The Different Types of Online Stores

What Is It?

Leverage an online store to sell your products or products another company makes. These are great when you want to reach a wider market for the products you are selling. The key is finding out which of the different types of online stores is right for you.

How Does It Work?

Selling things through an online store has gotten a lot more easier over the last ten years. Now there are many different types of online stores to sell goods, whether ones you make or products you resell. Each one can work significantly differently. This article will focus on a quick summary of each and then subsequent articles will go into depth with each one.

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The primary differences center around who manages and markets the online store, who manages the inventory and who manages shipping and returns. Those three key points feed into the costs, efforts and complexity of your store.

Option 1 – You Run Everything

By using a product like Shopify, you can relatively quickly setup your store and be ready to sell products (including with payment processing). You are in charge of everything and Shopify just enables you to do it with their marketplace.

Option 2 – You Run Store And 100% Outsource Inventory & Shipping

Called dropshipping, this option has you setting up your own store selling products another company makes, exactly similar to Option 1. You carry no inventory and instead when someone orders something you (behind the scenes) submit the order with the supplier and they take care of shipping it directly to the client.

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Option 3 – You Use Existing Marketplace But In Charge Of Inventory & Shipping

In this case you post your products on existing marketplaces like Etsy, Amazon or Ebay. When someone orders it you take care of shipping to the customer. This is called Fulfilled By Merchant.

Option 4 – You Run Store But Shipped By Amazon

When you have your own store and a large number of sales, sometimes it is best just to outsource the delivery to Amazon due to their low cost and fast delivery time. You ship the goods to Amazon’s warehouses and when order comes in they deliver it. This is called Fulfilled By Amazon.

Option 5 – You Post Goods On Amazon’s Site And Shipped By Amazon

This is similar to Option 4 but in this case you use Amazon’s site as your store.

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How Much Money Can You Make?

In subsequent articles that talk about the different approaches we will talk about how much money you can make. Each way provides different challenges and fees.

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Categories: Long Term Payoff, Passive Income

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