Define Your Business Model

Define Your Business Model

There are two completely different Business Models: Business-To-Business (b2b) and Business-to-Consumer (b2c)

Business To Business (b2b)

Wholesale / Distributor Model.

This is where you sell to other businesses (other retailers like Amazon, Target, Sephoria, etc) or distributors that in turn sell your products to other businesses.

Your per unit profits are lower but over all profit dollars are theoretically higher because you make it up in higher volumes sold. Compared to retail profit margins, you get anywhere from 50% to 30% of the profit you get from the retail margin.

You will not have as much connection to the actual consumer so starting out this will be more difficult to build your brand.  So your marketing is critical that you reeach your target customer and let them know where your product is available at.


Business To Customer (b2c)

Retail Model.

Basically this is where you are selling directly to your customer, whether online or in your physical store.  You have the potential of the most interaction with your customer and have the highest.

The drawback for starting businesses/brands is that you are unknown resulting in few actual customers and potential customers that will consider your products.  Your marketing focus when starting is brand exposure (getting the word out). 


Fallacy Of Dropshipping

The biggest risk in dropshipping is unreliable shipping partners. ... When a customer orders a product, the dropshipper places an order for the exact same item from a dropshipping supplier. The supplier ships the order directly to the customer, without the dropshipper ever seeing or touching the product.


Difference Between White Label And Private Label

Private label is a brand sold exclusively in one retailer, for example, Equate (WalMart). White label is a generic product, which is sold to multiple retailers like generic ibuprofen (Advil).”

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