What is a Business model – Startup's Dictionary

Explain how your business plans to make sales and generate profit.

Exploring Different Value Delivery Models for Your Online Business:

Once you have listed out the products you wish to sell. The next step is how to procure those products.
There are different business models you can follow.

Let’s understand the different types of Value delivery models for your online business.
These models define how businesses conduct their operations and deliver value to their beloved customers and clients.
Imagine a value delivery method as the secret recipe for creating a product that brings maximum value to those who use it.
You might be operating with either one of these or using a mixture of these models to maximize your value delivery.

In this model, businesses create their products from scratch.
They use raw materials or assemble pre-made components to craft something truly special.
Think of clothing brands that design and manufacture their products in-house or cosmetic brands that create their formulations and perform batch production.
Most of the handmade businesses fall into this category.

In this model, you partner with a third-party manufacturer who produces products specifically for your brand.
You get to call the shots, from the product packaging to the specifications.
It’s like having your very own line of products without the hassle of manufacturing them yourself.
A private label product is one where a business gets its products produced by a third party but they sell it using their brand name.
An example would be: Let’s say you want to sell lipgloss and you find a supplier who can make these for you and even add your brand name on them.
This is how most of the online brands out there are running. They have a design and get it made by a third party. A fully finished product is delivered to your business to sell.
As for the consumers, they’re the company’s ‘own brand’ products

Imagine this: You want to sell a fantastic product under your brand name, but you don’t have the means to create it from scratch.
That’s where white labeling comes in.
With this model, you work with a supplier or manufacturer who creates the product for you, and you sell it as your own.
It’s like having a trusted partner who handles the manufacturing while you focus on building your brand.
This is also one of the cost-effective options.
White labeling is when a business brand sells a product under its name and logo, but it is manufactured or purchased from a third party.
You procure your products from a supplier or manufacturer and sell them as your own. This can minimize your manufacturing cost. Also, this is a very popular choice in industries such as fashion and cosmetics.
Most businesses online operate on this model. They source their products from a wholesale supplier or manufacturer for a very low price and add a markup to sell.

Imagine running an online store without the hassle of managing inventory or shipping products. That’s what dropshipping is all about.
In this model, you act as the middle person between buyers and manufacturers.
When someone places an order on your website, the manufacturer or supplier takes care of fulfilling it on your behalf.
Your job is to focus on marketing and driving traffic to your website. It’s a hands-off approach to running an online business.
Typically, dropshipping owners only need to have a functioning website and relevant traffic.
They market their brand and when someone places an order they are fulfilled by a third-party supplier. This means you run the business without storing an inventory.

Private label vs white label vs Manufacture vs Dropshipping

Manufacture	Private label	White label	Dropshipping
Make your products. Make everything from start to finish from scratch.	You get to custom-make your products from another manufacturer	Choose from a variety of products from the supplier and sell them as your own	Choose from a variety of products from the source and sell them as a middleman.
One of a kind.	One-of-a-kind products.	Selling similar products. Same as many other businesses	selling similar products. Same as many other businesses
The setup cost is high	and Can be expensive. MOQ is high	Can be affordable. MOQ is fairly low	No setup cost. No inventory storage.

Related Posts