The E-Commerce Platforms have changed the way we shop to a greater extent. You can easily get a product, difficult to find in your nearby market at lower rates on them. And the best part is they deliver to your home! However, you might be wondering How do E-commerce Companies like Flipkart, Amazon, and Make Money?
How Do E-Commerce Companies like Flipkart, Amazon and Make Money?
This question is obvious since we know that the goods delivered are at comparatively lower rates! Here we are unveiling the secrets of the E-Commerce Companies!
1. Through the Commission!
The main source of income for these E-Commerce Companies is the commission they get from the sellers. Since they are providing a platform as well as logistics facilities to the sellers, they charge anywhere between 20% to 40% commission from these sellers.
Sellers, on the other hand, are able to sell in bulk. Hence, they are able to meet their expenses, get recognition and also make sufficient amount of profit. Apart from that, they wouldn’t require to spend on retail stores. This, in turn, will save on their operational cost.
2. By providing a platform to small manufacturers
Since many manufacturers sell their products on these websites, these websites are helpful to them in getting recognition. E-Commerce websites provide advertising and promotional assistance to them! Hence, this is another source of income for these E-Commerce Companies.
3. Warehouses for Faster Deliveries!
It is a competitive era. Every company wishes to cater to services at a lightning speed. Hence, e-commerce companies also held inventory of millions of products and intended to make profits over economies of scale and world dominance!
The warehouse and use of technology is an essential parameter in the success of E-commerce companies. It is all digital, therefore more you adhere to them, more you have to compromise on your profitability!
4. The E-Commerce Companies also cater to C2C (Customer to Customer) Segment!
We are already familiar with eBay and OLX of the world. These E-Commerce Platforms allow a customer to resell their goods to another customer. There are various instances when we don’t require any product. However, it is possible that someone might be dying to have that same product. iPhones, Smartphone, Iron, Washing Machine, etc. are some just some examples!
The E-Commerce companies are helping to connect such buyers and sellers. They earn a commission when someone buys or sells through their platform. Apart from that, these platforms also run advertisements for desperate sellers. Which is their secondary source of income!
5. Payment Services!
One main issue which arose with the advent of E-Commerce is the payment option. There were many instances where the payment was delayed or not made by the buyer. This is where the payment services come into the picture.
Through the payment services, the buyer can pay the amount in advance in case the seller demands it prior to the shipping. In case the seller doesn’t ship the product, the money will be credited back to the buyer. Therefore, it is a win-win situation for both parties.
6. Selling Services!
There are certain services we require in life on day to day basis. Activities like watching movies, traveling through Plane, Train or Bus, or to another city. Earlier, the practice was to book all the tickets and bookings in person. Due to this, there used to be a lot of hassle in case the bookings aren’t available.
However, e-commerce companies have simplified these activities for us! These companies are aggregating these service providers. Therefore, on a single screen, you can avail all the bookings and ensure that you watch movie or travel across the globe with a free mind.
Apart from that, if you are new to any place, you can easily locate necessary service providers through the websites. They facilitate all the necessary information on your fingertip.
The service providers get money, buyers get service and these companies get their commission!
7. Establishing Mutual Agreements between people!
Who doesn’t needs an extra source of income? Uber and Airbnb have made it easier for people to earn extra income through these e-commerce platforms! In such cases, both the buyers as well as sellers can meet their expenses and save a decent amount of money.
Whereas, on the other hand, there is a good commission these companies are getting!
8. Hiring and Learning Portals!
There are certain portals which allow the companies to hire talent! On the other hand, people can create their profiles as a job seeker as well as freelancer, so that companies can view their work and contact them. Besides that, these portals also have inbuilt training courses.
Thus, if they wish to develop their skill, it can be done through the portal itself. LinkedIn is a perfect example!
We hope that this article was insightful enough to give you a better idea on How the E-commerce companies make money!