Choosing Your Online Business Model

In the last post on starting a small online business I talked about the importance of choosing exactly what you will be providing: product, service, or content. Each one of these routes will have a different strategy behind it to be successful.

I will outline how you can make money with an online business no matter which one of these paths you choose.

Product - If you want to sell products online there are many ways to go. The first and most common is selling your products on Ebay. Of course you have heard of the people who make a killing, and it is true I had a privilege of meeting such a person. He simply bought Lacoste polos in bulk and discount then resold them individually on eBay. This was very time consuming and the competition was fierce. Only when he got into selling his own product wicked lasers did his business really grow. If you want to test the market to see what kind of items are hot, you can always try drop shipping before investing in creating your own product. What is important to keep in mind with this option is the end goal is to sell your own product. Here is why.

• The margins will be much higher
• You can find business to distribute your product for you
• You will have full control over design, shipping, etc
• You will build equity which can then be sold

Service - If you are a professional, rather than starting from scratch this might be a great way to go. For example, if you are an accountant, freelance writer, tutor, or masseuse, you can market your services online. The reason why this option is great is that you can establish a presence much quicker than through traditional off line methods. You can also continue doing what you love. Here are some pro’s of choosing this model.

• You do not have to learn a new skill that is the core of your business
• As your client list grows you can start being much more selective with whom you work with
• With improved online reputation you can charge much higher rates

Content - Content online businesses can be anything from news, how to’s, to entertainment. A site like this is a perfect example. The key here is to continue to ad value to people who visit your site and grow your traffic. These sites are supported by ad revenue. There are many ways to monetize your website, you have to test different combinations to figure out how to maximize revenue.

• Getting paid for people clicking on ads (AdSense)
• Getting paid for number of times an ad appears (CPM Networks)
• Affiliate and referrals revenue share models (CommissionJunction)
• And more

If you have any questions or other points to make please post a comment.