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How do Top E-commerce Companies Make Money?

Everywhere in the world, e-commerce companies have its own respect. E-commerce is totally new business channel. You need to invest no small amount of time, energy or effort into developing this new channel. You must have heard about e-commerce news like:    E-commerce industry commands the most extreme valuation.      E-commerce companies are leading rapidly.   Amazon, […]

Everywhere in the world, e-commerce companies have its own respect. E-commerce is totally new business channel. You need to invest no small amount of time, energy or effort into developing this new channel.

You must have heard about e-commerce news like:

  •    E-commerce industry commands the most extreme valuation.  
  •    E-commerce companies are leading rapidly.
  •   Amazon, Flipkart, e-Bay, and Snapdeal are focusing on developing high-end logistics platform.

 
Branding-Your-E-commerce-Industry
 

Increasingly popularity of online shopping portals has resulted in newer business strategies. Undoubtedly, e-commerce companies are making lots of money. But how they do? What are their strategies? What kind of expectations they have?

How do Companies like Flipkart, Amazon, and Snapdeal Make Money?

There are several ways of making money.

1: Fixed Price:  This is the main strategy of many e-commerce companies, they never negotiate with the price of the product. You might have noticed that most of the products on the e-commerce websites are rated as 999, 499 and such like those. This is their strategy only, to gain maximum profit. They deal with a fixed monthly subscription paid by the registered sellers to host their products on the platform.



Fixed-Price-Items

2: Commission: Depending on product quality, the company charges commission. The company charges the registered seller a certain percentage commission on the value of the sold products. This commission could be in the range of 5-8%.

3: Own Service: Many of the companies have their own shipping services like Flipkart has Ekart, Amazon has ATS etc. They charge fees based upon the weights and item price. That fee is again deducted from the transaction amount before giving it to the seller. As an example, many of them are charging 50 Rs for anything less than half a kg.

4: Late fees: If any seller misses shipping deadline or something similar to these charges.  

5: Focus on People need: This is the main strategy of e-commerce companies that they keep eyes on each and every activity of their customers. They mostly attract viewer’s attraction in the festivals by giving numbers of trendy products and items.

The main source of making money is by online business

People are no longer conservative when purchasing an item on the internet. It has been seen from last few years, business transactions over the internet are growing faster than ever. Most of the people are very much reliable to e-commerce websites.

E-commerce is completely a trendy business channel. It’s not simply an electronic brochure of your company or a simple marketing function. For the entire online buying process to go through, you need to focus on each and every part of accounting, purchasing, shipping, inventory, customer service and others.

How do registered sellers Get Compensated?

At the end of every month, the registered seller is ending a debit note to the online retailer which is titled something like “discounted funding bill”. This particular note mentions the amount of cumulative discounts at which the registered seller supplied products.



e-commerce-websites

Wrapping words

I guess, everyone of you is very well experienced with e-commerce. These days people are less existed physically but much on the web. The recent analysis has proved that e-commerce companies make a lot of money these days. The above-mentioned points have described how these companies are making a lot of money.

Please leave your queries and comments under the box.

 

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Written by Komal

Hello,I'm Komal, a desirous digital marketer. Currently serving in a digital marketing firm specialized in content writing and SEO activities. I enjoy exploring technical traits used in digital marketing.

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