You have a lot of choices to make when starting a business. In addition to deciding what products to sell and how to economy them, one of your biggest questions to respond is: What operating schedule will be best to pursue?

There’s not one correct respond to that question—there are pros and cons to each operating schedule. Depending on your product, economy, and expense structure, one type may be more suitable for your business than the others.

Ahead, get a high-level breakdown of those many different operating schedule options. Once you comprehend each type of operating schedule, you’ll be able to make the most informed selection about how to structure your tiny business. 

Ready to commence your business? make your website today or discover more about Shopify’s tools for selling online and in person.

What is abusiness model?

A operating schedule is a corporation’s core framework for operating profitably and providing worth for customers. Features of an effective operating schedule explain a business’s worth proposition and pricing schedule. The model also identifies the products and services a corporation offers, informs its target economy, and predicts upcoming outgoings.

Why are business models significant?

Business models are essential for both recent and established businesses. A successful operating schedule helps companies comprehend their customers, motivates employees with a obvious path, attracts investors, and provides a sustainable competitive advantage by identifying growth opportunities.

ponder of your operating schedule as a live property for your corporation. It’s well to update it regularly to remain on top of upcoming trends and obstacles. If you’re planning to raise pool or associate with someone, energetic operating schedule innovation shows stakeholders you can adjust and meet changing economy demands.

5 main types of business models

There are five main operating schedule types:

1. Business to customer (B2C)
2. Direct to customer (DTC)
3. Business to business (B2B)
4. customer to customer (C2C)
5. customer to business (C2B)

1. Business to customer (B2C)

The business-to-customer (B2C) operating schedule refers to commerce between a business and an person customer. For example, ponder of the last period you bought something from Target—that’s an example of a B2C deal. B2C business can include ecommerce, brick-and-mortar stores, or a combination of both.

2. Direct to customer (DTC)

Often conflated with B2C, the direct-to-customer (DTC) operating schedule has a key difference: Whereas the B2C model can typically describe retailers that sell to consumers, the DTC model describes person brands or manufacturers that sell to consumers. For an example of this distinction, let’s look at the inclusive apparel brand TomboyX: You could purchase TomboyX products from Target (B2C), or you could purchase TomboyX products from its Shopify website (DTC). Particularly popular as an ecommerce operating schedule, DTC businesses rose during the pandemic and continue to be a powerful slice of the ecommerce economy. 

💡Many people actually consider DTC to be a subcategory of B2C. As it’s a relatively newer term, we’ll leave into the pros and cons of selling under a DTC operating schedule later in this navigator. 

3. Business to business (B2B)

Business to business (B2B) refers to any commerce between two businesses. Wholesale transactions typically fall under this category. You can include business-to-business offerings as either an ecommerce business or a brick-and-mortar. It’s also ordinary for businesses to serve audiences in both B2C and B2B models. For instance, a coffee brand can sell its beans to consumers on its website (B2C), while also selling beans in bulk to coffee shops (B2B).

4. customer to customer (C2C)

The customer-to-customer (C2C), or peer-to-peer, operating schedule is when a customer sells a product or service to another customer. For instance, selling a used laptop on Facebook Marketplace falls under this category. person sellers often commence selling on online marketplaces, then commence an online store to construct a brand and capture more profits.

5. customer to business (C2B)

The rise in the creator economy led to a spike in customer-to-business (C2B) companies. This operating schedule refers to when a customer sells their own products or services to a business or organization. If you desire to become an influencer who partners with brands or a photographer who sells photos online, C2B is the type of operating schedule you’d use.

19 examples of business models

Within those five types of business models, there are many different operating schedule subcategories. Below, we’ve outlined 19 examples of business models you can use as encouragement to commence your own business.

1. Ecommerce operating schedule

The ecommerce operating schedule is one of the most accessible and versatile. It involves selling products or services online through a digital storefront. That could cruel selling through an online marketplace (like Etsy or Amazon), social media platforms (like Instagram or TikTok), a dedicated ecommerce website, or a combination of other sales channels. Brands that utilize the ecommerce operating schedule can range from a tiny, niche store selling handmade products to a global marketplace offering thousands of items. Ecommerce businesses most commonly operate as B2C, B2B, or DTC, depending on the target spectators and business goals.

Pros of ecommerce operating schedule

• Broad spectators reach. Online stores aren’t limited by geography, allowing businesses to reach customers worldwide.
• Lower upfront costs. Compared to physical retail, ecommerce eliminates the require for leasing retail space, which cuts down on recent business outgoings.
• Scalability. With the correct tools and platforms, ecommerce businesses can develop quickly and handle increasing volumes with ease.

Cons of ecommerce operating schedule

• Highly competitive. The online space is saturated, making it challenging to stand out and acquire customers.
• Reliance on technology. Ecommerce businesses are dependent on functioning websites and digital tools, which can fall short or require costly updates.
• Logistics challenges. Shipping, returns, and inventory management require careful planning and resources.

An ecommerce achievement narrative

SilkSilky specializes in selling silk products with the imagination that the upcoming of fashion will be well and comfortable. Founded in April 2021, the brand launched with Shopify to establish an independent, branded DTC site. An upgrade to Shopify Plus allowed the brand to tap into even more powerful tools—a multi-site layout to drive international expansion and advanced customization features. This shift drove a 680% boost in SilkSilky sales over two years.

2. Retail operating schedule

Retail is when you sell products made by a variety of brands directly to consumers in a B2C operating schedule. This could include a combination of sourcing products through wholesale suppliers, manufacturing your own products, and even developing a private label product line (ponder: Costco’s Kirkland brand). Retail businesses can be based in traditional brick-and-mortar stores,through temporary retail activations like pop-up shops, or online through websites and ecommerce marketplaces. 

Some retail may also function as a B2B operating schedule. Wholesale transactions qualify as such, as well as selling any products to businesses. If you sell office furniture, for example, it’s sensible to model your retail store as both B2C and B2B to broaden your spectators.

Pros of retail operating schedule

• Make powerful customer connections. For physical retail locations, you get the chance to interact with customers face to face, offering distinctive opportunities to make and nurture relationships.
• Boost sales. Online-only merchants have to reach customers digitally. Physical retail gives you the chance to reach in-store shoppers while also driving online sales to your website. Plus, people get deeper engagement with your products in store versus only looking at pictures online.
• No shipping hassles. When you sell in person, you don’t have to worry about fulfilling orders and all that comes with it—the costs, admin period, and potential for costly returns.

Cons of retail operating schedule

• High overhead. Opening a physical retail store has tons of upfront costs, not to mention ongoing operating outgoings.
• Inflexibility. While an online store offers you the alternative to make tweaks and adjustments with just a few clicks, such overhauls to your physical retail space require more attempt.
• More things to manage. Running an online business is busy enough without the added stress of managing a physical storefront. When you have a retail shop, you’ll require to remain on top of more things than if you were online-only.

A retail achievement narrative

The luxury floral brand famous for its Eternity® flowers, Venus et Fleur, got its commence online in 2015. It used Shopify’s platform to back its expansion from ecommerce to physical retail, allowing the brand to tackle recent challenges in managing multiple sales channels and store locations. The brand expects to double down on its retail achievement, with upcoming plans to propose buy online, pickup in-store (BOPIS) functionality. 

3. Dropshipping operating schedule

Dropshipping attracts people who prefer to keep recent business costs as low as feasible and are less concerned about margins. It’s also a great operating schedule for someone who doesn’t desire to hold and manage inventory. Dropshipping involves B2C commerce (when a customer buys a product from your store) as well as B2B commerce (the amount you pay for the dropshipper to provide the product and fulfillment services on your behalf).

Pros of dropshipping operating schedule

• Low recent business expense. Because you’re never carrying inventory, you have no inventory costs—which generally are the most substantial outlay for a recent ecommerce business.
• Low uncertainty. Since you don’t actually purchase your inventory upfront, you aren’t taking the uncertainty of holding items you can’t sell.
• Streamlined sales. Dropshipping suppliers will receive on the tasks of picking, packing, and shipping your product for you. This alternative provides convenience and efficiency, so you can manage your business from anywhere in the globe.

Cons of dropshipping operating schedule

• High competition. Because dropshipping has such low barriers to entry, a lot of people are doing it. Competition is stiff, and it’s challenging to set yourself apart from the throng.
• Low margins. Low margins make it challenging to compete in paid advertising space, which means you’ll have to depend more on organic tactics like content marketing. You also have to sell at significant volume to make a decent gain.
• Inventory syncing issues. Because you’re relying on someone else’s inventory, there may be times when you place a shipment request to the wholesaler but the dropshipping product is sold out. These delays due to back orders can reflect badly on your business.

A dropshipping achievement narrative

Subtle Asian Treats is a top dropshipping business on Shopify selling plushies and cases for AirPods and iPhones. It was founded by Tze Hing Chan, a youthful Malaysian commence-up founder, who aimed to jump on the bubble tea pattern happening in Asia. 

The brand attracted thousands of bubble tea fans from the area by giving people a distinctive selection of products at a fair worth. It’s also done a great job of building awareness on social media via user-generated content (UGC), and it appeals to customers with any distribution through product variety.

4. Manufacturing operating schedule

Manufacturing your product makes the most sense for entrepreneurs with a distinctive concept or a variation on an existing concept for a B2C or B2B operating schedule. It’s also suitable for those who’ve already validated the economy for their product. 

You can look at manufacturing through a few lenses:

1. Private label. A private label product is created by a third-event manufacturer and sold under your own business’s name. As the business owner, you control everything about the private label product, including what goes in the product, how it’s packaged, and what the labels look like. Private label manufacturing is best for brands that desire to make distinctive products but don’t have the resources to do it themselves.

1. White label. A white label product is created by one manufacturer and sold to various retailers to sell under their own brand names. They tend to be generic products that you can sell to wider customer segments.

1. DIY makers. Manufacturing can also include makers—entrepreneurs who sell handmade products. This is when you literally receive production into your own hands. DIY (do-it-yourself) manufacturing allows for precise control over standard and your brand, but it does arrive at the expense of personal limitations, period, and scalability.

Manufacturing is best for the do-it-yourselfer—someone who has their own distinctive ideas, can physically produce the goods themselves, and has the skills and resources to do so. But the most significant thing to note here is not all products can be made by hand. Your product choices are limited to your skills and available resources.

Pros of manufacturing operating schedule

• Lowest expense per unit. Manufacturing often garners the lowest expense per unit, giving you the greatest margins on your product.
• More control. You can construct your own brand, set your own prices, and control the standard of your final outcome without any constraints.
• Agility. Making your own products can provide you the greatest level of agility for your business. You can adjust standard, features, and even the entire product on the fly.

Cons of manufacturing operating schedule

• Minimum order quantities (MOQs). The recent business costs for initial orders can be quite high. Depending on the MOQs, the costs of your product, and your selection in manufacturer, your initial inventory pool can be thousands or tens of thousands of dollars.
• The perils of outsourcing. Trusting external parties puts you at uncertainty to a lot of challenges outside of your control. Nothing will bring your business to a halt like being scammed by an overseas manufacturer.
• Upfront pool. Both routes require period and money to get up and running. Manufacturing can be a long procedure of prototyping, sampling, refining, and production. And the primary costs associated with making your own products include the purchasing of raw materials, the storage of inventory, and labor costs.
• period-consuming. Depending on your product selection, making your own products can be a period-consuming procedure, leaving you with less period to focus on actually building your business.

A manufacturing achievement narrative

ancient globe Kitchen began as a household-owned business selling products door-to-door in its local area. It’s since gone through a period of growth, in which the best shift for getting the business online was to sell on Etsy.

The brand, which specializes in handcrafted kitchen utensils, wanted to expand further, but to do that, it needed packed control over pricing, branding, and standard control—things Etsy couldn’t propose.

After moving from Etsy to Shopify, ancient globe Kitchen saw a sharp boost in online conversions. It was also able to associate with relevant brands and boost its prices, all while staying factual to selling goods made by hand.

5. Wholesale operating schedule

Purchasing products wholesale is a excellent alternative if you desire to get up and running quickly or if you desire to sell a variety of products and brands. Wholesaling provides a wide range of opportunities, as there are many different types of products in demand through the B2B wholesale operating schedule. 

Pros of wholesale operating schedule

• Selling established products. Buying and selling wholesale is typically lower uncertainty. You’re dealing with brands that are already validated on the economy, so you don’t run the uncertainty of wasting period and money developing a product no one wants.
• Brand familiarity. Selling already established brands can assist position your business by creating an aura result around your own brand.

Cons of wholesale operating schedule

• Product differentiation. Selling already established products can work for you as well as against you. Because the products are available from multiple wholesale suppliers, you’ll require to fight extra challenging to differentiate yourself and convince potential buyers to purchase from you.
• worth control. Selling other brands means to some extent you have to play by their rules. Some brands will enforce worth controls to prevent you from discounting their products.
• Inventory management. When purchasing wholesale you will likely have to purchase a minimum order of each product. The minimum order will depend on the product and manufacturer. However, you will have to stake and hold inventory as well as manage that inventory for re-order.
• Dealing with supply partners. If you’re carrying an array of products, dealing with multiple supply partners can become challenging to manage. Requirements may vary from supplier to supplier.

The wholesale operating schedule might be considered a secure middle ground between manufacturing and dropshipping. Although each case is distinctive, it’s typical to view a 50% spread on wholesale goods resold at retail pricing.

A wholesale achievement narrative

Pernell Cezar Jr. and Rod Johnson founded BLK & Bold with the objective of helping local communities through selling coffee. The corporation pledges 5% of all profits to programs that assist youth programs, enhance workforce advancement, and eliminate youth homelessness.

BLK & Bold leverages wholesale and DTC channels to drive sales. The majority of its wholesale partners include coffee shops, restaurants, offices and coworking spaces, and hospitality providers such as boutique hotels, Airbnbs, and classic bed and breakfasts. 

6. Print-on-demand operating schedule

Print on demand (POD) is a mostly hands-off way to sell made-to-order products that characteristic your designs. This is ordinary for B2C businesses, but it also works for B2B (ponder: client gifts, conference swag bags, and the like). For print on demand, you simply make the design, mock it up through a POD associate, and list it wherever you sell online. When a customer orders a product with your design, your chosen third-event printing service creates, packs, and ships the order.

Much like with the dropshipping model, the print-on-demand model reduces the expense of entry into selling online. You don’t have to pay for a product until you make the sale, so there’s little upfront pool. Plus, everything from printing to packing to shipping is handled by your printing associate.

Print on demand is a particularly great operating schedule for creatives. You can sell popular POD products like:

• Duffle bags
• Yoga leggings
• Face masks
• Watch bands
• Canvas prints and posters
• Throw pillows
• Blankets

On-demand products typically profit thinner gain margins, depending on your pricing schedule and customer purchase costs. But it’s a excellent low-uncertainty operating schedule for those recent to ecommerce or who desire to test different turnover streams for their existing business.

Pros of POD operating schedule

• Develop and list products quickly. Once you make the design, you can mock up the product and sell it in your online store in minutes.
• Automated shipping. Shipping and fulfillment is handled by your supplier. After you make the sale, you’re responsible only for providing great customer service.
• Lower upfront expense. Since you don’t hold any inventory, it’s straightforward to add and remove products, test recent business ideas, and make products for niche markets.

Cons of POD operating schedule

• Less control over shipping. Shipping costs can get complicated, as they often vary for different products. Your options also may be limited if you desire to make a standout unboxing encounter.
• Limited customization. What you can customize depends on the vendor and the product. You’ll have to determine base costs, printing techniques, and available sizes when deciding which products to customize.

A POD achievement narrative

Fanjoy is an online marketplace selling curated print-on-demand products from a variety of artists and creators. CEO Chris Vaccarino started the corporation in 2014 after realizing the chance through his experiences selling merch on the road with his brother’s band.

Now, Fanjoy is a thriving marketplace that connects creators with tools they require to be successful entrepreneurs—and customers ready to buy their designs. To date, it has shipped more than three million packages.

7. Direct to customer operating schedule

As touched on above, the direct-to-customer (D2C or DTC) operating schedule refers to brands that sell products directly to consumers, without intermediaries like wholesalers or third-event retailers like Amazon. 

ponder about some of the biggest trending brands: Warby Parker, Barkbox, Bonobos, Casper. What do they all have in ordinary? A DTC operating schedule. Even major brands like Apple and Tesla are leveraging mobile commerce as a main channel for DTC sales.

These DTC brands eliminate the hassle of researching and choosing from hundreds of competing retailers, making the entire shopping encounter easier for customers.

Pros of DTC operating schedule

• Own the customer connection. Selling directly helps you nurture more relationships and boost customer lifetime worth.
• Collect customer data. Selling direct lets you collect first-event data you can use to personalize customer communications and experiences. 
• Higher profits. You don’t have to distribute profits with any third-event distributors.
• Get feedback faster. Since you can communicate with customers directly, you can easily collect feedback to enhance your products and customer encounter.

Cons of DTC operating schedule

• Costs of direct distribution. There’s no sharing of shipping or storage costs. DTC businesses require to invest more upfront to get their business operating smoothly.
• No built-in spectators. One advantage of working with retailers is that customers can more easily discover your products. If you’re a recent brand, you’ll have to economy yourself to construct an spectators. You also don’t advantage from the distributor’s encounter or salesforce.

While it may receive period and money to establish reliable distribution channels, selling direct is a intelligent operating schedule for building a faithful customer base and improving profitability over period.

A DTC achievement narrative

Handcrafted leather shoes and “Made in Italy” leave hand in hand. Consumers who wear this type of footwear have traditionally accepted its high worth tag—thanks to an industry flooded with distributors, agents, resellers, and retailers.

But then in 2013, Velasca, a Milanese footwear recent business, stepped into the scene with a objective to disrupt the industry by connecting consumers directly to shoemakers. Velasca was born out of a casual exchange between co-founders Enrico Casati and Jacopo Sebastio in the back of a taxi. It has since grown into a blossoming DTC brand, selling hundreds of thousands of shoes in over 30 countries.

8. Subscription operating schedule

A subscription business model charges customers a recurring fee—usually monthly or yearly—to access a product or service. Subscription models assist businesses capitalize on ongoing customer relationships. If they continue to view the worth in your propose, they’ll continue to pay your fee.

It doesn’t matter if you’re an ecommerce business or online educator, you can commence a subscription business across many industries, including:

• Streaming services
• Monthly subscription boxes
• Membership communities
• Food services
• Digital content (e.g., newsletters, on-demand video)

A recurring turnover model can navigator to higher revenues and stronger customer relationships. Though a subscription membership, the longer customers use your product or service, the more valuable it becomes to them.

Pros of subscriptions operating schedule

• Predictable turnover. Monthly recurring turnover helps you projection sales, schedule inventory, and comprehend how much to reinvest for business growth.
• More money on hand. Receiving monthly payments upfront means more money flow (and piece of mind) for your recent business.
• faithful customers. Regular purchases provide you deeper insight into customer behavior, so you can continually enhance products and keep customers coming back for more.
• Easier cross-selling and upselling opportunities. The more customers use your products, the more depend you construct with them. This makes it easier to sell additional products to them, because they already recognize you provide worth. 

Cons of subscriptions operating schedule

• High uncertainty of churn. One drawback of the subscription operating schedule is churn. You have to constantly keep people interested and engaged for them to keep paying you.
• Varied products. Products become dull if they don’t transformation often. For example, Netflix adds and removes movies every month, and Trunk Club promises to invest in subscribers’ changing styles over period. You require to keep products fresh to maintain a subscription business. 
• tiny issues, large problems. Most subscription services provide their customers the same thing, at the same period, every month. While this seems straightforward, if there’s one tiny kink in your structure, it can turn into a large issue quick if you don’t schedule for it.

A subscription achievement narrative

Subscription businesses arrive in many forms. B2C ecommerce retailers can include a subscription model in their offering, similar to Clevr Blends, a popular online latte brand. The corporation, founded in California, has grown into a thriving business since its launch in 2016.

The brand offers a subscription alternative which gives discounts, early access to recent products, and a free scoop in every order.

9. Fee-for-service operating schedule

A fee-for-service business is also known as a service-based operating schedule. In other words, the merchant sells its services rather than selling products. This type of business is ordinary across all models, including B2C and DTC (like a hair salon), B2B (a corporate cleaning corporation), C2C (your neighbor’s kid shoveling your driveway), or C2B (that same kid shoveling for an office building).

The service industry is actually the fastest-growing sector in the US, according to the Bureau of Labor Statistics. And while this often indicates hourly workers, there’s plenty of chance for aspiring business owners to sell their period and expertise.

Pros of fee-for-service operating schedule

• Get paid for your period. While product-based businesses don’t always compensate you for your period, the opposite is generally factual for fee-for-service arrangements. You can fee hourly to ensure you’re getting paid for all your period spent working.
• Low recent business costs. Depending on the business you desire to commence, offering services comes with low recent business and overhead outgoings. Even if your aspiration is to open a dog grooming salon, you can commence tiny by offering dog-walking services and save up to invest in what you require to fully launch your imagination.

Cons of fee-for-service operating schedule

• Limited scalability. Because a service-based business requires your period, it’s challenging to scale on your own. The main ways to boost your income is to raise your rates or subcontract some of the work to lower-wage service providers. However, these both arrive with their own challenges—clients may not desire to pay more, and it takes a lot of period to discover and manage high-standard subcontractors.
• Justifying your period and rate. Many service-based businesses that fee hourly require to justify how much period a job takes to complete. Even if you’re not charging hourly, service-based businesses often face more pushback or negotiation from clients.

A fee-for-service achievement narrative

Many ecommerce businesses require photos edited to make their products shine on web pages. However, not everyone has the skills, period, or software needed to make edits like background removal and color changes. Path is a virtual photo editing studio that delivers those services to other businesses, operating on a B2B model.

Path is a throng of more than 300 editors and graphic designers who perform basic but essential photo edits. Rather than charging an hourly rate, Path applies a flat per-photo editing fee, depending on the complexity of the edits. It also offers faster turnaround times at an additional fee.

10. Freemium operating schedule

A freemium business is when a merchant offers both free and paid versions of its product or service. This is typically used for B2C or B2B businesses. Oftentimes, software companies and software-as-a-service (SaaS) businesses use this way.

The freemium operating schedule allows merchants to make relationships with recent customers easily, since there’s no expense or commitment to sign up and try it out. The way freemium businesses earn money is by getting these people to use and adore their platform so much that they desire access to additional features—features they have to pay for.

Pros of freemium operating schedule

• Easier customer purchase. Because there’s no uncertainty to try out your product or service, it can be relatively straightforward to convert recent customers. They don’t require to pay for anything, so it’s easier to convince them to sign up.
• More cross-selling and upselling opportunities. Even free users provide lots of insightful data you can use to your advantage when personalizing promotions and recommendations.

Cons of freemium operating schedule

• hardship to convert. Your free users may already be joyful with their encounter and have no profit in accessing additional features. It may be more challenging for them to justify the added outlay if they can have a similar, albeit somewhat downgraded, encounter for free.
• Higher uncertainty of churn. Subscriptions are susceptible to high churn rates—even more so if you propose a free alternative to your paid options.

A freemium achievement narrative

Spotify is one of the most high-profile freemium businesses. The music-streaming service operates on a subscription-based operating schedule. Users can subscribe to its free—or freemium—schedule, which exposes them to ads and limited features. However, paid plans eliminate ads and provide additional features such as offline listening, unlimited skips, and playlists.

11. Affiliate operating schedule

An affiliate operating schedule is when you earn a percentage or referral fee from an affiliated business in trade for driving customers to make a purchase from your affiliate associate. Affiliate marketing is often viewed as a C2C operating schedule, because affiliates are typically regular people who refer the products or services to other consumers.

There are many ways to use affiliates in a operating schedule. Your brand can also tap into the power of affiliate networks, recruiting a throng of brand spokespeople to promote on your behalf.

Pros of affiliate operating schedule

• Potential for inactive income. Whether you’re the affiliate or the brand, this offers a great chance for inactive promotion and income. As a brand, you have a network of people promoting on your behalf. As an affiliate, you can set up an optimized website with affiliate links, sit back, and watch it develop.
• chance for collaborations. As an affiliate, you can associate with a whole array of brands. This opens you up to recent opportunities and exposes you to things you may not have otherwise had access to.

Cons of affiliate operating schedule

• Low profits. Affiliates typically only earn a tiny percentage of the income generated from the referrals they send, so you require lots of referrals to convert if you desire any sizable payout.
• Requires a network. The most successful affiliates already have their own spectators or network. If you haven’t already established an spectators, you’ll require to invest in doing so.

An affiliate achievement narrative

QALO sells silicone engagement rings and wedding bands on its Shopify site. To spread the word in its early days, QALO launched an affiliate program, focusing primarily on online communities. “Creating affiliates through people that have organizations and followings online makes things a lot easier instead of having tangible people on the ground trying to shift your product around their gym or whatever it may be,” says co-founder KC Holiday.

These affiliate relationships were critical to the brand’s growth shortly after its 2013 launch, and it still has the affiliate program today.

12. Razor blade (and reverse) operating schedule

The razor blade strategy document is when you sell an affordable item upfront which then requires additional products and recurring upcoming products in order for that original product to remain in continued use. These supplemental purchases are priced with higher margins for the merchant, while the initial product may have been sold at a lower gain spread.

The name for this model comes from the truth that it’s most commonly used by razor blade companies. Razor blades may be inexpensive to buy at first, but things like replacement blades and other shaving supplies are not so affordable and thus earn these brands more turnover.

The reverse of the razor blade model is to switch it up: The initial purchase may have been a large pool, but you secure recurring turnover with supplemental products. For example, a corporation like Canopy follows this model: They sell a additional expense humidifier and diffuser at the outset, then retain customers through recurring accessories like essential oil refills. Although this model may not produce large margins, it keeps customers coming back and offers you opportunities to continue marketing to them.

Pros of razor blade operating schedule

• Drive repeat purchases. Due to the nature of this operating schedule, customers require to become repeat buyers. This is great for boosting customer loyalty and lifetime worth.
• Collect customer data. You have more touchpoints with customers, allowing you to collect more first-event data the more purchases they make. Businesses with their own customer data are empowered by these valuable insights without third-event limitations or restrictions.

Cons of razor blade operating schedule

• Potential for brand dilution. If you sell an inexpensive product upfront and then fee a lot for the required recurring purchases, customers may commence to question the standard of your products—and also the reliability of your brand.
• Susceptible to competition and disruption. Many businesses operating with this model aren’t pricing products because they have to worth them that way; they’re pricing strategically to manipulate perceived worth and inspire repeat purchases. As a outcome, this also leaves these businesses open to the threat of competition—it won’t be challenging for competitors to jump in with a more affordable or superior product.

A razor blade achievement narrative

Dollar Shave Club, one of the more well-known trailblazing DTC razor blade brands, tapped into this chance. It also leveraged the recurring turnover from subscriptions, with more than 100 million energetic subscribers to boot. 

13. Franchise operating schedule

A franchise is a business that uses franchisees to distribute its products and services. Essentially, the franchisor creates the brand and the product, and the franchisees can buy into the franchise and commence their own business under the same brand umbrella.

Franchises are B2C business models in the sense that the products and services are often sold directly to consumers (although some franchises operate on a B2B model as well). The connection between the franchisor and the franchisee also mirrors a B2B operating schedule.

Pros of franchising operating schedule

• Built-in brand awareness and back. Rather than starting a business, brand, and product from scratch, franchising allows a more approachable way to get into entrepreneurship. As a franchisee, you can receive advantage of brand awareness and existing resources to get you off the ground.
• Spread the word about your business. If you desire to become a franchisor and turn your existing business into a franchise, this offers a great way to expand your geographic footprint without having to physically do so yourself. This also offers you more in-depth local expertise in recent markets where your franchisees set up shop.

Cons of franchising operating schedule

• Limited flexibility. When opening a franchise business, you have limited control. You’ll have to adhere to the franchise requirements, including branding, pricing, product displays, customer service, and more.
• recent business costs can be high. It’s not free to become a franchisee. Most franchises require some sort of upfront pool or signup fee. These can be pretty hefty on top of the other recent business costs you’re already facing.

A franchising achievement narrative

Athletic and outdoor apparel brand Decathlon found achievement through franchising. The brand refers to its franchise opportunities as “partnerships.” This operating schedule has allowed the retailer to expand since first opening its doors in 1976. Now, its products are in some of the most recognizable large-box stores, like Target and Walmart.

14. Digital products operating schedule

A digital product is a nonphysical property or media type that can be sold and distributed online, repeatedly, without restocking inventory. These products often arrive in the form of downloadable, streamable, or transferrable digital files, such as MP3s, PDFs, videos, plug-ins, and templates.

The upfront costs of creating a digital product can be high, but the fluctuating expenses of selling them is comparatively low. Once you make an property, it’s incredibly cheap to deliver to customers.

Pros of digital products operating schedule

• Lower overhead costs. You don’t hold any inventory or run up any shipping charges.
• Scalability. Orders can be delivered instantly, letting you be hands-off with fulfillment. As the business grows, you can easily convert tasks into automation to free up period.
• Extensive product offerings. There are various routes you can receive: a freemium model where you provide products for free with upgradable features, monthly paid subscriptions for access to exclusive content, or licenses to use your digital products. You can construct a business solely around digital products or incorporate them into your existing business.

Cons of digital products operating schedule

• High competition. Unless you serve a pretty distinctive niche economy, people might be able to discover free alternatives to your digital products. You’ll have to consider the niche you target, provide superior products, and recognize how to construct your brand in order to achieve. It’s helpful to do a SWOT analysis of your competition to discover an edge.
• Piracy and theft. You’re at uncertainty of people stealing and reusing your products as their own.
• Selling restrictions. For example, you can only sell physical products through Facebook and Instagram according to their commerce policy.

A digital products achievement narrative

Online store Pixie Faire has tons of products for sale, but don’t expect any of them to arrive in a package. Instead, this Shopify merchant has gone all-in on digital products, selling downloadable patterns for doll clothes.

15. Brokerage operating schedule

A brokerage is a operating schedule in which the intermediary connects the customer to the product or service provider, acting as a liaison of sorts between the two. You often view brokerages in B2C and B2B business models, such as real estate or insurance brokerage, but not often in ecommerce.

Pros of brokerages operating schedule

• Simplify complicated transactions. Brokerages are often used in complicated transactions such as real estate. This is because they provide additional services that are typically required of such complicated purchases.
• borrowing brand awareness. Some brokerage firms are successful and have brand awareness in their own correct. Gaining representation by such a firm also grants you the benefits of being associated with that brand.

Cons of brokerages operating schedule

• Inflexibility. Much like with franchises, operating under a brokerage firm often requires you to pursue the firm’s policies and procedures. This can be frustrating for aspiring entrepreneurs with their own imagination.
• Fees and commissions. Because brokerages propose services and other advantages, they also receive a cut from your profits. This is often paid as a percentage of the deal worth in the form of a percentage.

A brokerage achievement narrative

The Oppenheim throng is a now-famous real estate brokerage firm with multiple offices and a huge throng of real estate agents. Founded in 1889, the firm has earned lots of recognition over the years and it now even has Netflix shows.

16. Bundling operating schedule

Bundling is a operating schedule where multiple products or services are sold together as a single package, often at a discounted worth. This model works well for businesses looking to boost the perceived worth of their offerings and boost average order worth. Bundling is ordinary in both B2C and B2B industries, from tech subscriptions to curated gift sets.

Pros of bundling operating schedule

• Increased sales. Bundles often inspire customers to buy more than they originally intended.
• Improved customer encounter. Offering complementary items together makes it easier for customers to discover what they require.
• Simplifies selection-making. Customers perceive bundles as a better deal, reducing friction in the buying procedure.

Cons of bundling 

• Lower margins. Discounted bundles can reduce gain margins if not carefully priced.
• Inventory risks. Bundling requires sufficient stake of all included products, which can make logistical challenges.
• Customer perception. If a bundle contains less desirable items, customers may feel the deal is not worth it. It may assist to propose customizable bundles wherever it makes sense.

A bundling achievement narrative

EasyStandard is a brand that offers long-lasting and comfortable wardrobe essentials built to perfectly fit all body types. After migrating to Shopify, it was able to introduce product bundles to its customers. This shift streamlined back-complete business operations and supported a 19% boost in conversion.

17. Marketplace operating schedule

A marketplace operating schedule connects buyers and sellers on a single platform, acting as an intermediary rather than a direct retailer. Well-known examples include Amazon, Etsy, and Airbnb. Marketplaces can operate across industries and back transactions in B2C, B2B, and even peer-to-peer (P2P) contexts, as in the case of Craigslist or Poshmark.

Pros of marketplace operating schedule

• Low inventory requirements. The platform doesn’t require to stake or produce items, lowering upfront costs.
• Scalable model. Adding recent sellers can expand the offerings without significant pool.
• Diverse turnover streams. Marketplaces can earn money through listing fees, commissions, or additional expense memberships.

Cons of marketplace operating schedule

• High competition. Marketplaces often compete with established platforms in their niche.
• complicated logistics. Managing disputes, ensuring standard, and handling payments can be challenging.
• Dependent on network effects. achievement relies on attracting both buyers and sellers, requiring significant marketing efforts.

A marketplace achievement narrative

Kick Game is a DTC brand that turned into a brick-and-mortar retailer that later grew into a global, multichannel marketplace. Shoppers can browse sneakers, socks, and related accessories from Kick Game itself as well as tons of select brands.

18. Reselling operating schedule

The reselling model involves purchasing products and then selling them at a gain. This is ordinary in the fashion, electronics, and collectibles industries and can receive place at physical stores, online shops, or platforms like eBay, ThredUp, or Poshmark.

Pros of reselling operating schedule

• straightforward recent business. There’s no require to make products, making it easier to launch a business.
• Flexibility. Reselling allows entrepreneurs to pivot quickly based on economy trends.
• Established demand. Selling recognizable brands or trending items can attract customers easily.

Cons of reselling operating schedule

• Thin margins. Resellers often face pricing constraints due to competition and economy saturation.
• Inventory risks. Holding unsold inventory ties up pool and increases budgetary uncertainty.
• Dependence on suppliers. Resellers depend on third parties for product availability and standard, which can be unpredictable.

A reselling achievement narrative

recent Jersey–based Shopify merchant Packer Shoes started as a tiny neighborhood custom shoe shop. It also resells sneakers from household name brands like Adidas, Asics, and Nike. 

19. Non-gain operating schedule

Non-gain organizations operate with the objective of serving a mission rather than generating profits. These businesses often focus on addressing social, environmental, or educational needs, and reinvest excess funds into furthering their factor. Non-profits can engage in product sales, donation collection, or service delivery.

Pros of non-gain operating schedule

• Mission-driven. Non-profits align with meaningful goals, which can attract passionate supporters and employees.
• levy benefits. Many governments propose levy exemptions to non-profits, reducing operating costs.
• Grants and donations. Non-profits can access capital through grants, donations, and sponsorships.

Cons of non-gain operating schedule

• capital dependency. Non-profits often depend heavily on external capital, which can be inconsistent.
• Regulatory requirements. Maintaining non-gain position involves adhering to strict rules and reporting standards.
• Limited scalability. Growth can be constrained by mission focus and capital limitations.

A non-gain achievement narrative

Sweden-based agood corporation designs and manufactures sustainable everyday products. It’s also a B Corp–certified corporation with a non-gain arm, agood Foundation. The brand uses Shopify Plus to manage its catalog of more than 20,000 products, all while dedicated to its mission in protecting the surroundings. 

How to select a operating schedule

Most products will fall into one of those core business models. Some businesses stick to one operating schedule while others use a combination of business models to execute their imagination. On the other hand, depending on your product or niche, you may not even have the alternative of which ecommerce operating schedule you choose; your product might naturally fit into one model and not any of the others. 

Whichever route you leave down, the operating schedule you use will also assist to define and shape your entire strategy document going forward. That might feel like a lot of pressure, but you have a few tools at your disposal that will assist you way the selection-making procedure more easily. Let’s leave over those approaches next. 

comprehend your spectators

Knowing who you desire to sell to is an significant first step of economy research. This tells you there’s enough people out there with the willingness to purchase your product, validating economy demand.

Beyond understanding the size of your spectators, you’ll also desire to look at their background and behaviors to comprehend what motivates their purchase behavior. You can later borrowing this information when devising strategies for pricing, product advancement, marketing, and advertising.

Identify the issue you’re solving

Once you’ve gotten to recognize your spectators, you should have a excellent grasp on their wants and needs. Dive deeper to look at the issue you’re solving. For example, if you sell jewelry, you may solve your customers’ pain points by selling high-standard earrings at affordable prices, or bracelets they can wear in the water without getting destroyed.

When you recognize the issue you’re solving, you can commence to comprehend the worth you propose to people. This will assist you devise a worth proposition to assist you stand out and remain factual to your original imagination.

make a strategy document

The procedure of writing a strategy document is essentially laying out a blueprint for your business. Your strategy document will note what type of operating schedule you’ll use, who your customers will be, where you’ll get funds to launch, the functions of the back complete of your operation, and how you schedule to promote and develop. A strategy document will assist you ensure profitability while factoring in outgoings, pricing, and other challenges.

When you leave through this procedure, you might realize multiple business models can work for your imagination. That’s OK—you don’t have to strictly fall into one category. You can operate with multiple business models under the same business. For example, you may sell clothing in a B2C retail store or on your website, but you might also sell bulk orders to other retail stores with a B2B wholesale operating schedule. Using a variety of business models is sometimes the best way to reach your goals and maximize turnover potential.

Launch your successful operating schedule with Shopify

Once you figure out your ideal operating schedule, you can use it as a reliable launchpad as you develop your business and create how you deliver worth to your customers. 

Whatever your operating schedule, you can use Shopify to design a website, sell products, and construct your brand. With the platform’s versatile, user-amiable platform, you’ll soon commence to view the impact of a excellent operating schedule, avoid one of many ordinary business mistakes, and kick off your path to entrepreneurship with a obvious focus.