E-commerce business models and economics: the complete picture
E-commerce business models and economics come down to two questions that are inseparable: how do you create value for your customers, and how do you make money from it in a sustainable way? A business model describes who you sell to, what you sell, and how the money moves. The economics decide whether the model can actually stand on its own once purchasing, shipping, marketing and operations are accounted for.
E-commerce covers the buying and selling of goods and services over the internet. At Mercive, we work with brands that have moved past the first phase, where it was simply about getting sales going, and now need a model and an economic foundation that can scale. This article provides the overview and serves as an entry point to the more in-depth topics in the cluster.
The most important business models in e-commerce
In e-commerce there are a handful of models that come up again and again. B2C is selling directly to the consumer, and this is where most webshops start. B2B covers sales to other businesses, often with larger orders, negotiated prices and longer decision processes. DTC, or direct to consumer, is a variant where the brand sells without intermediaries and owns the entire customer relationship itself.
Beyond who you sell to, the models differ in how the sale is structured. Classic one-off sales live on new orders and repeat purchases, while the subscription model is built on predictable, recurring revenue. Marketplace models and hybrid setups, where you sell both on your own shop and through platforms, are becoming increasingly common.
There is no single correct model. The choice depends on your product, your margin and how often customers need to buy again. We recommend choosing the model based on customer behaviour and economics, not on what is popular. If you are considering recurring revenue, you can read more about when the subscription business model makes sense for your webshop.
The economics behind a healthy webshop
A business model is only as good as the economics it rests on. The central metrics are contribution margin per order, customer acquisition cost (CAC), customer lifetime value (LTV) and repeat purchase frequency. When CAC approaches your margin, your earnings disappear no matter how much you sell. That is why the ratio between LTV and CAC is often the number that best reveals whether a webshop is healthy.
Pricing is the lever that affects the economics fastest. A price increase of a few percent can shift the entire contribution margin without necessarily costing sales, as long as the value is clear to the customer. Shipping, returns and payment fees also eat into the margin and should be factored in from the start. If you want to work with this in a structured way, we have gathered our approach in our guide to pricing strategy in e-commerce.
At Mercive we always start with the numbers before we touch the design. A market analysis uncovers demand, competitors and price levels, so the model is built on reality rather than assumptions. That is the foundation our market analysis in e-commerce is built to deliver.
Education and skills in e-commerce
Interest in the field is reflected in the fact that there are several programmes within e-commerce and digital marketing, where you learn both the technical and the business side. An e-commerce education typically combines business understanding, economics and digital marketing, and admission requirements vary from year to year depending on demand. An e-commerce specialist works on running and optimising online business models, and pay depends on responsibility, industry and results.
For a brand, the point is not to have a single title in place, but to gather the right skills around business model, economics, technology and marketing. Roles such as e-commerce shipper, meaning the logistical side, work together with strategy and marketing management. How you connect those disciplines to drive growth is something we go deeper into in our article on marketing management for e-commerce.
How Mercive can help
Want to take this further? Read more here:
