Now that we’ve explored the different kinds of eCommerce models that businesses can use, let’s take a look at some of the different revenue models that can be deployed by CPG companies in the eCommerce market.

First, let’s talk about wholesaling.

Wholesaling is predominantly a B2B model, and it's commonly used by big CPG companies with their major retailers. Here, CPGs sell their products in bulk at discounted prices, which are then, in turn, usually sold on at a premium by the retailer to the consumer.

The main benefit of wholesaling is scale. Order sizes tend to be large, and this means that the overall margins and profits can also be significant.

What’s also great about this model is that it's very much in both the supplier’s and the retailer’s interest to make sure that stock gets sold to the consumer - while retailers want to turn it over for a profit, suppliers want to make sure that retailers sell out and come back for more.

This means that you don’t necessarily have to take on all of the responsibility when it comes to marketing your products. Instead, you could benefit from a retailer co-funding any promotions you intend on running for their audiences.

When it comes to wholesaling, however, it’s important to note that this model can come with considerable costs, and can require significant resources to operate effectively.

Next up on the agenda are subscription services.

Here, consumers commit to receiving goods on a recurring basis, whether that’s weekly, monthly, and so on.

Subscription services are popular with consumers because they're all about convenience - once a shopper has subscribed, the products will continue to arrive at their door, on schedule, for as long as they want.

Traditionally, subscription services have worked well in low interest, repeat purchase categories like pet food, but they’re now seeing notable success in other categories, especially for grocery goods - just take HelloFresh, Oddbox, and Boxgreen as examples.

For businesses, subscription services are great because they help to generate repeat business. Well, if they can retain subscribers, that is. As more businesses realize the revenue opportunities offered to them by this model, competition will continue to increase - and that’s one of the main challenges of this model going forward.

Revenue & Delivery Models