Internet Business Models

There are two ways to make money on the Internet: sell your own products and services, and sell other people’s products and services. As John Reese says, the smart people do both.

For the purposes of this discussion, I will consider “your” products as an order that you fill, even if they aren’t actually “your” products. If someone else is filling the order, we will consider it a sale of “other people’s” stuff.

But within these two high-level concepts are several business models you may wish to employ. Here are some of those models:

Selling Your Own Products

Selling Physical Goods
It sure seems to work for Zappos, Amazon, and others. And it can work for you, too. Consider opening an online store. If you need help finding a wholesale source for the products you would like to sell, check out Worldwide Brands.

Selling Digital Goods
You may wish to sell information products, where the buyer receives digital copies of your product (think iTunes). No shipping and handling, no inventory, warehousing… not a bad idea.

Memberships
Many kinds of websites lend themselves well to a membership model, where subscribers pay a monthly fee for access to the content of your site. You may run a community, have special content, or provide a service for your members. This is sometimes called “continuity.” Some marketers would argue that if you don’t have some kind of continuity program in your business, you don’t really have a business.

Advertising
If you have a lot of great content that attracts lots of visitors, you may want to sell advertising on your site. Advertisers may want to buy per thousand “impressions” of their banner ad. Alternatively, you may wish to charge “per click,” as in when your visitors click on an ad. This is the way you can make money through the Google Adsense program.

Selling Other People’s Products

Affiliate Marketing
This may be the ultimate “lazy man’s” way of making money on the Internet. You will promote other people’s products. When leads that you have generated make a purchase, you will be paid a percentage of the sale.

Drop Shipping
If you would like to sell physical goods, but don’t want to deal with the warehousing, fulfillment, and shipping hassles, you may want to consider working with a source that will drop ship for you. This is when you forward them the order information, and they ship the order directly to your customer.

Extra Credit
One bonus question; not that this is a quiz: What can you do to combine business models for an end-to-end business? For example, creating your own product, selling it, attaching a continuity  program to the backend of the sale (maybe with a free trial?), and then making appropriate affiliate offers to that list.

Think about it. Just remember, you’ve got to walk before you can run. Don’t try to take on the whole world at once. Get raving fans doing just one thing well, then add on an element and grow your business step by step.

Tagged as: business, E-commerce, Entrepreneurs, Internet Marketing