These 7 online business models are all used in various business that I have seen and even considered at one time or another. All of these have the potential to be operated exclusively over the Internet.
Publisher
[Advertising Based Blog]
This is something you are probably familiar with already. What you do is set up an account with Google or some other ad provider and then start writing blog posts and other content. Over time you hope to create an audience who are mainly interested in what you have to say. You earn income when users click on the ads on your blog. Generally you can expect 1% of people to click on your ads – you will be paid a few cents each time a reader clicks an ad.
This is like publishing your own magazine and the business model is essential the same as a magazine. You must be able to either drive a lot of traffic to your site to make a significant income or have many sites that overall have a significant audience. When you are doing this you are essentially a publisher and you must be willing to write blog posts every day. Some blogs publish articles every hour.
Salesman
[Affiliate Marketer]
Affiliate marketers sell other people’s products for a commission. Usually, an affiliate marketer will earn between 5%-35% when they can entice someone to buy a product. You will see people doing this with Amazon books and information products like ebooks and online courses. Some affiliate marketers have their own websites and audiences and will only sell items they believe that real value to their followers. Others simply buy Google ads to sell products directly based on keywords.
The nice thing about affiliate marketing is that you can get started fast without making your own product. It is easier to generate income with affiliate marketing if you can match the right audience to the right product.
Helper
[Information Products]
Information products are things like ebooks, courses, videoes, audio and tutorials of all types that help people achieve some goal. When you are selling information products you are essential in the business of helping people. Generally, you must identify a niche of people who would benefit especially from your knowledge. Then you must find out what they want and then sell it to them. This business model can earn a decent income because there are high profit margins. The biggest cost is that you must carefully cultivate your audience and this can take a significant time investment. You must be willing to make your best effort to help your audience members out, both with your products and simply by interacting with them.
Hired Gun
[Consulting]
If you have any skill that you can use remotely with a computer you can sell your time as a consultant. You should find out what you want to do and how much you can expect to earn based on the market. Something you can do is list yourself on sites like elance and odesk to find one-off projects. As you successfully complete projects you can demand higher revenue. In this business model you will want to thing outside the box and also pursue local contracts since many people will place a higher “perceived value” on people they can work with in person. You may also want to pursue things like speaking or teaching courses to both increase your status as an expert and to diversity your income.
Store Front
Ebay Fanatics
You can use websites like Ebay to sell physical products. I am not talking about the junk from your garage, but stuff that you have either had made or bought wholesale to redistribute. Third party companies can be contracted to design, produce and even mail items out directly to your customers. This is an interesting alternative to a typical web-based company that tends to sells more abstract products.
Software Pusher
[Indy Software Publisher]
Mac users have a long history of buying software that is made by one or two person companies. This software is distributed via websites and purchased with shopping cart systems. This model can be applied to Linux and Windows users as well – the trick is to design a well polished software product that has all the trappings you would expect from a retail product. IE: professional graphics and UI, well thought out documentation, support and so on. It also helps to targeted an unserved niche or to provide a unique solution a large software companies are unlikely or unwilling to provide.
Mobile Software Pusher
[App Store Junkie]
This one is like the software pusher above except that the products are meant to be used for mobile devices like the iPhone or Android. The dynamics of mobile software development are different enough to warrant their own discussion.
The biggest difference from a typical indy software publisher is that mobile software developers have to play by the rules of the company that owns the platform and so lose a bit of the control they would otherwise have. Another difference is that mobile apps are much simpler than their desktop counterparts; one person can produce more apps in less time and takes risks a desktop developer may not be able to take.
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Web applications/cloud computing are a bit different than software for the desktop or mobile, so would fall into another category of an online business.