A Website business model – which one is right for you?
Step two asks the question, how do we now make money? Which website business model will work best given the product or service that we are focusing on? Let’s quickly talk about several of the many internet business models just to make sure we are focused on the same prize.
1. Affiliate Marketing - The affiliate
marketing/advertising model
is one that is based on the marketing of businesses other than your
own. It rewards affiliates based upon their marketing efforts and
the conversion rates obtained from those efforts.
For example,
let’s use Best Buy. Best Buy has an affiliate program.
An affiliate (you or I) creates a website that markets and refers customers to Best Buy. If the customer purchases something at Best Buy, we earn a commission. These commissions are based upon what the customer eventually buys.
2. Online Advertising – A form of advertising that is created solely
with the purpose of delivering marketing content to customers.
You might recognize some of the tools … banner ads and market targeted
ejunk mail. There are also several sub categories related to
online advertising know as Pay Per Action or PPA.
This business model is interesting in that the advertiser pay for certain actions (a purchase, a form submission) which are the result of advertising efforts.
Cost Per Action (CPA) – the advertisers pays for certain actions associated with the advertisement.
Cost Per Leads (CPL) – the advertiser pays for leads associated with the advertisement.
Pay Per Click (PPC) – A business model in which advertisers pay each time their ad is clicked on regardless of purchase or not. It should be noted the PPC is used quite a bit in the affiliate marketing model also.
Cost per click (CPC) – A business model in which advertisers pay publishers an amount based on advertisings that sends visitors to it's site.
3. Infopreneur – A website business model which is driven solely by
the ability to gather and sell information. It could be information on
any topic for which there is demand.
Infopreneurs generally create informational websites, blogs and forums. They write about their passion, knowledge and or experiences. It is through this knowledge that infopreneurs earn incomes via affiliate marketing and target PPC ads on their websites.
4. Online auction business model – A website business model in which individuals bid on products and or services via the internet. The most popular model in this class may be eBay but some of the other companies include, Allegro, Overstock.com.eBid and TradeMe.
5. Online retailer – This website business model includes all
entrepreneurs that have a product to sell online. Whether it is
solely an ecommerce website and we are a reseller, or an existing
retailer looking to establish and online presence.
Now obviously there are additional website business models out there. This list was not intended to be all inclusive. Rather it was designed to help us focus on our current niche/model so that we could further define it.
Which model do you feel your business would be best geared towards
in terms of marketing, advertising and revenue generation?
