Online Business Models.

I like to think in the Solar System. Everything works so organized and precise.

We have to think of business model the same way. An organized way to earn money!

In order to have a wide understanding of all opportunities out there, we need to know the most common business models on the web. This site is very handy:

I will make a summary of the most outstanding business models in the page, but it will be recommended that you read the whole article!

Brokerage -> (service) Brings buyers and sellers together. Revenue comes through commissions for successful transactions, featured products, and sometimes fees for publishing, but because everyone loves free stuff, it is best to only charge for successful transactions.

example: ebay, craiglist, mercadolibre

Advertising -> (service) You run a website that can display ads. Your site should be awesome, so that a lot of people would like to visit it.

example: blogs, facebook, youtube, social networks.

Subscription -> (service) You offer something that people want, like any kind of support/help. This model has been used a lot recently. With the “cloud”, instead of you buying a Hard Drive to store your files, you pay a monthly or anual fee to have them in the cloud. Microsoft sells office, but now it offers it as a subscription service.

example: newspapers, magazines, netflix, spotify.

Merchant -> (product) You resell products. That simple, buy and resell, usually you buy big amounts of the product to have a revenue.

Dropshipping -> (product) It is like merchant, with the difference that you do not owe the product, and virtually never have it. You sell the product through your website, but you have an agreement with a manufacturer. So overtime you sell a product, you notify the manufacturer, and they send it to the buyer. It is an interesting way to make revenue, because you never have the product, you forget about storeware cost and products leftovers.

Shopify has a great DropShipping guide, check it out!

Affiliate -> (product) Affiliate is similar to Dropshipping in the sense that you do not owe the product, not have to worry where to store it, but the buying process for the customer is different. In drop shipping, they buyer stays the whole time in you site until you check out. In Affiliate, buyers come to your site and when they want to buy, they are directed to the sellers website. You receive a percentage for sold item.

Amazon Affiliates is the most popular Affiliate-Program. Check it out: Amazon Affiliates

Manufacturer -> (product) If you are the manufacturer of a product, you can use the web to sell it. You can offer it in big or small quantities.


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