HERE’S How Newegg Makes Money in 2022 [Full Business Model]

People hardly ever visit a local supermarket to buy computer hardware and top-quality electronics items. That trend has changed a little bit since eCommerce giants, such as eBay, Amazon, etc. became popular. Buyers can find good products on those eCommerce sites, but a specialist is always a specialist! 

Newegg is a dedicated marketplace for buying computer hardware parts and consumer electronics products. This platform was established to sell only PC hardware and other related products. 

Today, it is a fast-growing marketplace where thousands of users find items missing on other popular eCommerce platforms. This post reveals the Newegg Business Model and how this platform makes a profit. 

What is Newegg?

Many people can’t understand why an eCommerce platform specializing in selling computer parts use the “Newegg” brand name! Founders chose this name because the egg is believed to be a symbol of the new beginning and immense potential. Thus, this company got this amazing name. 

Newegg emerged as the leading marketplace for buying and selling computer hardware and electronics products. This company later added several more categories, such as books and cosmetics to entertain more customers. 

This platform stands out as a trusted source for high-quality electronics items. They do not allow any newbie to sell computer parts or electronics items. Their tough screening process reveals the true quality and potential of sellers. Thus, only top-quality and reliable items appear on Newegg’s list. 

Sellers choose this platform to sell their electronics goods because it offers better commissions and conditions. Newegg is currently serving in more than 50 countries and it got over 36 million consumers. Thus, it is one of the fastest growing online marketplaces for PC hardware and electronics items. 

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Newegg History

Fred Chang had founded this platform in 2001. He was Newegg’s CEO till 2008 and then decided to serve as a member of the executive committee and a member of the board of directors. Tally Liu succeeded Fred as the CEO until he stepped down in 2010 and then Chang gained his old position in the company. 

This company founded Rosewill to sell household products produced by numerous manufacturers in 2004. Newegg became one of the Top 10 online Retailers in 2005. Internet Retailer Magazine enlisted this firm as one of the leading eCommerce platforms by assessing its 2004 revenue. 

This firm was growing quite rapidly because its revenue crossed $1.3 billion in 2005, which was 30% more than in 2004! It introduced NeweggMall.com and Newegg.ca in 2008 along with NeweggBusiness.com in 2009. 

It gained 234th position on Forbes America’s Largest Private Companies list. The Newegg Marketplace was introduced in 2010 and the company’s revenue was over $2.5 billion the same year. It had employed over 1500 employees in 2010 and it was continuously expanding its service region. 

Newegg started sponsoring PC game events, technology events, and many other events to draw people towards new technologies. It continued to grow and introduce new features and products. Today, Newegg is one of the world’s most popular eCommerce platforms. That’s quite an amazing journey for a company founded by an immigrant! 

Newegg Business Model

Newegg has become the leading eCommerce platform to find and buy computer hardware, accessories, and electronic items. It has been serving tech enthusiasts for the last two decades. Now, this company has spread across the globe. 

Newegg acts exactly like a marketplace where sellers meet buyers. So, both sellers and buyers run this platform and it gains profit by offering a secure destination to buy and sell goods. 

Newegg Consumers 

People looking for computers, laptops, PC components, electronics, gaming devices, networking devices, automotive, health, and household tools use Newegg to find the best quality items. 

It is a platform where thousands of sellers enlist numerous products under different categories. You can consider Newegg a huge store where all sorts of electronics products are available. It offers space and endorses products to help resellers find customers. 

Millions of consumers choose this platform because it promises to deliver high-quality goods. There are many global and local eCommerce platforms to buy electronics items. However, the platform never assures quality. Consumers need to spend several minutes checking reviews and product features to find something useful. 

Newegg carefully screens resellers before allowing them to sell their goods on its marketplace. If a brand or retailer fails to meet the quality standards of this platform, he won’t get a chance to sell products. That’s how Newegg operates and delivers reliable goods at reasonable prices. 

Newegg Retailers

Being a tech-focused eCommerce giant, Newegg invites retailers to sell computer parts, electronics, gaming, networking, and entertainment items. It has also started selling non-electronic goods recently. So, you can check categories and enroll yourself if your goods are in demand. 

The world’s leading brands, including Lenovo, Dell, Office Depot, and Dyson are listed as sellers on this platform. The presence of an established brand does not affect the business of small vendors. 

Anyone can become a seller on Newegg. It has helped many small and medium-sized businesses selling goods across several countries. Sellers can pick a standard subscription plan or a Professional or Enterprise subscription to sell goods. 

Premium plans cost affordable monthly fees and come with many amazing perks. Vendors need to sign up and provide the required information about the business. A Premium subscription assures better perks and long-term support from the marketplace. 

Thousands of consumers use Newegg to find all sorts of products. It is the vendor’s job to promote his products and draw the buyer. A well-marketed and perfectly-described product always draws buyers and generates good revenue for retailers. Therefore, it is important to promote and describe the listed products to draw some attention. 

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Newegg Subsidiaries

Newegg’s services are not just limited to its marketplace. It manages three more platforms to support new businesses and deliver high-quality products. Businesses acquired and managed by Newegg include:

Rosewill Inc.

This platform was established by Newegg in 2004. It was founded to build and deliver top-quality technology products. It has also grown and become a popular eCommerce platform to buy a computer, gaming, IT, and household items.  

It used to provide computer components and technology items in the beginning. However, the product line has grown with time and Rosewill started serving as a regular eCommerce platform. It is still not as diverse as Amazon, but something better than the Newegg marketplace. 

Rosewill adds a lot to Newegg’s annual revenue and maintains the company’s position as an eCommerce giant. This platform is also entertaining millions of consumers and thousands of trusted retailers. That’s why it gains thousands of qualified leads every day. 

Newegg Business

Newegg is the world’s leading marketplace for buying IT supplies. It has introduced Newegg Business to collaborate with businesses requiring IT products frequently. It is a great opportunity for business organizations to rely on the most trusted marketplace for reliable and durable IT products. 

SMBs, public sector companies, institutes, enterprises, and system integrators can join Newegg Business. Flexible payment options, self-service tools, additional rewards, and an inventory of thousands of IT products make this partnership quite beneficial for businesses. 

Newegg has gained many large clients through its Newegg Business program. It continues to draw more clients and entertain their demands. 

ABS

Advanced Battlestations or ABS is a subsidiary of Newegg Inc. It is a dedicated platform established to serve gamers. ABS helps customers create the best PC setup for gaming. It has been introduced to entertain gamers for their gaming PC, networking, and technology demands.  

Newegg is known to organize and support eSports events. This platform sources gaming products from the world’s most trusted brands. It builds powerful PC systems to deliver better gaming experiences. 

Many professional gamers and renowned streamers rely on Newegg’s ABS platform to buy high-quality products. ABS promises to deliver fast loading times, high frames, and depended immersion. That’s why it got numerous customers seeking the best gaming PCs, accessories, and components. 

How Does Newegg Make Money?

Newegg generates revenue by offering premium membership and charging a commission on product sales. This platform has been around since 2001. It has sold millions of goods and helped numerous vendors establish their businesses. 

Vendors can join this platform for free and start selling goods. However, a premium subscription assures faster success. Therefore, most Newegg vendors are premium members of this online marketplace. 

Newegg subsidiaries also play an important role in increasing this platform’s annual revenue. Rosewill, ABS, Newegg Business, all the subsidiaries along with logistics, and other agencies generate huge profits for this company. That’s why Newegg is spreading pretty fast across the globe. 

Why Do Consumers Choose Newegg Premium Subscription?

Newegg does not force vendors and customers to become premium members. However, clients choose to enjoy perks associated with Newegg Premier. It offers the following benefits to customers:

Fast shipping

Premier members can expect their product delivery within 3 days. This facility is available for customers across the globe. Buyers, who do not like to wait several days, choose to be premium members and take advantage of fast shipping. 

Additional accounts

Premier members can add family members and friends so that they can take advantage of premium services. This strategy has helped Newegg find numerous new customers without investing a lot of money in marketing! 

Easy returns and rush processing

Suppose buyers do not receive the right item or decide to replace it with something else, they can apply for free returns. This facility is only available for premier members. Besides, rush order processing is another perk that comes with paid membership. 

Special alerts and executive deals

This platform frequently brings beneficial deals for premier members. Customers find it helpful when they get better discount offers than ordinary Newegg users. Besides, this platform sends executive deals through emails. Buyers get better price offers on items they have recently searched. 

Dedicated customer support

Newegg provides dedicated customer support to its premier members. Buyers can call customer executives and resolve all the conflicts on a call. It is quite convenient when compared to mailing or waiting hours on call. 

Why Do Vendors Choose Newegg Premium Program?

Facilities for standard vendors and premium members are almost similar on Newegg. However, premium members get a 5-10% discount on Newegg Fulfillment and Shipping Label Services. 

This platform allows 5000 listings to standard members. Professional membership comes with 25,000 listings and Enterprise membership has an unlimited listing facility. Besides, professional and enterprise membership plans offer better marketing opportunities. 

Conclusion

Newegg Inc. is the best destination to discover the latest tech equipment, accessories, and gadgets. It is making a profit by promoting products, earning commissions, and through its premium membership plans. 

Millions of regular customers deal with thousands of vendors on this platform. Newegg generates huge revenue through product commissions and additional support it offers. That’s how it became one of the leading eCommerce companies in the world.