Starting a new online business comes with many challenges. At some point, you may even feel uncertain about where you’re going. However, all successful online businesses start as small ideas trying to meet the customer’s needs with a unique product. If you're looking for an online business model that makes money, then keep reading.
Many online businesses start off with a different model while evolving it to meet the changing trends – until a time comes when it’s completely different from what it was initially. So, don't get to caught up with this as you can change the model as you grow.
A business model is a true reflection of the way you proceed to provide services and goods to customers at a particular cost and way. So if you’re aiming to deliver value to your customers, you'll first need an online business model which fits with your product and offering.
What Online Business Model That Makes Money, Suits You?
Let’s get to it and take a look at the top 12 online business models that are proven. If there is a specific business model that interests you, click on the links in each section below to find out more about that specific business model in more detail.
1. Professional Blogger
One of the best online business models right now is that of a professional blogger, who yes, as you might guess, makes their money through blogging. Blogging can of course be about virtually any topic you wish, but should, be something that you are interested and knowledgeable in.
The good thing about blogging as an online business model is that it provides bloggers with multiple profit avenues.
Bloggers and Vloggers can make money by charging subscription fees, offering advice and coaching, selling products, and through good old advertisements too. For example, the highest-paid blogger out at this time is Ariana Huffington, who makes $250 million per year!
2. Digital Product Creation
In case you are unsure of what this is, a digital product is any sort of online product, one that is not physical in nature. This could be a guide, a course, an application, a game, a movie, a song, or anything in between. Let’s put it this way, anything that you can buy and then use on your devices are digital products.
Yes, you do have to be fairly knowledgeable on the tech side of things, but that said, the digital product market is massive and still growing. It’s getting bigger by the day, and it’s because everything we do is moving to the digital space, or is already digital. Digital product creators who create products worth buying can make a lot of semi-passive income per month. Create it once and then sell it many times over. Perfect!
3. YouTube Creator
Yes, being a YouTube creator is fairly similar to blogging and/or vlogging, because this is what YouTube is all about, sharing video content with everybody who is willing to watch.
As defined by YouTube itself, YouTube creators are people who are approachable and have a constant presence in their user’s lives, are good at building person-to-person connections, and are socially wired. Simply put, these are people that create engaging video content for users of YouTube.
To put this into context, the richest YouTube creator out there is Jeffree Star, who has a net worth of $200 million, with the next richest being PewDiePie, with a net worth of $40 million.
4. Membership Sites
If you have something worth paying for, any kind of online content that you want to put on your site and share with people, for a certain cost, then running a membership site is a good idea. For a basic definition, a membership site is any kind of site that offers people content that is only accessible to members who pay for it.
Now, that being said, not all membership sites have feature paid memberships. They can be free memberships, with you then utilizing other monetization methods, such as the selling of products to members, or of course through good old advertising.
5. Fulfillment by Amazon (FBA)
If you are planning on selling physical products to customers, then of course, one of the best ways to do so is through Amazon FBA, particularly if you want to reach the largest audience and the highest amount of potential customers.
However, the issue that many run into here has to with storage. Yeah, storing thousands and thousands of products that may or may not sell at some point, can get very expensive.
The cost for a physical warehouse or storage space is not low. FBA or fulfilment by Amazon refers to a system that Amazon has in place, which allows sellers to store products at Amazon fulfilment centers, with Amazon taking care of the picking, packing, shipping, and customer service. This is a good way to start in the physical product space with Amazon helping out.
6. Authority Site
For those of you who don’t know is that an authority site is any kind of trusted site.
To be specific, an authority site is any site that is trusted by users, by experts, by other websites, and by search engines. In other words, this is a website that is an expert or authority on a certain topic, to which people go to for advice and knowledge.
What is nice about authority sites is that they provide plenty of profit opportunities. You could make your authority site a paid membership site, you could sell products related to the topic at hand, and you can always engage in paid advertising too.
7. Amazon Associate
Becoming an Amazon affiliate via their Associates program is another good option when it comes to selling physical products. Simply put, this is when you have a website and then link out to Amazon products, with the hopes of making sales.
The model here is PPS or pay per sale, which means that not only do people have to click on the link, but actually make a purchase too, for you to earn a commission from Amazon on the sale.
If you plan on doing this, beware that you will need to make what is more or less an authority site, because if you expect people to buy products through you and based on your advice, then they actually have to trust you. Earnings from being an Amazon affiliate generally range from $100 to $20,000 per month.
8. Advertising
If you want to make money through advertising, but you don’t really want to do any of the heavy lifting yourself, then something worth checking out is Ezoic. Just like Google Adsense, but paying at least 30% more to you in revenue each month.
This is a service that analyzes your site and then provides you with advertisements that match the content of your site.
This way, publishers of content can make easy money without really having to do much, as long as you have a good amount of traffic visiting your website. Ezoic will then pay you for impressions and clicks on your site. It is really quite simple, and even better is the fact that Ezoic is free to participate in!
9. Kindle Publishing
Kindle is of course one of the most popular digital book or E-reader applications out there. If you happen to be a talented writer, and you have some information that others are willing to pay for, and willing to read, then becoming a Kindle publisher is definitely an option.
No, this does not mean that you have to be the next Shakespeare or J.K. Rowling, although publishing hit books will definitely put dollars in your pockets.
You can also publish guides, tutorials, informational content, and really anything else that people are willing to read. For example, books that cost between $2.99 and $9.99 provide authors with a 70% royalty.
10. Dropshipping
Yet another profitable online business model that you can take advantage of is dropshipping. This is a specific type of retail fulfillment method that involves the seller not storing any of the goods on hand. A store does not actually possess the physical product, but instead, when a product is sold, it is bought from a third party and then shipped directly to the customer.
For example, if you are dropshipping pet toys, if someone buys a dog toy, instead of you storing that toy and then shipping it, you simply place an order to the third party, which in this case could be the manufacturer of the toy, which then sends it directly to the customer without that dog toy ever passing through your hands, so to speak. It’s a big benefit for anybody who wants to sell physical goods but has issues with storage and shipping.
11. Lead Gen
For those of you who don’t know, lead generation is the process of luring in new people and then converting those new people into ones that are interested in purchasing something from you, AKA a lead.
Most people don’t want to do their own lead generation, mainly because it is painstaking, difficult, and expensive, thus making it a great business to be in.
Generally speaking, this will involve a variety of marketing tactics. High-end lead generation companies can charge as much as $20,000 per month, just for a rough idea of how much money you stand to make with this particularly online business model.
12. Affiliate Marketing
There are of course two sides to affiliate marketing. You could be the owner of a product who allows affiliates to market it on your behalf (paying them small sums for sales made), or you could be the affiliate in the sense that you are the one advertising the products for the product owners and receiving the commission on sales you send them.
Generally speaking, this involves having something like a blog or an authority site, and then linking out to various products within that content. Yes, being an Amazon affiliate is the most well-known kind of affiliate marketing, but Amazon is not the only player in the game.
13. Stock Market Trading
This option is a bit left-field, but it is certainly a valid online business model which should be considered. If you have a liking for finance, figures and trends, then this could be a viable way for you to make money online. You can trade stocks anywhere in the world as long as you have a connection to the internet.
There is some training required and obviously some starting funds, but the stock market can be very exciting and fulfilling, so its worth checking out as an option. Day trading or swing trading can be a way to set up a business and earn money every day by buying and selling stocks. If you're interested in this business model, then check out these top platforms for stock market trading.
Understanding how does shorting a stock work can provide valuable insights into the dynamics of stock market trading. Shorting a stock involves selling borrowed shares with the expectation that their price will decline. It operates on the principle of selling high and buying low, but in reverse order.
Traders who engage in short selling believe that a particular stock's value will drop, allowing them to repurchase the shares at a lower price and profit from the difference. This strategy requires careful analysis of market trends, financial indicators, and risk management techniques to identify potential opportunities.
By grasping the mechanics of short selling, traders can explore diverse avenues in the stock market and potentially generate profits through well-informed trading decisions.
FAQs
How Do You Decide Which Internet Business Models Are Best for You?
It depends on your costs, product type, target market, and the amount you want to charge for sales. For example, if you don’t want to deal with the costs of having a physical store and still want to appeal to the masses for sales, you can start your online business following an e-commerce model.
Is Dropshipping a Legitimate Business Model?
Yes, it is a legal business model. Dropshipping is an online business model that doesn’t stock the items it sells. Be careful about reliable suppliers and have a contract to avoid legal problems.
How to Validate an Online Business Model?
The best way is to conduct market research and launch your product based on the initial model and then receive customer feedback on it to validate the model.
Recommendations
When you’re starting an online business, you need reliable market research sources as this is a key part to confirming the viability of your product. So here is a list of sources you can trust for research purposes:
CensusViewer is an online application that provides up-to-date census access. If you access the premium version, you can see registered voters and commercial data sources under the U.S. Census Bureau and American Community Survey.
What We Like
You can find data organized according to age, race, ethnicity, income, education, etc. This makes it easier to find data on your desired target market.
Consumer Expenditure Survey collects data about the purchasing habits of consumers. It includes demographics, income, and expenditures of customers in the U.S.
What We Like
It provides insight into consumer behavior without charging any subscription fee, and the data is updated frequently compared to other sources.
SizeUp is an application that will answer all your burning questions within seconds. It covers data to cater to small online businesses and help them make intelligent choices.
What We Like
It provides extensive data and business intelligence tools to small businesses at an early stage to help them grow. In addition, it is a reliable source of data to make critical business decisions.
Google Trends will help you access top searches on the Google search engine over a chosen period.
What We Like
It helps small online businesses check their activity feedback and their competitors activity for free.
Conclusion
We understand that you’re an ambitious entrepreneur and want to rush into business ASAP. However, select the model that meets all your needs and risk level you want to take on. Take a good look at these business models and choose the one to suit the product, niche and business method you're interested in. After all the aim is to choose the online business model that makes money!
