7 Top Online Business Models

There are a number of ways you can begin, or grow, your online business, and while there is no wrong model to follow, the best one is going to be the one that works best for your bottom line. Here are seven different business models you can use for your online business, making it easy for you to decide what your business really needs.

Seven Top Online Business Models

1. Drop Shipping

Drop shipping is one of the most convenient business models, simply because you don’t need to keep any inventory, and someone else takes care of the packing and shipping for you. With drop shipping you partner with a warehouse, or a few, and when someone orders from your online shop all you need to do is put in an order with that warehouse. Many warehouses can actually create receipts and packaging so it looks like it was shipped directly by your company. Some entrepreneurs say that anyone can start a drop shipping business in just a few days, with minimal investment, though there's a bit more needed than just a website and a few dollars.

Some entrepreneurs say that anyone can start a drop shipping business in just a few days, with minimal investment,

In general, drop shipping is a hassle-free way to begin a small business, but it can have a few headaches. For one, you aren’t in charge of shipping times, and they can be quite long, sometimes up to a few weeks, and another issue can come in the form of customer service. While you may have a company who is shipping the product for you, anything can happen along the way, and if you haven’t seen the product in real life, it might not live up to customer expectations. Drop shipping businesses should have a system for addressing customer issues, and you will also need a plan for products that are ordered, but are not currently in stock with your chosen warehouse.

2. Amazon FBA

Fulfillment by Amazon is a great way to get your product, or products, out there and into the hands of customers. Most customers will check Amazon for many things they need, from electronics to paper towels, so working with them can really help to boost sales. With Amazon FBA you send them your product, and they will actually store the product for you. They will list the product, pack it, and ship it to the customer. They take care of customer service for you as well, which means that’s one less thing for you to worry about.

One of the good things about Amazon FBA is that they will pay for any problems that affect your product while in the hands of Amazon. With this model you are in charge of sending them your inventory, so if something happens to it along the way, that money is then lost. When you send your product to Amazon you also have to wait for them to receive it, and to check it, which can take much longer than you expected, and you also lose a bit of control over how your product is packaged to the customer.

3. SaaS

Software as a Service, or SaaS, is a popular model if your product is a piece of software. This allows you to share your software on a subscription basis, instead of just a program the user buys once. With this service you are able to have a steady stream of income each month, and customers are always able to access software updates and can easily tackle software issues. The downside is that it makes it much easier for your customer to drop your service for a new SaaS system, so you’ll need to make sure you are actively working on customer needs and responding to issues quickly.

4. AdSense

Google is already a trusted company, which is why AdSense is used by so many bloggers and other website owners. AdSense allows you to monetize your website further by giving you a choice in which ads you want to show up on your website. If your website is already bringing in many visitors per month, this service can be a great way to bring in extra revenue, and advertisers will pay much more to appear on your website. If you are a smaller blog, or a website that is just starting out, it may take a longer time to see, so the costs for keeping the website up would come out of your pocket during this time. AdSense is a great tool for many webmasters who just want to focus on creating great web content, but it also shouldn’t be the only thing they count on.

If your website is already bringing in many visitors per month, this service can be a great way to bring in extra revenue, and advertisers will pay much more to appear on your website.

5. Amazon Affiliate

Another way to bring in revenue from your website is to by using the Amazon Associates program. This is an affiliate marketing partnership, in which Amazon will pay you each time someone purchases a product through a link that you have created. This is a great option for writers who write reviews on their website, since it’s easy to link to that product on Amazon. You can have a bit more control over how you present these Amazon products, and they give you a way to easily track your visitor's preferences and insights into which links customers are more likely to click on. This can help you create content that is much more focused on what your visitors would like to see.

Amazon Affiliate can help you create content that is much more focused on what your visitors would like to see.

Amazon is again a trusted company, so you’ll know that your transactions with them are safe and secure. One downside to using Amazon Associates is the payouts are not as big as other companies, but if you’re just starting out and want to advertise products from a company your customers already know, their affiliate program is a wonderful option.

6. Affiliate Marketing

This is another business model that webmasters can use to create more income, but it is a bit more involved than just putting a link on your page and waiting for users to click on it. Affiliate marketing works well with review sites, since you are using your writing abilities to personally convince the reader that this specific product is right for them. Otherwise, the advertiser may have banners or other ads they want you to run on your site, which, when clicked, will create revenue for you.

Affiliate marketing works well with review sites.

Affiliate marketing can bring in extra profits, but unless you know the product very well, your visitors may not trust you to have the best products reviewed or advertised on your site. If visitors see a random assortment of links and reviews, it could be a turnoff, so you’ll need to take the time to understand the company and product, and how your visitors could benefit from their products.

7. E-Commerce

Starting your own E-commerce business is easy to think about, seeing as we do practically everything online today, from banking to shopping to just checking the weather. Starting up your own business online is easier than it was even a few years ago, and you have a lot of options for where to host, how to receive payments, and even where to find the best products. E-commerce can incorporate elements of other business models, such as drop shipping or fulfillment by Amazon, or you can sell your own product on your own terms.

E-commerce can incorporate elements of other business models or you can sell your own product on your own terms.

With E-Commerce there are various routes you can take, some better than others, but it isn’t as easy as some would have you think. You can have an amazing product, but if you lack customer service for when things go wrong, you’ll lose a lot of customers, or you may not get any at all because you don’t understand the basics of advertising. There’s a lot of competition out there when it comes to E-Commerce businesses, so making sure yours stands out does take time and effort, but when profits start coming in, it’s worth it.

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Leave a Reply 3 comments

Thomas G - November 18, 2016 Reply

Great list, but I guess you forgot “service” as a great model. For amazon affiliate sites, do you know of a way to deal with the “international” aspect of things (like : should the customer be sent to amazon US, UK, AU, etc…) ?

Russell - November 20, 2016 Reply

Great post 🙂 I like adsense and amazon best as they are the most passive I have tried so far. Want to try my hand at SaaS like your LTP tool but the thought is pretty overwhelming at the moment.

kash Lalka - November 20, 2016 Reply

Another excellent type of earnings is focusing on only specific niches and creating e-products for it. Like Authority Hacker does with its authority site and its health site. That way you have your own product which is not as software intensive like a SaaS product and doesnt have the hassle of dropshipping/FBA or ecommerce. Not does it have problems like your account getting banned like adsense and amazon affiliate site owners face.

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