Popular Online Business Models

With more people accessing information online, buying things through the internet, the opportunity is increasingly becoming more lucrative online.  There are several business models and this introduction will enumerate the most popular online business models.

Because this is a course for beginners, we will begin with the low-cost, low-risk online businesses, just to get your feet wet and introduce you to the online income opportunity

The Popular Online Business Models Today

Affiliate Marketing

Affiliate Marketing is when you promote other people’s/company’s products with an affiliate program and earn a percentage from the sales bought through your affiliate link. It could be anywhere from single digit to as high as 50% commission or even more.  Some programs even have a recurring commission, especially for subscription products or services.

The main task is, once you are accepted into the affiliate program, you will be given an affiliate link to serve as a tracking for all goods bought through your marketing efforts, and that is all. The company will be the one to take care of product or services delivery.

Most companies with affiliate programs will expect you to have a website to promote their products and accept you to be an affiliate, but not all require it.

We shall have a separate post to discuss affiliate marketing exclusively.

PROS of Affiliate Marketing

  • Low-risk, low-cost startup
  • No need to take care of placement of orders nor shipping; very hands-free

CONS of Affiliate Marketing

  • Sometimes percent commission is smaller, but this varies greatly
  • Needs a lot of promotion, digital marketing

    Dropshipping

dropshippingDropshipping is also promoting other drop shipping suppliers’ physical products through your website. Once a customer orders through your website,  you will, in turn, place the order with the supplier, and keep the difference from what the website customer paid to you and what you pay to the supplier. The supplier takes care of shipping it to the customer.

PROS of Dropshipping

  • Low-risk, low-cost startup capital
  • No need to take care of  shipping
  • Good profit margin
  • Instantly receive profit

CONS of Dropshipping

  • Longer shipping time – 2-4 weeks or more
  • Requires more effort as you will have to watch the orders and place it every time there is a new order
  • Needs consistent promotion

Know more about drop shipping by clicking here.

Private Labelling

Private Labelling is when you order from wholesale suppliers and sell by retail the products with your own private label placed on the product.  Hence, you can have a big company without needing a manufacturing plant nor research and development department of your own.

PROS of Private Labelling

  • Huge profit, you can buy something for let’s say $2 and sell it for $20
  • No need for a manufacturing or R & D team.

CONS of Private Labelling

  • Huge upfront cost since you buy in bulk
  • You need to take care of the shipping unless you find a fulfillment center to do the packaging and shipping, in other words, fulfillment of orders
  • You need to do marketing as well

There is one of these popular online business models that is increasingly becoming the dream of many, and worthy of mention  – Amazon FBA  (Fulfillment by Amazon).  This is when you sign up with Amazon as a seller, ship your private label products to Amazon, and Amazon takes care of putting your products on display on their website (through a listing that you created of course), and Amazon takes care of packaging and shipping.

Because of the huge customer database of Amazon, one need not worry about website traffic and just conduct pay-per-click and giveaway promotions within the Amazon portal.

More details about these online business models will be discussed in separate posts.

 

 

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