TASK 3
Business Model
A business model is a theoretical structure that helps to support the viability of an organization or
product. It explains how an organization operates, creates profit and how it will achieve its
objectives and goals. All business policies and processes that a business adopts is part of its
business model. (Das, 2019)
Types of Business Models
Manufacturer
Products are made from raw materials by a manufacturer. It can be sold directly to customers or
it can be sold to another company that’s responsible for then selling the product. Examples of
manufacturers include Ford and General Electric.
Distributor
Distributors buy products from the manufacturers in order to sell it to the public or to retailers.
Many distributors provide strong money and manpower support to the manufacturer or supplier’s
efforts. Examples of distributors include wholesales and auto dealerships.
Retailer
Retailers directly sell to the public after buying the goods from a wholesaler or distributor.
Examples include Tesco and Amazon.
Drop-Shipping
In drop shipping, stores don’t keep inventory in stock. Instead, they use third-party sellers to
purchase and ship the item to the customer directly. Examples of drop shipping include Amazon
and Shopify.
Franchise
Franchising is an arrangement where the franchiser grants the franchisee the right to use their
trademark, processes and proprietary knowledge with the purpose of allowing the franchisee to
Business Model
A business model is a theoretical structure that helps to support the viability of an organization or
product. It explains how an organization operates, creates profit and how it will achieve its
objectives and goals. All business policies and processes that a business adopts is part of its
business model. (Das, 2019)
Types of Business Models
Manufacturer
Products are made from raw materials by a manufacturer. It can be sold directly to customers or
it can be sold to another company that’s responsible for then selling the product. Examples of
manufacturers include Ford and General Electric.
Distributor
Distributors buy products from the manufacturers in order to sell it to the public or to retailers.
Many distributors provide strong money and manpower support to the manufacturer or supplier’s
efforts. Examples of distributors include wholesales and auto dealerships.
Retailer
Retailers directly sell to the public after buying the goods from a wholesaler or distributor.
Examples include Tesco and Amazon.
Drop-Shipping
In drop shipping, stores don’t keep inventory in stock. Instead, they use third-party sellers to
purchase and ship the item to the customer directly. Examples of drop shipping include Amazon
and Shopify.
Franchise
Franchising is an arrangement where the franchiser grants the franchisee the right to use their
trademark, processes and proprietary knowledge with the purpose of allowing the franchisee to
