Building Your First Online Business Model
For quite some time, building an online business model seemed to be very decentralized, with no strong template or one-size fits all approach. The latter is still very much true: it’s hard to create a status quo that will work for any particular type of online business. Still, we are seeing a broader structure begin to form, which allows to us categorize most online business models into three different categories. For those needing a viable online business model, continue reading below to find out what models are considered the most popular and how each could perform for you.
Made For Web
This is a common business model that revolves around the premise of a website, blog or store that bases its entire existence online. All viable monetization will occur online and can be the result of a direct product sale or through affiliate earnings. Many referral sites – such as those advertising great hotel deals – use this model, earning revenue through their referrals and keeping their business based solely within the internet. Many of these businesses do not charge people to list items, but rather charge them once a referral or transaction has been processed.
This model is perhaps the most popular of the three, leading to many webmasters pinging networks like Facebook, Twitter, LinkedIn and Pinterest in addition to their traditional website. Promoting a product is vital these days, and a simple web presence just won’t suffice. Brand extension takes the concept of your website and distributes it throughout social networks and other areas where sharing and viral concepts exist. Engaging with your audience is a key element of the brand extension model, and you will not succeed here unless you use a variety of social networks to promote your product or service.
Using this business model is more complex and generally requires a larger amount of resources. Essentially, your business model is one that seeks to perpetuate the branding and experience of the business through online and offline mediums. For example, a former middle school that has been refurbished to exist as a co-operative and art gallery may seek to sell its works online through one medium, and subsequently offer lodging opportunities for those who enjoy the works and want to combine the co-operative living style with an exhibition of the art for sale. A transmedia business model seeks to use all forms of social media while also combining traditional, often physical, forms of interaction for customers.
Which is Best?
When pinging networks in search of the best business model for you, considering the objectives and the amount of difficulty involved are both important. Made for web business models are popular due to their low startup costs and minimally invasive approaches, while a brand extension model requires more time and resources. Transmedia business models are the most complex, and are usually considered by those who already have tangible assets or are dealing with a large online and offline web presence. Consider carefully what your business will be able to achieve in the short-term, and make the best assessment of which business model works for you.