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E-commerce, an abbreviation of electronic commerce, refers to the buying or selling of goods, products or services over the Internet. Money transaction, fund transfer and data exchange also fall under e-commerce. It is also the remote meeting of buyers and sellers on the Internet. These are all kinds of transactions involving the transfer of goods, services, funds and even the exchange of data.
So when you login to FinModelslab and purchase your required financial model, it is a classic example of an e-commerce financial transaction. In this transaction, you interact with the seller, exchange your shipping address, transfer the funds and receive the financial model with just a few clicks while sitting at home.
The internet has penetrated almost every area of our lives, and so has e-commerce. As a result, e-commerce has become one of the fastest growing industries in the global economy. Its fastest growing ratio is estimated to be nearly 23% per year and its trade volume will exceed trillion by the end of this decade.
What is the e-commerce financial model?
The process of summarizing business profits and expenses in a spreadsheet is called financial modeling. This spreadsheet is used to calculate the impact of a future event and helps decision-making by leaders. Financial analysts use economic models to analyze business growth and anticipate business performance due to future events of executive decisions.
For simplicity, you can say that the e-commerce business plan template represents the operations, performance, and growth of a business in terms of numbers and graphs. It reflects the company’s past performance, current status, and projected future. Forecasting financial models are used as decision-making tools by company executives and financial analysts. Moreover, such an e-commerce business model helps you estimate the expected costs and profits of a proposed new project without investing any potential money.
Although financial analysts use this business plan for e-commerce companies to explain the work of the company and convince investors of the expected return on their investments, it also helps to determine the impact of internal factors such as change in any e-commerce digital marketing strategy and External factors such as change in economic policies or government regulations.
Financial models are also useful for estimating a company’s valuation and comparing any company to its industry peers. These are also used in strategic planning to see the impacts of various scenarios on any business, calculate the cost of a new project, prepare the business budget, and properly allocate business resources.
One such E-commerce Financial Model is designed by FinModelslab and helps to gather your business information with just one click.
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For a successful businessman, time is the most valuable entity required to make finances, satisfy your customers or grow your business. Our e-commerce business model saves time and does the complex financial calculation in simple clicks, saving the time you can spend on increasing your business activities.
The e-commerce financial model provides you with various reports based on your small data data. Its all-in-one dashboard provides basic information on the current state of your business. Not only the current status, but it also forecasts the growth rate and other parameters for the next five years. All this information presented in absolute figures and graphical charts gives you quick trading insights without wasting time searching various account pages. Just for an idea, check out its all-in-one dashboard that gives you comprehensive information about your e-commerce business on one page, both with absolute numbers and with graphs.
Types of e-commerceFinancial models
E-commerce financial models are classified into four main categories. If you’re starting a new e-commerce business, you’ll fit into one of these buckets. Each category has its own advantages and challenges. Some companies may accommodate more than one category depending on the nature of their work. Knowing your business category helps you think creatively to take full advantage of opportunities and prepare for possible threats.
The four categories of e-commerce business models are listed below:
Business to Business (B2B)
Business-to-Consumer (B2C)
Consumer to consumer (C2C)
Consumer in Business (C2B)
Let us plan deeply into each of these categories to get clear knowledge.
Business to Business (B2B)
In B2B e-commerce strategy, a business sells its products or services to another business. The buyer may be an end user, but a business often resells its products to end users or customers. In this category, most manufacturers and wholesalers are involved. Involving two companies at both ends results in longer sales cycles with higher order values and recurring purchases.
Earlier B2B transactions were done using catalogs and order sheets, but e-commerce financial models have replaced these traditional ways with storefronts and spreadsheets.
Financial beginners and even financial experts can take advantage of FinModelsLab B2B Financial Model Excel, which is designed to provide you with a five-year financial forecast for your B2B e-commerce business.
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Business-to-Consumer (B2C)
In this model, a company or business sells its services or goods directly to customers or end users. These models have evolved recently and capture all e-commerce activity. Customers visit the company’s website, browse the categories, select the desired items and place their order. Then, with a delivery address exchange, the company delivers the goods directly to the customer’s doorstep after fund transactions. Most of the e-commerce giants like Amazon and eBay are the best example of B2C e-commerce strategy. In short, everything you buy online as a consumer falls under the B2C category.
Unlike B2B, the decision-making process is much shorter in B2C models, especially when the item value is lower. Due to shorter sales cycles, it requires fewer dollars for B2C companies to make a sale. It also has a lower order value and less recurring orders than the B2B concept.
B2C e-commerce business involves services as well as goods. The best example of B2C is mobile service providers, Internet service providers, freight and delivery service providers and recently, hotels and restaurants, which use B2B e-commerce strategy to facilitate their customers with delicious food at home.
FinModelslab has designed Excel B2C Financial Model to help you predict your business five-year performance with simple steps.
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In C2C business models, consumers are in direct connection with each other. No companies are involved in these trade setups. This template helps customers to sell their goods, services to other interested customers. Usually, the goods involved in C2C business models include cars, mobiles, electronics, household items, and second-hand items.
A C2C business is also called an online marketplace, and OLX is the best example of C2C business models. The downside of this business model is the lack of quality control and technology maintenance.
C2C Financial Model Excel, designed by FinModelslab, is an easy-to-use tool to manage your business performance with five-year forecasts.
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Consumer in Business (C2B)
A consumer-to-business digital marketing strategy for e-commerce is the reverse of the B2C model. In this model, consumers sell goods and services to businesses. This approach gives consumers the power to name their prices or have companies compete directly to meet their needs.
Affiliate Marketing Services is an example of the C2B business model, where customers provide business to a company. Additionally, many software developers sell demos and various applications to software companies that reflect the C2B business model. Freelancing is the concept that ideally covers the C2B model, where experts sell their services to clients, which can be companies or businesses. Also, C2B templates help businesses meet their e-commerce budget requirements by offering projects to offer on these freelance websites.
FinModelslab has designed many e-commerce financial models to suit your business needs. C2B Financial Template Excel is one such template that helps you maintain your C2B business model and anticipate your business growth over the next five years.
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Delivery methods for e-commerce business
E-commerce activity is very much associated with the delivery methods used to deliver the sold item to the customer. You can think of its vitality as if your business were a car; The delivery method is the driving force. Even a luxurious and valuable car is useless without an engine; The same goes for an e-commerce business. Here are some of the popular approaches that most market leaders have taken.
White mark
White labeling is the item branding strategy that many e-commerce businesses use to sell. In this strategy, the seller removes their brand and logo from the sale items and uses the buyer’s brand instead. So, for example, if you go to a grocery store like Walmart, you will notice that you can buy all kinds of products that are sold under the high value brand.
In white-marked products, the manufacturer of the product sells it to you for less than you will sell it to. This means that you buy the product from a manufacturer to sell it as your own, at any price you want.
FinModelslab Designed a handy tool for you to run your e-commerce business using white labeling. White Labeling Financial Model Model helps you predict your white labeling for the next five years for better performance and profitability.
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Private labeling
Private labeling refers to the sale of products made by one company for sale under the brand name of any other company. It is the best example of a B2B e-commerce strategy, where a company manufactures the products and sells to other companies.
From food to cosmetics, every product is available in private labeling. However, it should be noted that merchandise sold under a private label is subject to the same regulatory oversight as merchandise sold under a national brand.
Nike, for example, is a private label company. They buy in bulk from a manufacturer, change a few things, put their name on them, and sell it.
To manage the private labeling e-commerce business, FinModelslab designed a high-tech Excel template. Excel Private Labeling Financial Model Template is the one that helps you forecast your private labeling e-commerce business over the next five years.
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Dropshipping
One of the fastest growing e-commerce methods is dropshipping. This is an example of a B2C business model where a company sells to customers but does not keep products in stock. Instead, when a dropshipping retailer sells a product to their customer, they buy the product directly from a third party, which can be a manufacturer, wholesaler, or seller, and ship the product directly to the address of the customer. ‘Buyer.
It is a combo model of B2C and C2C, and it helps the seller to eliminate warehouse costs to store the selling products. Also, little quality control is an issue in the dropshipping business because you haven’t seen the product physically before you ship it to the buyer.
Financial model of dropshipping e-com model excel, designed by FinModelslab, is a useful tool that offers you five years of anticipation to boost your dropshipping business.
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Bulk
Wholesale or distribution is the sale of goods or commodities to retailers, industrial, commercial or other professional users. Generally, it is the sale of goods in bulk to anyone other than an end user. In some businesses, a retailer offers their product in bulk at discounted rates.
Traditionally, wholesale has been a B2B e-commerce strategy, but in the growing e-commerce industry, it has become common practice for many companies to offer discounted rates for retail customers when purchasing in bulk. .
FinModelslab has designed versatile Excel templates to help you with any area of eCommerce. Wholesale e-commerce financial model is one that helps you grow your e-commerce business while anticipating opportunities and threats for the next five years.
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Variance tracker
E-COM variance tracker financial model is another useful Excel template designed by FinModelsLab. This electronic e-commerce variance tracker financial template is a comprehensive 5-year financial planning template for a business operating in an e-commerce variance tracker business niche. The template would suit both an e-commerce variance tracking startup as well as a small running e-commerce variance tracker.
Apart from e-commerce financial templates, FinModelslab has developed more than 400 templates to help you manage financial business saving your time and effort.
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