Part of creating a profitable internet business is also choosing an internet business model that fits your personality and your lifestyle.
This is an important step because if you don’t choose carefully and select the right business model, you could find yourself hopping from one business to another never making any money at all.
Trust me when I say that finding a legitimate internet business model that appeals to your goals, lifestyle and personality will go a long way toward helping you succeed online.
For example, if you’re a stay at home mom with kids to look after, an e-commerce business model where you must sell and package goods might require more time and vigilance than you may be able to keep up with.
On the other hand, if you have specific skills such as writing, organization or financial skills for instance, you could provide a service related business.
For most people getting started on the internet means finding internet home business ideas that stem from their interests, passions and knowledge. From there it’s about applying those ideas to internet business models that won’t cost much to get started, offer flex time and are businesses that most anyone can do, no matter what your background or experience.
Here are a few of the most popular internet business models along with their pros and cons:
- Selling Information products
Creating and selling information products online is a popular yet lucrative business model. With a bit of research and some time in your word processing program you can be well on your way to having a profitable product to sell.
Information products consist of ebooks, courses or guides that you can create and sell online. An ebook can be anywhere from 30 to 200 pages and normally offers a more widespread look at a topic than a short report, but they have the potential for covering a lot more topic areas of the niche. The advantage of eBooks is that they can be priced at higher rates than short reports. Your customers can get the ebooks or guides with an immediate download which is also a big attraction.
eBooks can also be paired with supplemental reports, audios or videos depending on the niche and how many resources you want to offer your customers.
Short reports are typically between 5 and 20 pages. They go in depth on a small part of a topic instead of giving a general overview like most large eBooks do. Typically short reports give someone an actionable plan that they can use to fix a problem or provide a remedy or solution for something. “How to remedy cold sores”, “How to Improve Your Golf Swing” or “How to Lose 10 pounds in 10 days” are all examples of focused short reports.
If you have a larger topic, sometimes breaking it down into short reports and offering them separately is a great way to make more money and establish your authority in the niche. When you create your own information product, you are in complete control of your own income stream.
- Affiliate Marketing Internet Business Model
Unlike creating your own info product, affiliate marketing isn’t about having or selling a product, that’s actually the job of the product owner. Your job as an affiliate marketer is to relate to your reader on a level that helps them make informed decisions about whether or not to buy.
You do this by providing topic information, creating discussion and highlighting the reasons why someone would or possibly wouldn’t need a product. That’s why product comparisons work so well for affiliate marketers, you’re helping readers make decisions based on what a product can deliver and how it can change their life.
An effective affiliate marketer is someone who knows how to promote affiliate products with the right affiliate marketing strategies. In other words, if you can establish yourself as an expert in a niche by understanding your topic, products and customers, those commission checks will follow.
- Membership Sites Business Model
Running a membership site is another extremely profitable business model. The long term income potential for membership sites far outranks many other online business models. For example, with just 100 people paying $20 per month, you’ve got $2K coming in automatically month after month.
Having a membership site is similar to creating an information product, the difference is your information is delivered in more comprehensive, bite size chunks, which most people prefer anyway. For example, you can provide monthly reports on a niche topic, host a forum or offer coaching for a flat fee each month. As an added benefit, you can create an affiliate program for your membership site so that other can send new members your way.
The real success of a membership site is finding a good membership site script to get set up with. A good script will ensure your site is running smoothly by protecting your membership content from public eyes and by automatically processing member payments so that you can get paid each month.
E-Commerce Store Business Model
An ecommerce business is the direct sales of goods or services on the web. The business model is easy, you produce goods or services that you sell to your customers. If all goes well, your sales revenue will exceed the cost of operation and you profit.
An e-commerce business for a defined targeted niche can be a great home business but it also has a lot of moving parts. For example, there is inventory to stock and ship. You’ll need effective, secure order processing and be able to handle customer support issues. For these reasons it’s better to go with a proven e-commerce website such as Yahoo! Stores where they have ecommerce features built in like secure shopping carts, order fulfillment, free domain names, handy design tools, marketing and tracking.
A little simpler e-commerce business model is wholesale dropshipping. You as the merchant buy products from a wholesaler who also ships the products to your customers for you. With this internet business model there’s no inventory for you to keep track of and no packing or shipping for you to do.
In Summary…
Before choosing an internet business model look at your personality and your lifestyle. Consider things like how much time can you devote to your online business? Will you require employees or will you be working alone? Is your goal to simply supplement your current income or will this be a full time business and how much income will your require?
There are ups and downs with any business, but if you look at your own strengths and what you hope to accomplish, it becomes a matter of understanding what each business model will take to run and how it will perform for you based on your needs and your preferences.
{ 9 comments… read them below or add one }
Twitter: luckyoliver70
September 14, 2010 at 2:15 pm
Hi Liz,
interesting questions.
My single most important aspect when it comes to my home business is building it huge, building it once and getting paid all over again, not only myself but also my children and my children’s children.
The beauty of this approach is not only the residual income, but that it also facilitates the choices available on the market dramatically – at least 90 % of the market offers available aren’t suitable for me.
So I had to find a network marketing company that allows me to use the internet adequately without being in breach of the policies and procedures and whose policies and procedures don’t contain any ongoing training responsibilities and sales requirements – the kiss of death to residual income. That reduces the choices again.
In addition to that, I don’t want to have to build a team with 2,000 people per every 10,000 $ I want to make per month (residual income) Less people will do.
Of course, I don’t want to be involved in the “supply chain” between the customers and the company (order process, shipping, payments etc.) It all needs to be set up by the company.
That’s all. I’m happy and grateful to have found this company.
Well, basically, I don’t see myself as internet marketer. I see myself as networker marketer building relationships through the use of the internet and the telephone.
Take care
Oliver
Liz.. this is a great post. You explained all 4 business models clearly. I think combining the information marketing model (where you create your own products) with the affiliate marketing model, you can take advantage and increase profits..
That’s what I do.. and it’s working great
thanks
Hector
Twitter: jeromeratliff
September 14, 2010 at 8:23 pm
Hi Liz,
Ok – as an outsider looking in. I see this business model as a great solution to bring in another source of residual income that is part of the multiple streams of income my good friend Robert Allen talks about.
It ultimately comes done to what does the person prefer and does it allow them to fulfill their purpose.
Talk to you later,
Jerome Ratliff
Twitter: karen_newman
September 15, 2010 at 8:10 am
Liz,
What a great overview of the various options available to people researching an Internet opportunity. It really takes the guesswork out of the decision making process. Thank you for sharing!
Twitter: Josh_Garcia
September 15, 2010 at 9:11 am
Hey Liz,
I really like how you broke this down. Provides many options on how to use the internet to make multiple streams of income. Awesome Job!
Chat with you later…
Josh
Twitter: prfuller
September 15, 2010 at 7:32 pm
Hey Liz
Four great ways to make money online.
I am always looking for synergistic ways to combine various models to build a business online.
Peter
For those who don’t know much of landing page optimization, I’d say the store model is much better. Info products may often see lots of ups and downs while the store model is good way to consistently improve business. Nice topic and Good information Liz. Thanks!
Joel, I like the store model too and if you can find a good niche and focus your site to what people in that niche want to buy, you can do pretty well.
i would suggest to go for small blogs with some content for the new marketers like who cant spend much money and cant design sites…