E-bay,” however there is a big difference between the two.
E-Bay is a platform where anyone can sign up, to buy and sell any items the platform allows.
Obviously they have some restrictions. Drugs, guns and porn.
Retailers and dropshippers regularly list items here as well.
They are very diverse platforms, with New, used, unwanted and collectibles among the many things listed on these sites.
Users include business’s, who use them as a place of discovery but anyone, who has the inclination, can set up a store on E-Bay.
Many people over the years have made good money finding out which items sell well on E-Bay, and focusing their efforts on those.
Selling collectibles, selling second hand items, dropshipping fishing lures and many others have all done well in the past (and still do).
Avenues for Earning Money with E-Commerce
Basically there are 5
- Affiliate Marketing
- White Labeling
- Private Labeling
- Subscriptions. Newsletters and the like.
There are numerous articles on this site about affiliate marketing. It is an income model made popular by Amazon and Clickbank.
Basically every time someone buys off your website, you are paid a commission, which comes from the firm’s marketing budget.
These days Amazon has slashed the commissions they pay out to affiliates.
However Affiliate marketing shows no sign of slowing down. Some affiliate companies have been consolidating their market position by merging or taking over smaller companies.
Awin and Rakuten are a couple that come to mind, and they have been expanding their presence in the affiliate networking arena.
This site has plenty of reviews showing how people can setup an online affiliate presence, to earn revenue from numerous sources, including Amazon, Clickbank, subscriptions and many other business’s (in a multitude of categories), wanting help to promote their products.
This is a good way to earn money online, and you can earn money quite quickly.
I am not promising you will be able to retire next week though.
Unlike affiliate marketing, you need a bankroll up front.
Advertising can be expensive.
You set up an online retail store, and people buy and pay for items off your site.
Once you have an order, you contact the wholesaler, pay him, and the wholesaler dispatches the ordered item to the buyer.
Unlike a retail store however, you do not have to stock products.
Using a product catalogue is an invaluable resource with dropshipping. There are lots of options out there. I am not going to go through them all.
WooCommerce and Shopify are two of the more popular dropshipping platforms. Woo commerce is a free open source platform but, some of the extensions come at a cost.
1 in 4 E-Commerce sites are WooCommerce.
Shopify on the other hand is a paid platform with numerous integrations, and continual tech development, to help you become successful with dropshipping.
You can see what Shopify offers at this link.
Another popular way to earn revenue online.
Paid subscription services are commonly for those selling information, say, stock prices and buy and sell tips. How to information, and educational information, are two others popular in this domain.
Others would be sites like Medium, where you can actually get paid for being a subscriber. But you have write something first. (there is always a catch).
Some of the issues with subscriptions, can be (will be), turnover of subscribers, a lot of this has to do with the cost.
I have one or two that cost about $2 a month. I may not always read every issue, but that amount is not enough for me to go and cancel my subscription.
A $50 a month or year may be different. With these you have to constantly put out quality, helpful content to keep the subscriber informed.
It only takes one bad issue to lose a few subscribers. Two bad issues and they might all be gone.
Much like the brick and mortar retail. Retailers get products from a third party and sell them under their brand name. Everything regarding the product or goods is under the retailer’s control.
This covers the product’s specifications, packaging, and everything else. Commonly associated with dropshipping, this is simply the online version of the retail model.
This is common on Amazon, E-Bay, and to a lesser extent on others such as WooCommerce, or Shopify. But it is more common on Amazon.
There are courses, on how to set up a private label business on Amazon. Usually these courses include White Labeling which is closely related. To see an example of what is involved in a course, click Here.
White Label Goods.
Common in the Health and Wellness niche. Again this is much like the brick and mortar retail model. You select a product already being manufactured and sold effectively by other business’s, but has white-label alternatives, create your box and label, and sell the product.
This is very common with MLM’s (multi level marketers), and is utilized by online business’s as well. These can be dropshipped.
The way this is normally done, is a manufacturer will require you to buy a certain amount of their product or formula. They will make it, package it using your labeling, and ship it for you, or to you.
There are various alternatives you can sell your product. Like the Private Label model sell on Amazon, E-Bay as well as your website, or brick and mortar store.
Even sell it from your home.
As you can see, there is lots of opportunity to create a lifestyle business.
Still, regardless of which ever one you decide to try, you need a proper course of action.
Income models can be hard to define, but work your plan and your plan will work for you.
In all seriousness, the E-Commerce website revenue type you choose will be a pivotal choice, that will be reliant on your ability to be consistent and follow a marketable strategy, so pick cautiously.
Thanks for reading
’til next time
3 thoughts on “Creating a Lifestyle Business. 13 E-Commerce Revenue Models Reviewed.”
I do actually have a few articles on affiliate marketing. You can see some here. .
One I would recommend for those just starting out, would be, perhaps this one.
Most of the ones I have covered are free, or cost very little to start anyway.
What I have noticed is many people will sign up for 2, and use that free try out period to make their own evaluation.
The great majority though, don’t do anything with either of them. Which is a shame because affiliate marketing does offer some great benefits.
I’m not familiar with the eCommerce business models, but it seems to be gaining much ground yearly.
But, of course, I have heard of B2B and B2C, but not detailed information like this.
I prefer flexibility in a business, and that’s why I like affiliate marketing.
I will like to know more about this model.
Do you have any articles where I can find more information?
And Is it recommended for beginners?
I have been reading a lot about how to get started in e-commerce. But up until this point I had not considered all the models I could choose. I like the business to business path. but I think I will start with the business to consumer just because the audience is much more broader.