Understanding the Different Types of Ecommerce
Understanding the Different Types of Ecommerce Businesses
Classifying ecommerce businesses is tricky. We run the risk of turning it into an inconsequential exercise, or we could end up splitting hair. To grasp a deeper understanding of ecommerce concepts, it is important to ascertain the basis and purpose of classifying ecommerce businesses into types.
The two parameters of classifying ecommerce businesses that make the most sense are:
- type of goods sold
- nature of participants
Classifying Ecommerce Business Based on Type of Goods Sold
Ecommerce businesses sell:
- Physical goods, e.g., books, gadgets, furniture, appliances, and the like
- Digital goods, e.g., software, ebooks, music, text, images, video and the like
- Services, e.g., tickets, insurance, and the like.
The reason such classification is important is that it gives the analyst an insight into the business model and financial model of the business. For instance, the logistics of delivering the physical goods can be a huge challenge for some businesses.
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