I previously discussed in my blog how different types of companies are working. Lets have a closer look at the different business models a company can employ to earn money.
Since I have been involved in the internet industry for years, you will find some models that are quite industry specific. However, I tried to include several ways "traditional" companies can earn money as well. Here is a quick summary:
This means that you produce a standard article, but you give the customer the possibility to make this mass market item more individual. Good examples include spreadshirt (t-shirts), redbubble (art) and mygall (german redbubble).
Built to order
That's an easy one. You just produce an item if someone orders it. You simply don't store finished products. Helps you to cut your fixcosts, enables you to mass customize.
You probably all know online shops. That's a great possibility to cut your costs compared to a traditional high street shop.
A lot of newspapers struggle to earn money these days, because an increasing share of readers uses the internet instead of buying the paper based newspaper. Some of the worlds biggest newspapers, as well as a lot of niche blogs use a premium content strategy. This mean that parts of a website are only available for premium customers who pay a monthly fee. Obviously, you could also introduce daily fees, yearly fees, pay-per click fees etc.
Let's take ebay. In the past, there have been a lot of auctions. Ebay always got a fee per completed auction. In addition, ebay introduced a lot of additional fees, some for making your auction headline bold etc. Today, there are some more or less innovative auction platforms. However, sometimes its hard to distinguish if its a fair auction or gambling..
A classy one. A lot of online businesses use marketing / advertising to monetarize their websites. Take google Adsense for example: Everytime someone clicks on an Adsense advertisement, the website owner gets a certain payment (0.01 cents to 5€....). Its a wide field, you could also sell banners to earn some money with your website. It all depends on the traffic your page gets.
The opposite to an online shop. You rent a shop, you install some furniture and you start to sell goods. Probably the oldest way to earn money, but obviously it still works.
Companies like partypoker.com earn tons of money. In some countries there are special laws in place that restrict gambling. Its obviously a good business, because usually the gambling provider earns money everytime someone places a bet / looses money.
For online affiliate systems, Zanox is probably one of the biggest. Amazons associate programm is also quite popular. The way your earn money as an affiliate is quite simple: If you place a link for an amazon book on your website, you get a share of the price if someone really buys it (thats what is called a sales lead). Franchise systems like McDonalds, where you pay a fixed fee to use the name and the Equipment, are pretty similar.
The key is in the name: you take money from the "crowd" to finance your enterprise. Recently, myfootballclub.co.uk had a lot of media coverage. These guys bought a football club using the money of 50.000 users. I think every single user payed sth. around 10 pounds...It's a nice concept which you can use in a lot of variations.
Cash flow based business models
Some business are only feasible because they transfer a lot of money. Everytime when a huge amount of money is involved, interest rates get important...you know what I mean?
Rents / Leasing
Again, a very old model: If you own a car, you can rent it and earn money with it. Works with nearly everything, from cars to houses to boats to computers to.......:-)
Some years ago it was quite normal in Germany to buy a prepaid card for mobile phones. It basically means that you pay in advance. I saw some prepaid credit cards some days ago. This concept works with a variety of products and services (Itunes gift cards....)
However, here's an advice: Never rely on one stream only! Always try to use different revenue streams. Trust me, I know why I say this;-) As always, feel free to email me at jonas at believeinvisions dot com!