Which business model would you choose?

If you have the opportunity to chose one business model what would you choose between:

1. Ecommerce
2. Agency

These 2 businesses have pros and cos of course.

Ecom
Pros:
- You have the ability to start with dropshipping and that means the budget is low as $2000-$5000
- You can scale quicker than agency ( of course if you have the cashflow to do it )
- You can scale the business to $1M with littlle staff ( you can outsource the ads, email campaigns and fullfilment )
- Automatiaation. You can automate a small ecom brand to work as minimum as 3-4 / week. I'm not saying that you can make millions like this but you can have a small side income.

Cons:
- low margins
- If you choose the dropshipping way you'll get a headache with facebook bans, restrictions, shipping times ( until you find a good agent of course )
- Supply chain - if you scale and plan to have stock - you'll soon realize how difficult is to always have stock and planning ahead

Agency
Pros:
- High margins
- $0 budget to start ( if you already have the skill that you want to sell )

Cons:
- The reaching out part and getting leads is a headache, you'll get a lot of rejection but if you build the right systems and find the right people you can automate that.
- Hard to scale. If you want to scale you need to deliver result and if you want to deliver result you need to hire good people. You will focus more on the top of the funnel and getting new clients and let your team with fullfilment
- You need the have a team. If you plan to scale you will need to get comfortable with big team 9+ memebers. This will evetually lower you margins because if you want the best you need to give bigger payouts.

If you have more pros and cons to those businesses please comment below. Of course I know people that build $1M agency but I know people that build $1M ecom brand as well. If I'm asking both of them the agency owner wil tell me all the benefits to start an agency and the ecom brand owner will tell me to start an ecom brand. There is no right business model but there is the right business model for you

What will you chose betweend those 2? What business models you think are better to start other than these 2?

1. Dropshipping is a terrible business model.
2. Agency - do you have an established channel of getting customers?

Depending on your skills and interests both can be great. But both of them have one thing in common: Marketing.

Without proper marketing skills, you won't get clients/you won't get sales or traffic. With an agency, you are selling a service. With eCommerce, you are selling products.

I would go with eCommerce.

Agency, dropshipping is so saturated and a terrible business model

Sartre said:

1. Dropshipping is a terrible business model.
2. Agency - do you have an established channel of getting customers?

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Why would you say that dropshipping is a terrible business model? I have friends that do really well and taking home mid 5 fig monthly

Agency

Depend on your skills.

I would choose Agency as a business model , the reason is in almost every business where there is so much competition it's really hard to sell your product but if you keep doing it some how you will make contacts and customers

Andrew212 said:

Ecom
Cons:
- low margins

Agency
Pros:
- High margins

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This doesn't have to be true. In e-commerce you can sell a product with margins way above 15%. This heavily depending on what you are offering; high-tech solutions, primarily software, are notorious for high margins hence the multiplier on all tech companies. An agency in a competitive niche will have an EBITDA between 10% and 15% (speaking for my country here) especially when you start hiring staff.

msaqib_301 said:

I would choose Agency as a business model , the reason is in almost every business where there is so much competition it's really hard to sell your product but if you keep doing it some how you will make contacts and customers

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Makes sense because if there's so much demand in ecom you can have services around this niche such as email marketing

Agency for Sure

Andrew212 said:

Makes sense because if there's so much demand in ecom you can have services around this niche such as email marketing

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Yes absolutely agreed