There are several different ways of starting a business and website. Making money online can be accomplished in multiple ways. Most businesses that make money online fall within these below business models.
Some business models involve more work than others, but also yield potentially larger profits. The strategy of growing a business and also expectations depend on the business model and resources available.
To learn more about a business model or starting a business, talking to experts always helps. Business consulting services are a great method to gain the necessary details prior to making larger investments or decisions.
Types of Websites and Business Models
One of the most popular methods and online business models is the advertising model. Organizations rely solely on advertising dollars. Websites based on the advertising model, make money through selling advertising space and opportunities throughout the website. After a website is marketed for a while and generates a certain amount of traffic, advertisers will pay to become visible three if the website is relevant to their business.
Website owners make money through charging for cost per impression, cost per click, or/and a fixed cost. Most common advertising method is contextual advertising, which delivers targeted ads based on the content around it. This business model is most effective with high website traffic.
The brokerage business model is a very effective online business model. It again focuses on the technology and website, not the products or services. Similar to the Affiliate model, the Brokerage model brings sellers and buyers together. This type of model brings the buyer and seller together through the transaction and some service enabling the transaction.
In exchange of enabling the transaction and bringing the two parties together, the Brokerage business earns money from charging a fee for each transaction. It is more difficult to setup these types of websites and can involve a higher cost.
The merchant business model is common. All e-commerce website companies fall into this category. All online retailers of products and services use the merchant model. Some companies have brick and mortar stores as well as e-commerce websites, while others just exist online.
A merchant business tends to be quicker profitable for business owners. A company can reap the rewards along the way and from the beginning. With each sale, money can be earned vs. waiting for larger amounts of traffic as with some business models. There is much more work involved with the merchant business model since products and services are owned by the business.
This model is similar to the old fashion Magazine subscriptions or newspapers business. A website business with the subscription model charges for access to their information and areas of the website. Membership websites have over the years increased in popularity.
The subscription model is very popular with websites that provide an online service or solution. Rather than charging a one time fee, customers sign-up and pay a reoccurring fee as long as they want to use the website’s services or solutions.
This model is simple. Website owners and operators charge for information such as eBooks, PDFs, and other downloadable information that people purchase. Selling information can be lucrative, when it is popular and people are willing to pay for it.
Information business is popular with people and organizations that have knowledge others are willing to pay for. Authors and marketers can create the content once and sell it over and over again for profit.
This business model is used for websites that build a community of users who interact with each other. A community around a certain niche or market or topic. Companies using this model charge a small subscription fee for certain premium features or added functions, while most of the functions tend to be free.
The Community model is similar to the subscription model aside from the fact that users are more invested and involved into the community website. A business makes money by growing the community, users, and customers of the premium features.
While other business models such as the advertising model earn money through advertisers, the affiliate model rewards the business owner each time someone clicks on the promotions, ends up buying, or filling out an online form. The affiliate website makes a percentage of money from each transaction it is responsible for.
Affiliate business model is popular since an individual or company does not need to invest much into the offering. The services or products being referred too are not owned by the affiliate website. This can be a rewarding business model with lower start-up costs. For this business model to work, the affiliate website needs to have lots of traffic.