Internet Business Models

The business model is the key step before launching a commercial project. The business model is a study just before the business plan. The business plan outlines your project, describing its potential and the investment requirements while the business model itself defines a global strategy without going into further detail: what principle you can adopt to make money?

The world of the Internet is still recent, business models are still proving themselves. Here are nevertheless those who appear the most promising.

1 - Merchant

It is the easiest business plan to understand. It is actually an adaptation of the shop to the online world. You sell products or services through your site. The sales can be done with fixed prices or dynamic pricing, for example in the form of auctions. Different variations are: virtual merchant offering traditional products or specific, adaptation of an offer to buy online, opening an online store to complete a chain of stores (FNAC). Note: some manufacturers are put in line and make the sale in direct violation of their distribution network. It is a policy that has some obvious risks.

2 - Membership

You want to create a network of dealers to whom you entrust the task of promoting your products and your brand, in exchange for which you provide a commission. Any logistics, such as billing, collection or shipment, remains at your expense. The different variations that can be cited are: the exchange of visibility, payment to click. The biggest site built on this principle is Amazon.

3 - Billing to use

This model is based on the principle of accessibility to resources. The customer pays for every minute where he uses the service or for each document accessed.

4 - Advertising

The best know model and the first that comes to mind when we talk about profitability of a site. The basic idea is to generate as much traffic on a site in order to be able to sell advertising space. The site brings together traditional media such as radio and television. This model is very difficult to put in place, the major problem is to provide your visitors with free information and services, continually renewed, which are attracting more and more people. The increase in traffic involve an increase of technical resources and therefore a higher fee.

5 - Community

The site seeks to build a community of people sharing the same interests. The viability of the concept relies on the loyalty of the user rather than their number. The returns are done through the provision of community members. These contributions can take various forms: monetary or otherwise (provision of knowledge, equipment donations, exchange of knowledge).

6 - marketplace

The marketplace is the place to exchange with buyers and sellers. The purpose of the site is to connect the two groups according to their specific needs, remuneration being in the form of commission, fixed or variable. Some examples of possibilities: auctions (eBay), classified ads (the seller pays the publication), reverse auctions (the buyer makes an offer that the seller is free to refuse), Research Offers (a robot travels the internet looking for the best offer), virtual shopping mall (several shops are on the same site and each seller pays its "location" in exchange for services managed by the site.

If your business model is not on this list, think about it several times and check your idea with other people before you begin. Better to be safe than sorry!

To Your Success!

About the author: Do you want to learn more about Internet Marketing? I have just completed my brand new guide to Search Engine Marketing Success: ''How To Consistently Drive Thousands Of Targeted Visitors Every Day With Search Engine Optimization''. Download it free here: Search Engine Optimization Success.Affordable Search Engine Optimization Services.com Serge Daudelin is a Search Engine Optimization specialist and consultant who has written over 300 articles in print and 5 published ebooks.

Source: http://www.isnare.com/?aid=264840&ca=Business

Frequently Asked Questions

1. QUESTION:
   What are different Internet Business Models to work with?
   I have received an answer from Patrick (Thanks a lot Patrick) against a different question asked by me. In his answer Patrick wrote

   "There are a lot of internet business model you could consider of (e.g. selling phyiscal or digital products, buying and selling domain names, creating paid newsletter or websites, affilitate marketing, auctions and many more)."

   I need to know what are other internet business models or methods to start business online.

   Thanks & Best Regards,
   Shabbir Hazari

   • ANSWER:
     The Web offers tremendous opportunities for those who know how to harness it. You hear of stories of people who earn thousands if not millions of dollars from doing business on Web. While there are many scams (same way in the traditional business world), there are various ways you can legitimately make money on the Web.

     Here are the main ways you can earn money from the Internet:

     1. Sell products on the Web - Big boys like Amazon or Lillian Vernon online catalog or smaller businesses like BigKidsVideo.com or Candle4Less.com all sell products on the Web.

     You can either sell: (a) through your own storefront through your own website or applications such as Yahoo Stores; or (b) sell through online auctions like eBay

     http://www.ebay.com
     http://auctions.yahoo.com/
     http://www.overstock.com
     http://www.amazon.com
     http://www.ubid.com
     http://www.liquidation.com

     2. Information Delivery. Others such as About.com or EuropeforVisitors.com create content and monetize their content in a number of ways:

     a. Advertising - there are several ways you can earn money from advertising:

     1. Join an advertising network. Advertising networks are organizations that aggregate Web sites that offer advertising space, and sell banner ads (and other advertising options) across them. Traffic requirement is often a minimum of 5,000 monthly impressions, although many do not accept sites hosted by free page services.

     Burst Media http://www.burstmedia.com
     Fastclick (ValueClick). http://www.fastclick.com
     Advertising.com. http://www.advertising.com
     Tribal Fusion http://www.tribalfusion.com

     2. Participate in contextual advertising networks. Contextual advertising are text ads delivered based on the content of the web page using an automated system.

     Google Adsense https://www.google.com/adsense/
     Yahoo! Publishing Network (currently in beta and available to US publishers only) http://publisher.yahoo.com/
     Intellixt http://vibrantmedia.com/site/web_01a5.htm
     Quigo Adsonar http://www.quigo.com/adsonarexchange.htm
     IndustryBrains http://www.industrybrains.com
     Commission Junction Evolution http://www.cj.com
     Kanoodle Brightads http://www.kanoodle.com/about/brightads.html
     Clicksor http://www.clicksor.com/affiliate_programs.php
     Contextweb http://www.contextweb.com/
     Bidclix http://www.bidclix.com/
     Bidvertiser http://www.bidvertiser.com/

     3. Sell advertising for your site directly. This is admittedly a more difficult route for a small business site wanting to earn advertising revenues. But hey, as they say: "no pain, no gain!"

     b. Affiliate Programs - you sell other people's products that your audience may be interested in; and you get a certain commission after the desired action was done (whether a sale, a lead, subscription to email newsletter, or however this is defined)

     c. Paid online content. Hoovers.com or WebmasterWorld.com Supporters forum all require paid subscription before accessing the information

     d. Content licensing and syndication. Some publishers such as the Associated Press get paid every time their content is published elsewhere

2. QUESTION:
   Where can I find information about internet business models based on advertising?

   • ANSWER:
     You cannot base a realistic business model on JUST advertising revenue. It cannot work.

     Think about it, to get advertising revenue you have to get users coming to your site and then clicking on the displayed ads.

     To get users coming to your site you need to advertise to attract them (costs money). You can bring users to your site by other means but it will take a minimum of a year to get any real traffic.

     The cost of bringing users to your site by advertising will always be more than your receipts from advertising on your site.

3. QUESTION:
   does anyone have Afuah and Tucci's Internet Business Models and Strategies?
   and could they tell me what questions follow case 2 Webvan reinventing the milkman? pretty pls!

4. QUESTION:
   what is an internet business model?
   What is an internet business model and what are some examples?

   • ANSWER:
     An internet business model is one in which all aspects of commerce are conducted online and not in a "brick and mortar" store.

     Two popular businesses based on this model are Amazon.com and Ebay because 100% of their transactions are conducted online. These companies also rely on the internet for their customer service and contact.

     Walmart is a mixed model because you can shop online or walk into a store to do your shopping.

5. QUESTION:
   How is the Internet changing the economics of information and business models?

   • ANSWER:
     Considering the wide spread Internet access available now, businesses are now able to reach untouched potential customers. However, to maximize any business medium, one first needs to understand what the positive potential can be.

     Such is the positive potential that can be identified as the many advantages of an online business.

     ? Employee Options
     With an Internet business firms can offer its employees work options that other companies may not be able to offer. They can offer employees the option to work from home, create their own hours and create their own work environment. Firms can also hire employees from anywhere in the world, which means they have access to a large pool of talent. When employees have this kind of flexibility, it can make morale high and creates an atmosphere for higher productivity.

     ? Business Hours
     An Internet business offers flexibility to the customer as well, according to the e-Business Guide. Firms can set their online business to accept orders 24 hours a day, seven days a week and 365 days a year. They can offer a library of information to customers about their business that can be available at all times, and customers can send in emails with questions any time they want. With the automatic order taking capabilities of the Internet, and online real-time inventory tracking abilities, firms can offer customers anywhere in the world speedy order information without the need for constant human interaction.

     ? Global Presence
     The Internet reaches millions of people all over the world at any point of time. An online business can create an international presence at once without the need to pay for costly retail or office space in a foreign country. An online company can also segment the business and create specific websites to appeal to different cultures throughout the world.

     ? Dynamic Marketplace
     The Internet offers businesses the ability to update product information, change product design and specifications, and introduce pricing promotions and specials instantly. Firms can take feedback from customers and quickly make changes to their website user interface to help make the customers? experience easier. An online business can also offer customization options to customers that can allow someone to make changes to a product and then order the product with those changes. For example, a customer can create and order his own customized T-shirt from an online business quickly and easily.

     To read more about internet businesses please visit:
     http://www.tutebox.com/business/e-commerce/business-on-the-internet/

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