3 Most Common Online Business Models


Most Common Online Business Models



Let's say you make the most amazing spaghetti sauce and your friend says that you have to turn it into a business. What business model will you use?

"All right," you say, "I'll make a product and sell it." This is one option, but certainly not the only one.

Take the time to consider the best business model for your new idea and you will dramatically increase your chances of success.

What is Your Business Model? There are three basic business models for an online business.

� Sell your product
� Sell your services
� Sell your information product

All of these models can benefit from affiliate programs. Check out this option for affiliate tracking software.

Sell Your Products Online

Selling products: This may be the first model that comes to mind. Create physical products and personal markets that can be played and marketed online. This can be sold through your own e-commerce storefront, auction sites, or as a third party seller in online malls selling products from different vendors.

Benefits of selling products online: Compared to sales from physical locations, there are several advantages to selling items online. First of all, customers can check your product offerings without having to go to your physical location. Customers can view all your options including things like customer reviews, ingredients list, and recipes or related uses.

Your video and product photos in the Usage and FAQ section can give customers more information than they have in brick and mortar stores.

Disadvantages to selling products online: You have to actually produce something. And the warehouse. Then send it. Physical goods can be detrimental and time-consuming to produce, stock and ship.

And then there are the advantages. With physical goods, inventory control is a challenge in itself. If you make too much and it's booty, you lose. If you produce too little and run out of stock, you lose potential sales and maybe clients will be looking for another place to get more reliable inventory.

There are 9 reasons to put your offline business online.

  • Sell Your Online Services
Selling services "Service is ideal for online sales.There are two basic ways of selling services online."

The site as a Sales Tool: Offline businesses use their site as a sales tool for services delivered offline. Many offline businesses use the internet as a sales tool for their services. Their sites serve more corporate brochures than storefronts. You can find (and qualify) a carpenter, dentist or massage therapist through their online presence. One thing they have in common is that you physically receive all these services.

The site as storefront: Service sold (and delivered) online: Examples of these services include web marketing, travel, and entertainment. All of these items are sold and sent through vendor servers.

Benefits to selling services online: It can be much cheaper to capture customers and prospects through a well-built and marketed website than through traditional offline methods.

Customers receive lots of information about your products and do not have to travel to see their options. A well-built site with lots of content will outperform a weaker competitor at any time. Regardless of whether you use a brochure or storefront platform, this business model is faster and manageable than physical goods sold.

Losses to sell services online: There is a high level of competition - especially for certain keywords. If you're a plumber in Seattle, you may have a difficult time ranking for the keyword "Seattle Plumbers". Google Search generated over 2.5 million results. Therefore, you should consider an aggressive content marketing plan. Read the reviews of Content Marketing for Dummies to consider the factors to consider. Because generally, you do not get a chance to establish personal relationships with your customers, an interesting blog with video plays an important role in this business model.

Selling Online Information 

Sell information: This is the business model of choice for lifestyle designers and internet marketers. When you sell a product or service, jams often develop. Business owners often reach sales levels so they can not grow beyond without changing their business - hiring more staff, buying more equipment, etc. With information products, you are limited only by the capacity of your web host server.

Products are almost exclusively delivered electronically and automatically. Payments and invoices are automatically handled by your shopping cart and payment gateway. You can process one order per day as easy as a thousand transactions.

Sales information can be divided into two categories.

Downloadable Materials: The most downloaded material is an ebook. They range in price anywhere from $ 3.99 to $ 49.00 and up. Other downloadable materials can be audio (MP3), video (MP4) and worksheet. Combine an pdf with an audio/video files to get the Higher Prices.

Membership Sites: These range from online access to newspapers/magazines to full-blown training sites with video, audio and interactive forums behind the gateways of membership. These often charge monthly or annual membership fees. Sometimes they are set to automatically send some content to each lesson such as a new member course - over a period of time. The purpose of this "drip" method is to avoid too many new customers with too much content and get them to pay for longer periods of time.

Benefits of selling information online: Many of these online service vendors provide up to date information that means recurring billing models. With monthly or yearly billing, you need a much lower number of clients to succeed. This business model takes very little maintenance time, once the product is actually created. Because the model is scalable, you can easily handle a large number of clients who buy without hitting the typical congestion that is common in the business of products and services.

Disadvantages to selling information online: Information vendors struggle by conveying the true value of their material. With so much free information available online, it is a challenge to convince someone to pay you for your content. In addition, digital content is easy to copy and steal. You need to think about how to protect your content - and how to handle the theft.

Tips for Selling Information Online

People do not want to pay just old information. Most often the material needs to solve the currently pending problem. Think along the "how" line. If you know how to accomplish a difficult or confusing task, maybe this will be a good base for information products. Do not think that people will pay for information that resembles a typical blog post. Make sure it's comprehensive and solve the real problem.

Examples of selling information products: GoDiaperFree.com (Andrea Olson) OnlineVideoToolkit.com (Jim Kukral) and Inner Circle Facebook Marketing (Mari Smith).

What Every Online Business Needs?

Regardless of the business model you choose, you need a content strategy. Without solid content on your site, you will never attract search engine traffic. And prospects will not have the information they need to make a purchase of information - so maybe they will not make it at all.

What Will Online Business Model You Choose?

So back to your delicious spaghetti recipes. What business model would you choose?

Sell products: Your delicious spaghetti sauce can be produced in volume, packing, warehousing and shipped to pasta lovers all over the world. You can offer different sizes of bottles (individual, family, party), flavors (meaty, spicy, organic) and style (just sauce, with noodles, dried spices). You have to set up the factory or outsource the production. Either way, this is expensive. You need to consider: payment gateway, drop shipper, manufacturing, claims, and returns.

Sell services: Your special recipes can be the basis for an Italian-style catering company. By using a brochure-style website you can market your catering business. Or you can offer home-based training to the restaurant. Maybe you can offer personal coaching to individuals who want to learn to cook authentic and delicious spaghetti food. Setup time and investment will likely be less complicated and less expensive than actual physical products. It should be easier to differentiate your offer by selling a service.

Selling information products: This may be the least complicated (and least stressful) option. You can write a simple e-book that teaches the process and ingredients in your famous recipe. Or you can turn it into a crowded cooking membership site complete with video and member forums. Your content may grow your membership.

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