The virtual merchant model is used by online retailers that operate over the Internet only. FreshDirect is a
small business that offers fresh food and brand-name groceries for home delivery in New York. Amazon is
another example of a virtual merchant.
“The business model spells out how a company makes money by specifying where it is
positioned in the value chain. Some models are quite simple. A company produces a good or
service and sells it to customers. If all goes well, the revenues from sales exceed the cost of
operation and the company realizes a profit.