Ecommerce Business with Data Science

Before you get into the different applications of data analytics in the ecommerce domain, it would be prudent first to get familiar with the business model and the modus operandi of ecommerce firms. So, let’s look at how these firms make money and the factors that are most important in driving their bottom lines.

As you saw, the two most common types of ecommerce business models are the marketplace and the inventory-based models. You can read more about them and their comparative advantages from the links given below.

• Marketplace or inventory-led, which ecommerce model works best?

• Difference between marketplace and inventory-led ecommerce models

You also saw that the most popular ecommerce firms in India, like Flipkart and Amazon, follow a hybrid of the two models.

Now, what’s in it for the sellers that they prefer selling their products on these online platforms? You saw the cash flow for the seller corresponding to each sale made on Flipkart’s seller platform. You can see more details of the breakup on the Flipkart seller page. Notice that for a product sold for ₹1,500 on Flipkart, the seller receives about ₹1,224. So, what tangible benefits does an online platform offer to sellers? You can read more about this here.

Additional Reading

To better understand the sources of revenue for ecommerce firms, and the drivers of their business models, you can refer to the links given below:

• How do ecommerce companies make money?

• Business model of Flipkart