Internet Marketing–Various Online Business Models

There are many different methods of making an online income. In reality, they are all very similar to the business models you see in the offline world. You can sell goods and services, you can produce products for wholesale distribution, you can sell information, you can sell tools to help people in their own business model, you can sell advertising, or you can provide consulting services.

Do you see a common theme in all of these models? That’s right—to have a viable business, you have to literally provide some kind of a good or service that adds value to someone or something, either online or offline.

I think that when people think about going into business offline, they look for a need in their community and try to fill it. Online, they tend to think, OK, what can I do to make a lot of money? There is a huge difference between the two. Online, I think people really believe that if they put up a web site and sell something, the money will just come in. It is simply not an accurate thought, but I think that just about everybody has thought it at one time or another.

So to create an income online, you must meet a need, just like you would in the offline world. You meet that need by producing, developing, distributing, or brokering a product or service. That is just about it. You will never earn long-term viable income from schemes and scams, no more than a bank robber will earn a long-term viable income robbing banks.

Here are some of the basic business models you can find on the web:

1) Production model. This is a company that produces value by transforming one good into another for online consumption. An offline equivalent would be a shoemaker or a gold mining firm. The online equivalent might be the development of new software or search technology, or the development of online technology that aids in the execution of some of the other online business models.

2) Merchant model. This is a company that specializes in the sales and organizes the delivery of goods and services to an online market. This can be compared to the offline equivalent of a merchant. Some examples online are bookstores, food stores, catalog web sites and other goods and services sales organizations.

3) Advertising model. This is a company that specializes in providing the service of advertising or promotion to other online firms, for example, those firms that operate using the production or merchant model. This model charges these companies a fee to advertise the goods and services provided by the other online business models.

4) Affiliate model. This is a model that resembles the advertising model, but is different in that it focuses on recruiting many individual companies or individuals to do the advertising in a systematic and piecemeal way. Whereas in the advertising model, the advertiser is paid based on the amount of advertising distributed, the affiliate model pays the affiliate marketer when a sale or step in a sales process is completed. This step may be an online visit, a request for more information, or the actual sale itself.

5) Brokerage model. This model is one that compensates the broker for bringing together buyer and seller, usually in the form of a personal, one-on-one introduction. An example of this might be an online auction or a processor of online payments.

6) Information model. The information business model is one in which the company provides information to a specific field or niche market. This information would typically instruct another company or individual on an easier or more efficient method of performing a task, or actually teach the task or the implementation of the task.

7) Subscription model. This is an overlay model, one which is generally incorporated into one of the other models. This model would provide a good or service over a protracted period of time, and provide a guaranteed and generally consistent level of that good or service for a period of time, for example over the course of several months. Two products that fit into this subscription model might be that of online monthly video rentals or services like food or medicines which are delivered on a regular basis by commitment.

8) Utility model. This model operates in much the same way as an offline utility might operate, offering a product that has, through its use, become a necessity and is often tightly controlled. An example of an online utility model would be that of internet access or telephone service via an online network.

9) Community model. This is a business model that focuses on bringing together individuals or companies of similar interest for the purpose of developing relationships and sharing information. Two examples of the community web phenomenon are the recently created Myspace and the older online forum.

When deciding to go into business online, it is important to determine which of these business models most interest you. To which of these models are you best suited? In which of these models are you most likely to be considered an expert, or in which would you have the willingness to become an expert?

Affiliate Marketing Internet Business Programs – 3 Great Ways to Earn

The internet has opened up a number of new ways to earn money. This was recognized at around 1995, a few years after the internet was made available to the public. During this time, several merchants put up affiliate marketing internet business programs with the hopes of increasing their presence online, which would in turn increase the sales of their products. Up until now, the very same programs are still in place for the people who still wish to work online and earn.

The key to the success of these affiliate marketing internet business programs lies in the understanding of how you can earn from them. Listed below are the methods by which you will be able to earn from these programs, as well as the good and bad points for each particular method:

1) Pay per Sale – this can be equated to retail sales. With this method, you can put up a website and then offer certain items for sale. No need to stock up on the product or buy it up front because the agreement with the merchant would be that you will sell for this certain amount, and then get a percentage for every sale. However, retailers do not get a huge percentage of the sales. This means that a participant in the affiliate marketing program would need a huge amount of sales in order to generate income.

2) Cost per Click – one of the oldest marketing programs on the internet, the cost per click has a simple concept. An affiliate displays a banner with a merchant’s name. This affiliate will get paid whenever someone visits the merchant’s website by clicking on the banner. It is a simple marketing tool that can offer you the potential of earning without doing much. A lot of merchants do not use this anymore because they pay for marketing, but are unable to confirm if the sale did come from the affiliate or not.

3) Cost per Action – of all the affiliate marketing internet business programs that exist, this is the preferred payment scheme of merchants. Opposite the cost per click model, the cost per action not only requires that the customer be redirected to the merchant’s website, but a payment is only made if the customer makes a purchase. The difference between this model and the pay per sale model is that the sale is made on the merchant website itself, and not through the affiliate site. The job of the affiliate with the cost per action is to convince the customer to make a purchase.

There are a lot of ways that you can make money online. All you need is a little knowledge regarding how you can be an affiliate, and then set up a marketing strategy. Once the strategy is in place, then you can watch the money roll in.

Practices in Internet Business

The practices that the merchant implements in their internet business will have an impact on the level of success that they can expect to enjoy. In this article the emphasis will be on the administrative elements of the model. The business will require that the merchant takes an interest in the way that the administrative tasks are carried out. For example it might be possible to look at the input and output on a spreadsheet but it will require the use of an SQL database to compare it with data that is apparently unrelated. The merchant has to make a decision as to the level of involvement they will have in the day to day administration.

When the business has just started it is not feasible to think about hiring administrative support. At this point the priority is to ensure that the business is feasible. The other issues such as administration take a secondary seat. However if the enterprise becomes very large then it will become inevitable that there will be some discussion about the possibility of hiring some administrative support for the merchant. This support can come in different guises but it does not need to be very technical or else the expenses will rise.

The maintenance of records is another thing that has ambiguity in the approach from different merchants. It might be decided that the recording of transactions is not important but it could be the principal issue when calculating backdated taxation. The government is always less generous when they are collecting arrears than when they are predicting taxes. It is therefore important to put systems in place that record the essential elements of each transaction that goes through the business chain. This will be a great opportunity to develop the foundations that will even when the business has grown beyond its beginning.

It is important that the internet business has a professional outlook right from the beginning. It is not easy turning into a serious project if the foundation was shaky. There has to be a strategic plan and the tools that are meant to support that plan. The internet business should be reviewed on a regular basis to see whether it actually delivers on the objectives that were envisaged at the very beginning. There also has to be a program for expanding the business when the opportunities arise. Otherwise the results will be only modest.