E-Tailing Models

Two models of E-tailing are explained below:

1. Inventory based model: According to the FDI policy in India, “Inventory model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.” 




It includes the e-tailing activities where inventory of products and services is owned by e-tailers and it is directly sold to customers. The main feature of this model is end to end process i.e., from initiating from product purchase to managing logistics and finally dispatching the products. Example- Alibaba, Jabong.

 

2. Marketplace based model: According to the FDI policy guideline, “Marketplace model of e-commerce means providing of an information technology platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.” This model provides a platform where buyers and sellers do the transactions in efficient, transparent and trusted environment. Here, buyers can compare the prices and accordingly place the orders to the authorized sellers on the website. Majorly, e-tailers like Amazon, Patym mall and Flipkart practice the marketplace-based model. For example, when buyer login to Amazon India and place an order to a registered seller, Amazon India act as a mediator here. Subsequently, the registered seller takes care of logistics and dispatching of the products to the customers.

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