Ecommerce Business Models: Types and Examples (2026)

Starting an ecommerce business involves more than what you sell and how you market it. One of the most important choices to make is which ecommerce business model you build on.

Global ecommerce sales are forecast to grow from $6.88 trillion in 2026 to $7.89 trillion by 2028. That kind of scale creates plenty of opportunity, but only if your business model supports how you plan to compete and grow over time. 

There are pros and cons to each ecommerce business model. This article includes a high-level breakdown of those many different business model options and how to select the right one. 

What is a business model?

A business model explains how a company delivers value to customers and earns revenue. An ecommerce business model defines who buys the product, how the seller sources and fulfills it, and how payment works.

The model covers the following:

Who you sell to

Common models include:

• Business to consumer (B2C)
• Business to business (B2B)
• Direct to consumer (DTC)
• Consumer to consumer (C2C)
• Consumer to business (C2B)

How you source and fulfill orders

Options include dropshipping, wholesale and retail, white or private labeling, and subscriptions.

How transactions generate revenue

A company may charge for one-time purchases, recurring subscriptions, usage, commissions, or licenses.

For example, a DTC brand may sell private-label products through its own website. Customers could buy once or subscribe to recurring deliveries. The first choice determines how the product reaches the customer. The second determines how the brand earns revenue.

Why are business models important?

A business model defines who a company serves, how it operates, and how its offer differs from competitors. It gives the company a direction for future decisions.

Several ecommerce trends are changing those decisions:

• Social commerce.Social commerce places product discovery and checkout inside a social platform like TikTok. According to a DHL survey, 7 in 10 shoppers had already purchased through social media. 
• Flexible subscriptions. Pause and reactivation options change when subscription businesses collect recurring revenue. Recurly found that returning subscribers accounted for 20% of acquisitions. Among businesses offering a pause option, 25% of subscribers paused rather than canceled.
• Resale and buybacks. These models obtain inventory from previously sold products and generate revenue from another sale. More than half of DHL’s respondents bought preowned or refurbished products. Another 58% expressed interest in retailer recycling or buyback programs. 
• AI-assisted shopping. AI shopping adds a transaction path where customers discover and purchase products through an AI interface. In Q1 2026, AI-driven traffic to Shopify stores increased eightfold year over year. Orders from AI-powered searches increased nearly 13 times. 

To sell through AI channels, Shopify stores can useAgentic Storefronts to make products discoverable and purchasable through AI conversations. 

Main types of ecommerce business models

The seven types of ecommerce are:

1. Business to consumer (B2C)
2. Direct to consumer (DTC)
3. Business to business (B2B)
4. Consumer to consumer (C2C)
5. Consumer to business (C2B)
6. Business to business-to-consumer (B2B2C)
7. Business to government (B2G)

For example, Amazon retail orders are B2C, but a purchase from Apple.com is both DTC and B2C. A person selling a used phone through eBay is C2C.

These categories describe who participates in the sale and how the transaction reaches the buyer. They do not determine sourcing, fulfillment, or margins. 

The table shows common patterns, but actual margins depend on the product and operating costs.

1. Business to consumer (B2C)

B2C describes a sale from a business to an individual. Target selling a shirt to a shopper is a B2C transaction, whether the purchase happens online or in a store.

B2C defines the buyer as an individual consumer. It does not explain whether the business made the product or purchased it from a supplier.

2. Direct to consumer (DTC)

Direct-to-consumer is a B2C transaction in which a brand or manufacturer sells directly to the end customer. It doesn’t use a third-party retailer for that sale.

Buying shoes from Nike.com is both DTC and B2C, because Nike sells straight to you. Buying them from Foot Locker is B2C because you’re buying from a retailer. Nike selling the shoes to Foot Locker is B2B.

eMarketer projected that US DTC ecommerce sales would reach$239.75 billion in 2025. That represents 19.2% of US retail ecommerce sales.

3. Business to business (B2B)

B2B ecommerce covers online sales between businesses. For example, a coffee roaster sells cases of beans to cafés under volume pricing and agreed payment terms.

The International Trade Administration forecast that the global B2B ecommerce market would reach$36 trillion in 2026, following a 14.5% compound annual growth rate (CAGR).

Shopify B2B provides native tools for B2B sales through the Shopify admin and online store. Stores can run B2B and DTC sales from one store or create a separate B2B store. Each company account can receive its own catalog and pricing.

4. Consumer to consumer (C2C)

C2C ecommerce occurs when one individual sells to another. In a C2C eBay transaction, the individual seller owns the item and usually handles shipping. The platform provides the marketplace and transaction tools.

This differs from B2C because both sides of the sale are consumers. The same marketplace may carry C2C and B2C listings, depending on who is selling.

5. Consumer to business (C2B)

C2B reverses the usual business-to-consumer transaction. An individual sells work, content, or usage rights to a company.

A photographer licensing an image to a brand is using a C2B model. A freelance marketplace may facilitate the transaction, but the buyer remains the business.

6. Business to business to consumer (B2B2C)

B2B2C places two businesses in the transaction path to the end customer. One business supplies the product or service. The second provides customer access or handles part of the transaction.

A grocery retailer selling through Instacart uses a B2B2C structure. The retailer provides the products, and Instacart provides the ordering platform and delivery service.

7. Business to government (B2G)

B2G ecommerce covers sales from businesses to government agencies. These transactions take place through procurement systems, contracts, or approved government marketplaces.

An office supplier accepting a federal order through General Services Administration (GSA) Advantage is operating under a B2G model. The sale follows the purchasing rules and contract terms set by the government buyer.

15 business models for ecommerce businesses

Review these 15 business models you can use as inspiration to start your own business:

1. Ecommerce business model (B2C/B2B/DTC)
2. Retail business model (B2C/B2B)
3. Dropshipping business model (B2C/B2B)
4. Manufacturing business model (B2C/B2B)
5. Wholesale business model (B2B)
6. Print-on-demand business model (B2C/B2B)
7. Direct-to-consumer business model (DTC)
8. Subscription business model
9. Digital products business model (B2C/B2B)
10. Fee-for-service business model (B2C/B2B/C2C/C2B)
11. Freemium business model (B2C/B2B)
12. Affiliate business model (C2C/B2C)
13. Marketplace business model (B2C/B2B/C2C)
14. Reselling business model
15. Bundling business model

1. Ecommerce business model (B2C/B2B/DTC)

An ecommerce business sells products or services through a website, marketplace, or social platform. It can serve consumers or other businesses. A brand that sells through its own store uses a DTC channel.

Online selling removes the limits of a single storefront, but it adds customer acquisition and fulfillment costs. Each model assigns inventory ownership and fulfillment expenses differently.

Pros of ecommerce business model

• Reach. A store accepts orders outside its local market.
• Lower property costs. The business does not require retail space.
• Sales growth. US retail ecommerce sales reached $326.7 billion in the first quarter of 2026, up 9.8% year over year.

Cons of ecommerce business model

• Competition. Customers compare sellers in a few clicks.
• Operational dependence. Site outages or fulfillment problems interrupt sales.

An ecommerce success story

Silk apparel site SilkSilky launched their DTC store on Shopify in 2021. After upgrading to the Shopify Plus plan and adding international sites, the company reported a 680% sales increase over two years. 

2. Retail business model (B2C/B2B)

In retail, businesses sell products from one or more brands. Their inventory comes from wholesalers, in-house production, or private label suppliers. Sales take place in stores, online, or through both channels.

Most retail transactions are B2C. A retailer uses B2B when it sells products to another company. For example, an office furniture store may serve commercial buyers.

Pros of retail business model

• In-person sales. Customers examine products before buying.
• Order pickup. Store inventory fulfills local online orders.

Cons of retail business model

• Overhead. Rent and store labor add fixed costs.
• More operations. The business manages both sales and store facilities.

A retail success story

Venus et Fleur, the luxury floral brand famous for their Eternity flowers, got their start online in 2015. They used Shopify’s platform to support their expansion from ecommerce to physical retail, allowing the brand to tackle new challenges in managing multiple sales channels and store locations. 

The brand expects to double down on their retail success, with future plans to offer buy online, pickup in-store (BOPIS) functionality.

3. Dropshipping business model (B2C/B2B)

In dropshipping, the merchant lists products but does not hold them. A supplier stores the inventory and ships each order to the customer.

The customer purchase is B2C. The arrangement between the merchant and supplier is B2B. The business controls the storefront and customer service, and the supplier manages stock and fulfillment.

Pros of dropshipping business model

• Low inventory cost. Products are purchased after a customer orders.
• Supplier fulfillment. The supplier picks, packs, and ships orders.

Cons of dropshipping business model

• Thin margins. Supplier fees reduce the amount kept from each sale.
• Limited inventory control. Supplier stockouts delay customer orders.

A dropshipping success story

Subtle Asian Treats is a top dropshipping business on Shopify selling plushies and cases for AirPods and iPhones. They were founded by Tze Hing Chan, a young Malaysian entrepreneur, who aimed to jump on the bubble tea trend happening in Asia.

The brand attracted thousands of bubble tea fans from the area by giving people a unique selection of products at a fair price. They’ve also built awareness on social media via user-generated content (UGC), and appeal to customers with any budget through product diversification.

4. Manufacturing business model (B2C/B2B)

A manufacturing model gives the merchant responsibility for how a product is made. Production takes place in-house or through a contract manufacturer.

Three common approaches are private label, white label, and handmade production:

• A private label product is made for one brand. 
• A white label product is made for several sellers. 
• Handmade production keeps the work with the business owner or team.

Pros of manufacturing business model

• Product control. The business sets the specifications and quality standards.
• Unit economics. Larger production runs may reduce per-unit costs.

Cons of manufacturing business model

• Upfront spending. Samples and minimum orders require capital.
• Production risk. Defects or delays may stop product availability.

A manufacturing success story

Old World Kitchen began as a family-owned business selling products door to door in their local area. They’ve since gone through a period of growth, in which the best move for getting the business online was to sell on Etsy.

The brand, which specializes in handcrafted kitchen utensils, wanted to expand further. To do that, they needed full control over pricing, branding, and quality control—things Etsy couldn’t offer.

After moving from Etsy to Shopify, Old World Kitchen saw a sharp increase in online conversions. They were also able to partner with relevant brands and increase their prices, all while staying true to selling goods made by hand.

5. Wholesale business model (B2B)

Wholesalers sell products in volume to retailers or other businesses. A reseller may also buy products wholesale and sell them individually at retail prices.

This model avoids product development, but it requires inventory purchases. Supplier terms govern minimum orders and advertised prices.

Pros of wholesale business model

• Existing products. The business sells goods already available in the market.
• Volume orders. Larger purchases raise the value of each transaction.

Cons of wholesale business model

• Inventory exposure. Unsold goods tie up cash and storage space.
• Supplier rules. Minimum orders or price policies restrict decisions.

A wholesale success story

Pernell Cezar Jr. and Rod Johnson founded BLK & Bold with the goal of helping local communities through selling coffee. The company pledges 5% of all profits to organizations that assist youth programs, improve workforce development, and eliminate youth homelessness.

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

Rod Johnson shares his inspiring story of founding a social impact-driven business on an episode of Shopify Masters.

6. Print-on-demand business model (B2C/B2B)

Print on demand (POD) sells products made after an order is placed. The business creates the design and a POD supplier prints and ships the item.

The business pays for production after the sale, so the model does not require finished inventory. Supplier pricing and shipping charges reduce the margin on each order.

Pros of POD business model

• Low upfront cost. Production begins after the customer pays.
• Product testing. Designs can be added or removed quickly.

Cons of POD business model

• Supplier limits. Available products and printing methods vary.
• Shipping control. Delivery costs and packaging depend on the supplier.

A POD success story

Fanjoy is an online marketplace selling curated print-on-demand products from a variety of artists and creators. CEO Chris Vaccarino started the company in 2014 after realizing the opportunity 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 need to be successful entrepreneurs—and to customers ready to buy their designs. To date, they have shipped more than three million packages.

7. Direct-to-consumer business model (DTC)

DTC means a brand sells its products straight to the end customer. A retailer or marketplace does not handle that transaction.

The brand keeps the retail revenue. It also pays for its own marketing and fulfillment. Selling direct gives the brand access to customer and order data collected through its store.

Pros of DTC business model

• Retailer share. Revenue is not divided with a third-party retailer.
• Direct feedback. Customer responses go back to the brand.

Cons of DTC business model

• Distribution costs. The brand funds storage and delivery.
• Audience building. The brand funds its own customer acquisition.

A DTC success story

In 2013, Milanese footwear startup Velasca stepped into the shoe scene with a goal to disrupt the industry by connecting consumers directly to shoemakers. 

Velasca was born out of a casual conversation between cofounders Enrico Casati and Jacopo Sebastio in the back of a taxi. They have since grown into a blossoming DTC brand, selling hundreds of thousands of shoes in more than 30 countries.

8. Subscription business model

A subscription business charges a recurring fee for continued access to a product or service. Billing usually follows a monthly or annual schedule.

Subscription businesses come in many forms. B2C ecommerce retailers can include a subscription model in addition to their one-time purchase offerings. Subscriptions create recurring revenue while customers remain active. If customers pause or cancel, it can reduce revenue. 

Pros of subscriptions business model

• Recurring billing. Active subscriptions produce scheduled payments.
• Demand planning. Order history provides a basis for inventory decisions.

Cons of subscriptions business model

• Churn. Cancellations reduce recurring revenue.
• Operational repetition. Billing or inventory errors may affect many orders.

A subscription success story

Clevr Blends, a popular online latte brand, offers subscription-based purchases as well as individual purchases. The company, founded in California, has grown into a thriving business since its launch in 2016.

9. Digital products business model (B2C/B2B)

A digital product is delivered electronically and does not require physical inventory. A downloadable sewing pattern is one example.

Creation requires time or capital upfront. Once the product exists, each new order carries little production or delivery cost.

Pros of digital products business model

• No shipping. Customers receive the product electronically.
• Repeat sales. The same file can be sold more than once.

Cons of digital products business model

• Copying. Buyers may redistribute files without permission.
• Free alternatives. Competing resources may reduce willingness to pay.

A digital products success story

Online store Pixie Faire has many products for sale, but don’t expect all of them to arrive in a package. Instead, this seller’s inventory is primarily digital products, selling downloadable patterns for doll clothes. With this digital delivery model, Pixie Faire cut out manufacturing expenses and delays, and became a $50,000 per month business. 

10. Fee-for-service business model (B2C/B2B/C2C/C2B)

A fee-for-service business sells labor or expertise rather than a physical product. Payment follows either time worked or a fixed deliverable.

The relationship depends on the buyer. A consultant serving a company uses B2B, for example, and a dog groomer serving an individual uses B2C.

Pros of fee-for-service business model

• Low inventory costs. Most service businesses do not stock products.
• Flexible pricing. Fees can follow time, scope, or output.

Cons of fee-for-service business model

• Capacity limits. One person has a fixed number of working hours.
• Rate pressure. Clients may negotiate time or project fees.

A fee-for-service success story

Product and software supplier Path has a team of more than 300 editors and graphic designers who perform basic but necessary photo edits. 

Rather than charging an hourly rate, Path applies a flat per-photo editing fee, depending on the complexity of the edits. They also offer faster turnaround times at an additional fee.

11. Freemium business model (B2C/B2B)

A freemium business offers a free version and charges for additional features or usage. Software companies use this model to let customers try a product before paying.

Revenue depends on converting part of the free user base to a paid plan. The free tier still creates hosting and service costs.

Pros of freemium business model

• Product access. Customers can try the core product before paying.
• Usage data. Free accounts reveal how people use the product.

Cons of freemium business model

• Conversion. Free users may never move to a paid plan.
• Service costs. The company pays to maintain unpaid accounts.

A freemium success story

Music streaming platform Spotify offers a free plan with ads and feature limits. Paid plans remove ads and add features such as offline listening. At the end of 2025, Spotify had 751 million active monthly listeners, with more than 290 million paid subscribers worldwide. 

12. Affiliate business model (C2C/B2C)

An affiliate earns a commission for referring a customer to another business. The affiliate promotes the product and the business handles the sale and fulfillment.

Businesses also use affiliate programs to recruit publishers or creators. Payment usually depends on a tracked sale or another agreed action.

Pros of affiliate business model

• Performance-based payment. Merchants pay when a tracked action occurs.
• No fulfillment. Affiliates do not process the referred order.

Cons of affiliate business model

• Commission limits. Affiliates receive only part of each sale.
• Audience dependence. Referral volume depends on reach and trust.

An affiliate success story

QALO sells silicone engagement rings and wedding bands on their website. To spread the word in their 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 move your product around their gym or whatever it may be,” says cofounder KC Holiday.

These affiliate relationships were critical to the brand’s growth shortly after their launch, and they still have the affiliate program today.

13. Marketplace business model (B2C/B2B/C2C)

A marketplace is a platform where third-party buyers and sellers transact. The marketplace usually does not own the products or services listed.

Revenue may come from commissions, listing fees, or seller subscriptions. The platform also sets rules for payments and disputes.

Pros of marketplace business model

• No owned inventory. Third-party sellers provide the listings.
• Seller growth. More sellers expand the available selection.

Cons of marketplace business model

• Two-sided acquisition. The platform must attract buyers and sellers.
• Transaction oversight. Disputes and seller quality require management.

A marketplace success story

Kick Game is a DTC brand that became a brick-and-mortar retailer, and later grew into a global, multichannel marketplace. Shoppers can browse sneakers, socks, and related accessories from dozens of select brands like Saucony, Asics, and Air Jordan, all on the Kick Game website.

14. Reselling business model

A reseller buys products and sells them again for a higher price. The goods may be new or used.

Profit depends on the difference between the acquisition price and the resale price. Platform and fulfillment costs reduce that amount.

Pros of reselling business model

• No product development. The reseller sources existing goods.
• Category flexibility. Inventory can follow changes in market demand.

Cons of reselling business model

• Unsold stock. Inventory may lose value before it sells.
• Supplier dependence. Product availability changes with outside sources.

A reselling success story

New Jersey–based Packer Shoes started as a small neighborhood custom shoe shop, building much of their community before the internet. Today, they also resell sneakers from household name brands like Adidas, Asics, and Nike.

15. Bundling business model

Bundling packages several products or services into one offer. The bundle may use a single price or include a discount compared with buying each item separately.

Bundles raise order value when customers buy more items in one transaction. The pricing must still cover the cost of every item included.

Pros of bundling business model

• Larger orders. One purchase includes several products.
• Product pairing. Related items appear in one offer.

Cons of bundling business model

• Margin pressure. Discounts reduce revenue per item.
• Inventory dependence. One stockout may block the entire bundle.

A bundling success story

EasyStandard is a brand that offers long-lasting and comfortable wardrobe essentials built to perfectly fit all body types. After migrating to Shopify, they were able to introduce product bundles to their customers. 

This move streamlined back-end business operations and supported a 19% increase in conversion. 

How to select a business model

Compare these six factors when choosing a business model:

• Fulfillment model. Decide who will store, pack, and ship each order. This determines how much control you have over delivery.
• Margin profile. Compare the revenue from each sale with the costs required to complete it. A higher gross margin may come with higher fulfillment expenses.
• Customer data ownership. Direct sales give you access to data collected through your store. Marketplaces may limit what sellers receive.
• Startup cost. Account for the money required before the first sale. Manufacturing requires inventory funding, while service businesses sell existing expertise.
• Daily operations. Consider the work required to keep the model running. Dropshipping removes warehouse tasks but adds supplier coordination.
• Risk exposure. Review where the business could lose money. Buying wholesale puts cash into inventory before it sells.

Understand your audience

Define whether the buyer is a consumer, business, or government agency. Then consider how that buyer places orders.

A company buying stock in bulk has different pricing and payment requirements than an individual making a one-time purchase.

Match the customer problem

The model must fit the main reason the customer buys. For example, a business built around fast delivery requires control over inventory and fulfillment. Dropshipping gives more of that control to the supplier.

Consider more than one model

Many merchants use several business models at the same time. A brand may sell DTC through its website and wholesale to retailers.

DTC sales provide customer and order data from the brand’s own store. Wholesale adds larger orders and retail distribution. Using both also reduces dependence on one sales channel.

WithShopify unified commerce, DTC, B2B, and retail operations use the same product and order records.

Create a business plan

Use a business plan to test the model before committing capital. Estimate revenue and costs for the first year, then recalculate using lower sales or higher fulfillment expenses.