A guide on ecommerce business examples & revenue models

With 20% of global sales now happening online, the ecommerce landscape is more competitive than ever. But what separates a short-lived business from a sustainable, multi-million-dollar brand? The answer lies in how the business is structured and the strategic choices made early on.

Whether you are launching a D2C brand or building a global marketplace, understanding the different revenue models and how successful ecommerce businesses structured their brand is vital.

This guide breaks down the core ecommerce revenue models and analyzes strategies used by industry leaders across the globe to help you build a resilient, profitable online business.

What are the types of ecommerce revenue models?

eCommerce businesses earn revenue depending on the business model they adopt. In many cases, a single business may use multiple revenue models at once.

These models are typically defined by the target market, product offerings, and overall business objectives. Below are the six main ecommerce revenue models commonly used by businesses.

1. Sales revenue model

The sales revenue model is the most common approach in ecommerce, which operates on a per-transaction basis. In this model, businesses generate income by directly selling products or services for a one-time payment per purchase.

Since it focuses on individual transactions rather than recurring payments, it is often the standard choice for direct-to-consumer (D2C) brands, traditional product-based stores, and sellers of individual digital assets.

While it provides immediate cash flow, it often requires continuous marketing efforts to acquire new customers or drive repeat visits.

2. Subscription revenue model

The subscription revenue model focuses on long-term relationships by generating revenue through recurring payments. This can be billed weekly, monthly, or annually.

This model allows customers to maintain ongoing access to a product, service, or exclusive content library. For the business, this creates a predictable and stable revenue stream, making financial forecasting and inventory planning much simpler.

A subscription model frequently utilizes tiered pricing plans to cater to different user needs and is the foundation for SaaS platforms, membership communities, and subscription box services.

3. Transaction fee model

In this model, the platform acts as a facilitator for exchanges, earning revenue by charging a fee for every transaction processed. These fees are structured as a fixed amount, a percentage of the total sale, or a combination of both.

Since revenue is directly tied to the activity of others, this model is highly scalable; as transaction volume grows, so does the platform's income.

Most online marketplaces like eBay or Etsy, payment gateways like PayPal, and booking platforms run based on this transaction fee model.

4. Advertising revenue model

The advertising revenue model generates income by displaying advertisements to users on the ecommerce platform. Revenue is earned based on user interactions, such as impressions, views, clicks, or actual conversions.

This model requires high traffic and deep user engagement to be truly profitable, and is often used as a secondary stream alongside other models.

For content-heavy sites and free-to-use services, this is a common staple to help other businesses earn visibility and even target specific demographics.

5. Affiliate revenue model

Like the advertising revenue model, the affiliate model is also a performance-based framework where a business earns a commission for promoting third-party products.

When a user makes a purchase or signs up through a referral link, the affiliate receives a commission. The primary advantage here is that anyone can become an affiliate marketer, as the business does not need to manage inventory, shipping, or fulfillment.

This is the dominant model for influencers, review sites, and bloggers who can monetize their personal brand or expertise.

6. Agency revenue model

Unlike the previous models that focus on products or traffic, the agency revenue model relies on selling professional expertise. Revenue is generated by providing ecommerce-related services such as store development, digital marketing, or brand management.

Clients pay through project-based fees, monthly fees, or performance-based fees. This model is used by consultants and digital agencies who support other businesses.

Successful ecommerce business examples to follow

Now that you know about the various ecommerce revenue models, examine a few ecommerce business examples that have successfully implemented these models to learn from them.

1. Best Buy

Founded by Richard M. Schulze, Best Buy started as a small audio equipment seller in 1966 and grew exponentially in the 2000s to offer a wide range of consumer electronics.

Challenges faced

In 2012, with online marketplaces like Amazon coming into the picture, Best Buy slowly started losing business, struggling to keep their place in the ecommerce space.

Strategies implemented

Best Buy looked for ways to differentiate themselves. They recognized that online marketplaces lacked physical stores where customers could experience products and receive expert guidance.

The company also started placing customers first, investing heavily in enhancing the customer experience and repurposing many stores as warehouses, enabling faster deliveries.

2. Phia

Phia is an ecommerce shopping app that leverages AI to solve the biggest hurdle faced by shoppers: comparing product prices manually. This AI-powered app can compare prices across over 40,000 retailers and secondhand sellers.

Challenges faced

While the app solves a great operational problem, it also raised privacy concerns, as it relies on data collected from users’ browsing activity across different websites.

Strategies implemented

Privacy and data security are common concerns in online businesses. This ecommerce business example shows that the best way to go about this is to employ secure practices and maintain transparency.

They secured a lot of direct brand partnerships to improve the accuracy of their recommendation algorithms and also openly stated their data collection and data privacy measures.

3. Gymshark

Gymshark is an ecommerce business founded by Ben Francis, who noticed that gym clothes were predominantly designed for bulky bodybuilders, not everyday gym-goers.

Challenges faced

Early on, Gymshark struggled with low brand awareness despite having strong products. After sales began to gain traction, the company faced a major setback during its 2015 Black Friday sale when their ecommerce website crashed.

Strategies implemented

To overcome their low brand visibility in the initial days, Gymshark pioneered what we now know as influencer marketing. Instead of running traditional advertisements, Francis sent apparel to fitness enthusiasts, asking them to wear and review the products.

For the Black Friday sale disaster, he personally hand wrote 2,000 apology letters to affected customers, including discounts, turning the disaster into an opportunity to showcase the brand's deep sincerity.

4. Burrow

Two friends, Stephen Kuhl and Kabeer Chopra, came across the same problem with their furniture; it took many days to deliver, was hard to assemble, and was expensive. Spotting a clear market gap, they founded a business that offered modular furniture that was affordable, easy to assemble, and delivered quickly.

Challenges faced

While they had a solid vision, they faced a few major hurdles at the start. They lacked significant capital to start the business and had to figure out how to fulfill their "fast delivery" promise.

Strategies implemented

To fund the business, they actively reached out to investors. While they focused on large funding, they also did not ignore small investments.

Next, this ecommerce business eliminated the intermediary costs associated with online marketplaces and shortened the shipment process by adopting a direct-to-consumer (D2C) ecommerce business model.

They did this by building their own online store that gives options for users to customize their furniture, and features useful assembly videos for a clearer picture.

5. UPLIFT Desk

Another successful ecommerce business example from the furniture industry is UPLIFT Desk. The business began when an engineer, Jon Paulsen, struggled to find a proper standing desk.

Having knowledge in ergonomics, he designed height-adjustable desks. This move eventually grew into a full-blown ecommerce business, supplying desks to customers including Fortune 500 companies.

Challenges faced

Paulsen wanted to sell the desks at the lowest possible price, without compromising quality. Since furniture is comparatively a high investment, building trust and ensuring customers genuinely valued and used the product was a major challenge.

Strategies implemented

By operating as both the manufacturer and the seller, UPLIFT Desk was able to cut down a lot of costs and complications. As any ecommerce business should, UPLIFT Desk focused on building confidence in their products first. They offered a 30-day return policy and a 10- to 15-year warranty, helping strengthen customer trust.

6. ASOS

As seen on screen (ASOS) is an ecommerce business that sells trendy apparel and accessories worn by celebrities on screen. Born from the universal desire to replicate "red carpet" or "on-screen" looks, the business was launched in the 2000s and has remained a dominant force ever since.

Challenges faced

This ecommerce business focuses on capitalizing on trends, which means stocking up is extremely hard. Additionally, ASOS faced a generational shift. After a decade of focusing on millennials, they had to evolve their brand identity to stay relevant to the rising Gen Z demographic.

Strategies implemented

While ASOS has a team to forecast trends, mismatches are inevitable. During those times, the business provides a stock-clearance discount. They operated on the principle that it is better to move stock at a low profit than to let it sit as a total loss.

To better connect with Gen Z, ASOS introduced inclusive fashion lines, including gender-neutral clothing, showing other businesses how important it is to evolve with your audience.

7. Dollar Shave Club

The Dollar Shave Club is an ecommerce business example that runs on the most profitable model: subscriptions. The idea was born from a casual conversation between friends who were frustrated by two things: the high cost of razors and the recurring hassle of having to remember to buy them at the store every two weeks.

Challenges faced

The founder, Michael Dubin, did not have sufficient funding to start the business. However, that was not his biggest worry. During this time, the razor market was heavily dominated by a duopoly, Gillette and Schick, and Dubin did not have any idea how to make people trust a razor from an unknown brand.

Strategies implemented

Dubin resorted to the power of storytelling. He created a short 90-second video that resonated so deeply, it went viral, generating 12,000 orders in just 48 hours and attracting immediate interest from venture capitalists.

Dollar Shave Club offers a vital lesson for ecommerce entrepreneurs: if there is no room for product innovation, innovate the business model. By shifting from a "one-time purchase" to a "subscription service," Dollar Shave Club not only solved the hassle for customers, but also built a reliable, and sustainable income for themselves.

8. The Jack Man

With organic and vegan food becoming extremely popular, a lot of businesses have started rushing to fill the demand. One notable ecommerce business example among them is The Jack Man, an Australian-based organic business that creates plant-based, meat-like products made from jackfruit.

Challenges faced

The brand initially operated as an offline business. This caused their growth to be restricted to local foot traffic, severely limiting their revenue potential.

Strategies implemented

The Jack Man took their offline store online through an ecommerce platform, which completely changed things for them. This move allowed them to bypass geographical limits and tap into global markets hungry for sustainable food alternatives.

9. TWELVElittle

Based in the US, TWELVElittle is a business-to-consumer ecommerce example focused on selling functional diaper bags. The business started from the founder’s personal struggle to find diaper bags that were practical without compromising fashion, revealing a clear gap in the market.

Challenges faced

Like many new ecommerce brands, TWELVElittle initially struggled with low brand visibility. Additionally, customers often found it difficult to understand which bag was best suited for their specific needs, as mothers have varying lifestyles and requirements.

Strategies implemented

The brand had a clear motto from the start: to ensure diaper bags were fashionable while appealing to the global audience. So, their designs were carefully pre-planned to align with international fashion trends.

To improve brand visibility, TWELVElittle invested heavily in social media marketing, which led to increased awareness and sales. The brand also hosted events, allowing customers to see, touch, and learn about the products firsthand, helping them make more confident purchase decisions.

10. Thread Shop

One powerful, small ecommerce business example is Thread Shop, a brand selling high-quality tailoring and embroidery materials required for making crafts. This brand shows how a small craft supplies business in India transformed into an eight-figure business by focusing exclusively on the domestic market.

Challenges faced

Initially, Thread Shop managed orders through WhatsApp. When the orders started increasing, things turned chaotic, and too much time was being wasted on managing orders.

Strategies implemented

To take care of their order management, Thread Shop switched their offline business to an online store by choosing the right ecommerce platform that could handle their end-to-end operations, from taking orders to shipment and delivery.

Instead of trying to dominate the entire craft market at once, they started small with a curated selection of products. They gradually reinvested their profits they earned by selling online to expand their catalog, which now has more than 4,800 SKUs.