This guide presents online business model types. It describes how to create an online business or expand an existing one in the online world.

Internet Marketing Basics

Internet marketing is the foundation of a successful online business model. Internet marketing is a set of actions to prepare and promote a business.

Internet marketing started when people were finding businesses or solutions through internet. This need motivated businesses to create an online presence.  Later on, everyone started learning internet marketing to promote and sell products and services.

Some clear internet marketing benefits for business became clear, like:

  • No limit on profit potential since there is worldwide access by billions of consumers.
  • 24 hours/day online business running on autopilot.
  • Minor expenses to start and maintain an online business
  • Automation to reduce costs while growing sales

Online Business Model Types

An online business model is a form of making money on the internet. Amazon is an example with a strong influence for online business setup. They sell everything and everywhere with many forms of internet marketing.

Below are popular business types of making money online on the internet. You will find information and advice on how to choose the best online business model for you needs. Of course you have to spend a thoughtful time before you take your decision.

Basic Business Profile

The easiest way to present your business is with a website creation. Then it is a matter of adding a logo, business details and some products and services.

People can find an online business by getting a business website address. This is possible through business cards, flyers, emails and social media marketing. Many people find online business through an internet search or with paid PPC ads. PPC marketing brings the most targeted traffic for immediate sales and services booking. PPC Ads don’t cost a lot but takes some time to learn it.

A business only needs to buy a domain and hosting through a hosting provider. The hosting provider control panel allows creation of almost any website type. The website setup process takes a few minutes to install. Then it is all about adding company details, a profile and a good reason to get people to contact you.

By following a step-by-step guide on how to create a website, anyone can do a basic website setup. It’s important to know that a WordPress platform is the most complete solution to start with. For consumer products only, a better choice will be a commerce platforms. A section about eCommerce describes most popular ones.

Blogging

Blogging use is to express a thought and can also promote products and services. It is becoming popular for business to utilise content marketing through a blog. Content marketing is an indirect way of selling and it is becoming a trend.

Blogging helps to create authority and thrust. A blogger with good copywriting skills can attract peoples attention. If the blogger knows well a topic, then people will react resulting in a contact, subscription or sale.

An important blogging benefit is the long term free website traffic. Doing that requires proper use of SEO keywords. Good SEO knowledge improves search engines ranking, resulting in continuous website traffic increase.

People visit a blog when they find the right article they have been looking for. Then, it is a matter of guiding them into an action.

WordPress is the most popular platform for blogging.

Affiliate Marketing

With affiliate marketing business promote products and services through external promoters. Promoters or affiliates is the same thing. The affiliate gets a commission for every confirmed sale. Sales are trackable through a dedicated platform.

Affiliate marketing is profitable for both business and affiliates. A blogger or anyone with a social media account can also be an affiliate.

Affiliate marketing companies also exist to help the affiliate marketing process. They act between a business and an affiliate.  Clickbank is such a type of company and is very popular. Affiliates find in there products to promote. Business add their products there for promotion.
Affiliate marketing further benefits:

  • Immediate sales startup
  • Visitors conversion to subscribers
  • Targetted visitors for sales and not for shopping therapy..
  • Repetitive sales through emails and remarketing
  • Expensive products get a higher commission

Amazon Affiliate

Amazon sells everything, everywhere and their products reviewing system helps a lot. They also provide a commission to a promoter that sells their listed products. The sales potential is great. The only need is for promoter is to display the product on their website and persuade people to click on it and buy it. Promoters don’t have to setup website payment processing. The sale happens within Amazon platform.

Content Marketing

Content marketing is the art of writing an article in a way to persuade people to buy something. It is an indirect way to influence people to get them to buy. Content marketing articles are more formal with the intention to provide great value.

‘Content is King’ is what describes best content marketing. Professional copyrighting and SEO optimisation in this case is very important. This way they get high search engine ranking in return for a high traffic volume.

Drop Shipping

It is typical for a retail business, online or physical store to buy products and then sell them.

With drop shipping, there is no need to buy products. Therefore, there are high costs for drop shipping online business startups. They have products on a website with images, prices, and descriptions they get from the supplier. When a customer orders a product, then the drop shipping company gets that product from the supplier. They either buy it upfront or have a credit payment deal with the supplier.

A similar example is with some books ordering forms from Amazon. If they get the order, then they print it and post it.

Drop Shipping Benefits

Drop shipping benefits are significant. But there are also disadvantages like time and cost to get a product from a supplier. Continuous product availability from suppliers is also an issue. The most important drop shipping benefits are:

  • No initial physical product buying cost to start a business. It only needs a website and a business address.
  • Can have thousands of products with available no cost to sell, to be competitive.
  • Can compete with prices, for less profit but more sales.

eCommerce Business

Ecommerce websites are expanding in a fast rate. All business needs to add an electronic form of selling. It is a one way destination route and no one can stay off it. Any business or shop can get a professional ecommerce website with a minor cost. The long term financial benefits are great.

It doesn’t mean that everyone can make money by just starting an ecommerce website. It needs a lot of research on website features, what to sell and promotional channels. Success depends on getting highly targeted potential customers to buy very interesting products.

eCommerce Business Benefits

  • Anyone can get a website.
  • No need to have a store. Can start one now after you make extensive market research!
  • Website cost per month, per commission or a few hundred $.
  • Not limited locally since selling can be worldwide.
  • Many low cost selling channels and methods
  • Working hours flexibility.
  • Can do it even from your bedroom (almost..).

eCommerce Issues to Consider

From my personal experience since 2009, it’s difficult to set up well an ecommerce website and get sales growth. It is best to get a true professional to do that for your. This way you also get answers for everything when needed. If you build one yourself, the benefit is full control, fast actions and must fewer costs. ecommerce is all about balancing website upgrade and promotion costs versus profit margin. Most important issues to consider before starting an ecommerce store.

  • Products sell easier if they are very interesting from popular brands.
  • Professional pictures. This is very important. If you sell clothes get ghost photos or learn about ghost photography. It is cheaper and faster to get ghost product photos.
  • Suppliers products photos.  Get ready made professional photos from suppliers. This will save endless hours from photography sessions. I had a hard time doing photography myself, fitting clothes properly and getting professional model. It takes money, planning, time, time and more time…
  • Extensive variety or products. Eshops with great variety have an advantage over other shops with less variety.
  • Profit margin. Low cost product leave a low profit margin. Aim for more than 40$ -50$ per product to compensate for PPC marketing costs.
  • Start promotion with online product catalogues and AdWords to get fast sales and profit. Organic visitor traffic is less profitable vs paid marketing but costs nothing.
  • Code changes can cost a lot of money. Select the right platform and theme to get max amounts of features.
  • Buy a professional SEO optimized theme with many reviews for 100$. This  is very very important and lost cost advice.

eCommerce Website Platforms

  • Magento. Professional free and paid version solution that can cost for full features. Higher programmers cost for custom coding.
  • Prestashop. My favourite. Totally free with no limits. You will need to buy a few modules like xml export and pro one page checkout.
  • Excellent forum community with solutions to everything if you have time to spend.
  • Shopify. No initial cost but keeps a commission per sale. It offers user friendly pro marketing features.
  • Other free platforms: There are many other platforms. Find which offer more themes selection in Themeforest.net and other sources.