If you are looking to generate an income online then it is very important to understand what type of online business model you would like to create for yourself.
While there are many types of businesses that can be created I will share five popular online business models people use create an income online.
Blogs are websites designed for social interaction.
Typically a blog is a way of communicating with an audience (usually, but not always readers) about any and everything from technology, cooking recipes, and daily activities, to bodybuilding and the latest news.
Information can be shared on a blog using text, video, and audio.
These type of websites can also use social widgets such as Facebook, Twitter, and YouTube to share and spread their content.
Blogs usually allow individuals to comment, share ideas, and communicate with the creator of the site or that sites team directly through comments and email.
They also allow individuals to communicate and share ideas with one another and opinions with one another.
In online business blogs are usually created to build an audience and educate them in a way that helps them improve a certain aspect of their lives.
Over time products and services can be offered to help the readers and community of the blog move closer to a goal that the community is striving for.
Blogs have the ability to generate income through software products, affiliate links, ebooks, educational material and other forms.
Membership sites can be a great way to build an income because monthly and/or annual payments can be made to generate an income on a continuous basis.
This can be very appealing as a business model because you aren’t selling a one time product but creating a continuous revenue stream which requires far fewer people to maintain a good source of income.
Membership sites are usually paid monthly subscriptions that allow the person purchasing the membership to become part of a community, gain valuable information on a topic that they consider important, learn valuable skills through multimedia such as video, text, and images, and gain exclusive offers and promotions.
A niche site is a website designed to target a very specific market.
Most niche sites focus on a specific product/service created to satisfy that markets particular needs.
These sites are usually low maintenance and don’t require as much updating as other business models.
Niche sites tend to gain most of their traffic through ranking well in search engines for specific keyword terms, and use short copy to communicate the importance of their product to try to convert their prospects into buyers and email subscribers.
Keyword research is a must for those looking to create high traffic niche sites that generate income.
Niche sites can also generate a decent income from placing within the top 3 positions on search engines such as google and using Adsense and advertising to collect revenue through ppc advertising.
Some niche site builders use this model as a set it and forget it online business model since it doesn’t require continuous content generation or marketing to generate a continuous income as other business models do.
Review sites are websites that post reviews about products and/or services to allow visitors to make better buying decisions for whatever they are trying to purchase.
These sites offer detailed information about each product/service and list of pros and cons of each to help the buyer figure out which product/service works best for him or her.
What makes these sites so appealing is that most people looking at review sites are ready to make a purchase and are looking for the best product for their situation.
A lot less work is involved in converting prospects into buyers.
Review sites are often monetized through affiliate links and paid or ppc advertising.
Most of the work on the site is creating product reviews and using SEO to improve ranking in search engines.
You can also use other forms of marketing to get the word out for your review site if you are so inclined.
E-commerce sites focus on buying and selling products through an electronic medium.
Some good examples of e-commerce sites are Ebay, Amazon, and Macy’s.
These type of sites can produce large amounts of income, but tend to require the most work to build and maintain.
Storage (fulfilment services), shipping and delivering, product refunds and a whole list of other responsibilities fall under running an e-commerce site.
Communication with buyers and sellers is vital, and gaining traffic and converting prospects into buyers also plays a primary role in e-commerce.
Unless you have a dedicated staff you may find yourself spending a lot of your time running and maintaining this type of online business model.
e-commerce can be a great business model if you understand how e-commerce works and are able to shift responsibilities to other staff members to alleviate your time consumption, but if you aren’t familiar with e-commerce you can always get your feet wet by practicing and getting familiar with websites such as Ebay, and Amazon.
Can you think of any other business models? Put them in the comments!
This post is part of the online business series.