A business model is a way a company or a person generates revenue and makes a profit from the operation of his or her business. The effectiveness of a business model is often measured by gross profits.
For online businesses, the following are the most common online business models:
- Sell your product – Businesses manufacture or acquire physical, shippable products and market them online. Businesses can sell their products in their own online store, through an auction site, or as a third-party seller in an online marketplace that carries products from different vendors. Amazon is a great example of an online marketplace. When you sell products online, you have the distinct advantage of not having to put up a physical store. Additionally, you have wider visibility than you would in a brick-and-mortar setup, as anyone with a computer can find you. However, some tricks to manage by selling online is that you may need a warehouse to store products. Shipping can also a challenge. Some products are perishable, and if they do not move quickly from the warehouse, there could be spoilage and loss.
- Sell services online – Just as you can sell products through online stores, you can also sell services. Services could vary from digital services like SEO and website design to more “traditional” services like consulting. Selling services online allows you to be visible to anyone with internet access.
- Sell information/digital media online – This is a common model used by Internet marketers, writers, and designers. After information is purchased, it can be downloaded. For example, you can sell music, building blueprints, or other digital downloads.
Once an entrepreneur decides on an appropriate business model, they will need a solid content strategy to attract search engine traffic. This is not a “one-and-done” pursuit. It’s imperative to revisit the strategy to make sure it is working well and properly advancing the chosen business model.