Recent data published by Internet Retailer reveals that online sales totaled $304.91 billion in 2014, a 15.4% increase from 2013, and that an estimated $350 billion will be spent online at the end of this year (2015). This is in the US alone.
While we’re all obsessed with the Mark Zuckerbergs, Jeff Bezos, Larry Pages and Sergey Brins of this world, the fact remains that there are a lot of average people making a difference, and ensuring a comfortable living for themselves without necessarily having to create the next big thing.
If you are yet to start an online business, all data and indications show that now is the right time to start. If you’re confused about what to start, don’t worry, I’ll show you seven practical and proven business models, with relevant examples, that you can implement immediately.
Business Model #1. The Ecommerce Business Model
While we all know Amazon.com to be the giant in the ecommerce space, very few people know that you can start a profitable ecommerce business that is barely a fraction of Amazon’s gigantic size.
A very notable success story that proves the efficacy of this business model is Steve Chou, of MyWifeQuitHerJob.com.
Steve’s wife wanted to quit her job so she could take care of their newborn child full time, and Steve was becoming increasingly concerned with financial security as his family grew.
Steve and his wife decided to start Bumblebee Linens, an ecommerce store that specializes on handkerchiefs and linens, and they were quickly able to replace his wife’s salary of $100k within a year of starting the store.
- You don’t have to start big; Yes, Amazon’s success is massive but unrealistic for everybody else. Focusing on handkerchiefs and specialized linens seems smaller, but it is profitable for Steve and his wife.
- Getting started doesn’t have to be complicated or expensive: There are several ecommerce software and apps you can start with, a notable example being PrestaShop, which is free and an industry leader with 250,000 stores and a community of 800,000 members for support.
Business Model #2. The Freelancing Business Model
I’ve been online for over 5 years now, and one thing I’ve noticed among people who want to start online businesses is the desire for quick income.
I won’t necessarily sell you a “quick cash” dream, because most people who start with such mindset don’t last, but I can tell you that the fastest route to income online is to be a freelancer.
By becoming a freelancer, you can very well be making an income within a few days of starting your business.
You need to first have a viable skill you can use to serve potential clients; perhaps you’re good at using Photoshop, drawing illustrations or cartoons, writing, designing plugins and themes, customizing websites, etc. Then you could have a successful freelance business in no time.
- Have something to offer: The fact that quick income is possible by freelancing doesn’t mean it is effortless; you have to offer real value to clients, and you should forget about some “passive income” dream. Earning from freelancing requires real effort.
- Learn from the best: If you’re a freelance writer, Daniel and Ali’s course for freelance writers is a good place to start, and it’s extraordinarily affordable as a career investment.
If you want to do other forms of freelancing, seek the best people doing the freelancing of your choice and learn from them.
Business Model #3: The Consultant Business Model
The consultant business model is very similar to the freelancing business model, but it’s different in that your role is to provide guidance to your clients instead of to execute their projects.
Perhaps you have some specialized knowledge you can use to help other organizations grow or achieve certain results that would have been impossible otherwise? Then you might want to start consulting.
Ross Simmonds was able to generate $160k in revenue, and $120k in profit, for his consulting business within a year of starting. He did $250k in revenue his second year, and that’s without him having to employ anyone.
Business Model #4: The Digital Products Business Model
Selling your own products can be a profitable source of income, and this can eventually lead to a source of semi-passive income.
There are lots of success stories online that prove the efficacy of selling digital products, and a renowned example is Danny Iny, who rose to fame and built a 7 figure business within 4 years of starting online.
The key to creating successful information products lies in knowing what people want, and then giving it to them; if you can master this, and learn some basic marketing, then you’ll experience above average success.
Business Model #5: The Affiliate Marketing Business Model
Some people do not want to be a “slave to their time” so to speak, and they detest having their income rely on them working all day non-stop.
For these people, freelancing or consulting won’t work, and they might also not want to invest the upfront time required in creating an information product.
If you’re in this camp, then affiliate marketing could be your business model of choice.
With affiliate marketing, you can promote a product created by someone else and get paid a percentage of the income generated from the sale you make.
A notable example of a successful affiliate marketer is Zac Johnson, who has made millions from affiliate marketing since he started around 15 years ago.
According to Zac, the key to affiliate marketing success lies in finding products that convert best for your audience and traffic source and focusing on them.
Business Model #6: The Subscription Business Model
This is the dream business model for most people; you put in the initial upfront effort and, with some maintenance effort, you can guarantee a consistent, or increasing, income every month.
The benefit of a subscription business model lies in the fact that people only need to register once, and they will be billed month after month; depending on how well you’re able to maintain your subscription site, and how well you can attract new users, this can be a massive source of income.
My favorite success story using this approach is Carol Tice. Carol started the Freelance Writers Den, her community for freelance writers in 2011, and it’s since grown to thousands of users that pay $25 monthly to be a part of the community.
Business Model #7: The Paywall Business Model
The Paywall business model is quickly becoming a choice among publications and media sites as a way to increase revenue without relying on ads.
The paywall businessá model involves you giving people access to a certain number of content on your site, or restricting access to a certain percentage of your content, so that people can pay to access the remaining content.
Several reputable news sites like The New York Times and Boston Globe rely on this as their main source of online revenue.
Which is Your Favorite Business Model?
Do you have an online business yet? Which of the above is your favorite online business model? Comment below.
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