1. Service Model
Overview: A service based business model revolves around the concept of offering the user a basic service for free while offering a premium version of that same service (more features, etc...) for a certain cost. For example, everyone can sign up for Flickr and share photos for free, but you are limited to things like the amount of space you have to upload photos. Flickr offers a premium service, which provides the users with unlimited storage, HD video playback, and no ads when viewing the site.
Examples: Flickr & LinkedIn
2. Affiliate Model
Overview: A affiliate business model is when you drive traffic to a company's website offering a particular product or service, and you then get paid based on how many people sign-up or buy the product/service you are advertising on behalf of the company. Most companies have their own affiliate networks or outsource the network to third-party affiliate network such as Neverblue Ads for example. One example using the affiliate model would be Amazon.com where you can refer people through affiliate links from Amazon by doing product reviews where you then get paid a percentage of the sale for each person who buys the product you are advertising by clicking your link.
Examples: Amazon & eBay
3. Subscription Model
Overview: A subscription business model is when you offer a service for a reoccurring fee whether it be monthly or yearly. A perfect example of this is Netflix who offers a subscription service where based on the rental plan you select, it determines how much you pay each month and how many movies you can have out at once. This model is very popular typically with online music services.
Examples: Netflix & Rhapsody
4. Advertising Model
Overview: What could should be considered probably the most popular (and easiest to setup) business model online is the advertising model. This model revolves around the concept of selling space on your website to advertisers who in turn pay you for views and clicks on their ads from your site. Facebook is a perfect example where anyone can buy ad space on the popular social media website and advertise almost anything. Facebook has done very well with the advertising model as the key to this model often times is traffic! It's a great model for anyone who wants to setup a blog and generate a little extra cash on the side.
Examples: Facebook & Digg
5. Product Model
Overview: A product based business model is when you physically sell a product to the user whether it be a physical book for example or an ebook. This model is used when you have developed your own unique product for market or have a particular item you want to sell. A perfect example would be iTunes, which offers music, applications, audio cds, ebooks, and more in a e-commerce style website. The internet has made is extremely simple for anyone to put up a website and start selling with very little risks involved.
Examples: iTunes & ThinkGeek
The business model is what will allow you to make money online. If you can't fit your idea into some sort of business model like the ones above, you should really stop and ask yourself if this is worth your time and efforts. I cant say enough how important it is to take the time to develop a business model for a new idea before jumping into it. Create the model and use it as a guide going forward. I was shocked the first time I realized just how much of an impact it had on my work going forward. Please take a moment to leave a comment. What are you thinking? I want to know.
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