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3 Types of E-commerce Businesses that are Winning and Why

The online shopping space continues to explode, far past that era we knew as the recession, and growing faster than traditional retail is.

But here are three types of e-commerce businesses that can’t stop seeing success and why they’re so amazing.

1. Group Buying Sites:

So, we’re all familiar with GroupOn, LivingSocial and BuyWithMe by now right? It’s partly because their ads are everywhere, partly because the press can’t stop covering how massive they’ve become, and a lot because they’ve changed the way we’ve shopped by allowing us to find some of the hottest local deals at incredibly low prices, and purchases only happen if enough participants are interested, which is interesting enough for us as individuals to sign up because at least we know there’s social proof that this product could be worth buying. By being incredibly local, offering new things to do, see and buy, plus by having a new exciting offer each day, these group buying sites have profited wildly.

2. Flash Sale Sites:

I’ll admit, I’m hooked to Beyond the Rack, amongst all the others like Gilt, Hautelook, Editor’s Closet and Rue La La. The simple interfaces allowing you to shop designer at steep discounts (which is rare unless you’re at a really good outlet) from the comfort of your home with new deals everyday, make it harmless in just browsing every afternoon when the deals get released. But what’s been so exciting about these sales for most consumers is the fact that they can sell out very quickly, so the element of knowing that you’re getting an exclusive discount, plus there being a limited quantity and therefore limited time to purchase forces you to hit the add-to-cart button which is paired with a timer for each of the products in your cart because you can’t hold onto a product forever without purchasing it, otherwise it gets released back into the system to get picked up by some other lucky purchaser. The combination of good value, limited offer and impulse buy have made flash sale sites incredibly successful.

3. The One-Stop Shop:

Let’s face it, as humans, we are some of the laziest creatures in the world. With sites like Zappos and Diapers.com, we would rather not think about other places for our shoes or diaper needs, especially when customer service, easy re-ordering, and trusted retailer offering hard-to-find products are deal-breakers. Like how Amazon won the web, these other one-stop shops are conquering the long-tail within their very vertical industry, allowing you to get that paperback novel of that book published once every 5 years from the 1970s.

If you are to start a new e-commerce business, you could probably pick an exciting niche under one of these three categories which is incredibly under-served, like perhaps luxury wristwatches since most of the time wristwatches are incredibly expensive, and with high margins, you can discount them real low, and they offer a tremendous value for consumers who probably hate being pressured by a salesperson at their local authorized watch dealer.

What other types of e-commerce businesses are succeeding today and why?

Danny Wong is the E-commerce Manager for the online groupĀ Blank Label Group, working with e-startups Blank Label, Thread Tradition and RE:custom. Danny also writes about tech, startups and the Internet at HuffingtonPost, TheNextWeb and ReadWriteWeb.

About the Author: Danny Wong