Mark Zuckerberg. Andrew Mason. Matthew Mullenweg. Forgive the name dropping, but these three gents have a trio of rather interesting things in common. First, they are all under 35 years old. Second, all three are multi millionaires. Third, they all earned their sizeable fortunes with the internet.
Mark Zuckerberg founded Facebook, while Andrew Mason and Matthew Mullenweg were the inspirations behind Groupon and WordPress, respectively.
If you’re thinking about setting up your own business, you’d be forgiven for feeling overwhelmed – there’s an almost encyclopaedic selection of business start up choices out there. From setting up your own brainchild from scratch, to running with a heavily marketed franchise-in-a-box system the question of business model is the hot topic over the teapot in many an internet forum, and one that is almost aggressively divisive.
Why Internet Based Business Models?
For those who really haven’t a clear and concise plan already mapped out in their heads, internet based business models can offer the best of both worlds – the epic earnings potential that come with running a successful company, only with far fewer of the bottlenecks that come with traditional bricks and mortar setups. Like suffocating cash demands, before so much as a customer has ventured through the threshold or a penny has been earned by way of revenue.
Some Different Types Of Internet Based Business Models
Ecommerce/Shopping Cart Model
With this type of model, your website takes over from your physical store in shipping goods directly to your customers. Ecommerce sites aren’t especially difficult to create, and there exist a cacophony of software options – from the free/cheap to elaborate, custom design carts with every type of bell & whistle you could want.
Amazon are a pretty good example of this simple, yet ruthlessly effective online business model. It uses cheap, out of town warehouses which ship the goods directly to consumers. By minimizing its cost base and maximizing economies of scale it can offer prices that most offline only stores just cannot go toe to toe with. For this reason, the more niche your product range and the better your unique selling point, the greater your likely success when using this model.
Digital Download Model
Examples of this are ebooks, software, music and just about anything intangible that may be downloaded instantly after purchase. A huge feature with this model is that once set-up it requires practically no manual intervention from you or your staff. From product purchase to delivery, it’s all handled by a virtual backroom of wageless robots that exist within the software system that you’re using.
Membership Site Model
These are often touted as the holy grail of models because they offer a recurring income element. Typically, members pay a monthly fee to access digital content that is hidden to non members. The product could be just about anything, but mostly will be some form of digital media such as ebooks, videos or software. Normally, fresh new content is added periodically to encourage the member to stay as a paying subscriber.
Affiliate Model
The site owner earns by placing a selection of affiliate adverts on the site, normally closely linked to the site theme. When a sale is made via an affiliate link or banner, the site owner earns a commission. This is among the most commonly applied net business models for bloggers, and for new entrants into the online business arena.
Hybrid Model
There is a good chance that the business model you end up with could well be a pick n mix of two, or more of the above. For example, your site’s core purpose could be to sell subscriptions to new monthly business products and tools, but it could equally offer affiliate products to bolster earnings.
These are just some of the more popular internet business models that you can adopt. Keep in mind though that the internet, evolving so ferociously as it does, always throws up new opportunities and new ways of doing business.
Mark Zuckerberg tapped into the voracious public appetite towards social media, and took it to a whole new level. Facebook certainly didn’t really fit jigsaw like into any of the online business models above. Andrew Mason took the traditionally revered concept of coupons, and shaped it into the world’s biggest online coupon site.
These guys are but just two in a chugging factory belt of internet success stories – fact is, the world wide web just keeps plopping out more and more millionaires, from an ever widening array of unlikely, even downright ridiculous business models. Don’t believe me? Ask Byron Reese who’s santamail website, selling Letters To Santa pulls in a rather merry million bucks per year. Anyone for egg nog?