Choosing a Business Model for your Online Business
The Internet is grounds for all types of business models, both new and old. As the Internet evolves so will Internet commerce but one thing is certain, tried and true models will always be relevant. Lets take Auctions for example. The web has really popularized this form of brokering that has touched almost every century, every industry and every nationality occurring as far back as 500 B.C. You know eBay right, well that's one example of a brokerage business model. Lets touch on a few real fast.
- Brokerage: In the simplest sense this business model brings buyers and sellers together to help facilitate transactions. Examples: eBay, Paypal
- Merchant: Web based store front that offers goods and services. Examples: Amazon.com, Bestbuy.com and all the way to yourlittlestore.com
- Advertising and Affiliate Model: These models are closely related in the sense that the website provides content and services usually free with the sole source of revenue coming in the form of advertising banners, text or image Adds. Examples: Yahoo.com, Google, and yourblog.com
- Community Model: Revenue is based on the sale of ancillary products and services or voluntary contributions. Revenue may be tied to contextual advertising and subscriptions for premium services. Based on loyalty and the users investment in both time and emotion the Internet is well suited to the community business model as seen in today's rise of social networking websites. Example: Myspace, facebook, and yourcommunity.com
- Subscription Model: Subscribers are charged a periodic daily, monthly, or yearly charge for the particular set of services a website provides. This business model is commonly seen with a free area and a members only area. Examples: Netflix, Internet Service Providers, Gaming, Content driven (pictures, video, audio, and downloadable software/tools)
OK, so now you might be thinking this is going to be hard but I assure you, I'm going to point you down some very simple paths. Once you start down the path you will start to understand why the path goes where it does. When you have your foot in the door of your business you will start to see how its run and it will lead to questions. With the questions will come curiosity and you will suddenly find yourself googling terms you never knew existed. As you evolve so will your business. To put it another way, I'm giving you blocks before you knew anything about building. Then you discovered Lego's on TV and imagined building a dinosaur before you had Lego's. Now your Lego's are bricks and with bricks, you can build dreams.
OK.....maybe just dream houses, I got a little carried away there, haha, so moving on then. Lets put our business models into sound business ideas. Which of the following sounds like you.
- I want to sell on eBay
- I want to sell a product/products but on my very own website domain
- I want to blog about a paticular subject that I am both knowledgable and passionate about. In doing so I would like to earn money.
- I want to build a Social Networking Community
