Okina Dojo

To have a viable business, you have to literally provide some kind of a good or service that adds value to someone or something. With hundreds of different business models online, it’s easy to get overwhelmed and wonder which one is worth pursuing.

Each Web business model draws on certain skills and will entail a certain set of responsibilities. Each will have a different source of profit. You’ll need to understand the type of Web site functionality required for each one and what components can provide this capability, so that you can estimate your associated costs.

Choosing the right one for you depends in large part on your vision, the amount of time you have to put into your business, and what you hope to get out of it – your goals.

Let’s take a look at a few internet business model options:

Product Based Business

A product based business model is about selling a physical, shippable product online. The three main ways to sell products on the Web are by storefront, auction, and online mall, which is a site that offers products from different vendors. It can encompass everything from direct selling to wholesaling. This includes such diverse items as real estate, electronics, books, music, instructional videos, computer hardware, computer software, household items, clothing, jewelry - to name a few.

Service Based Business

Professional coaching has become perhaps the single most common type of online service available. Providers can offer their coaching services through email and/or on the telephone. Other common service based business include consulting, writing, graphic design, programming, and administrative services.

Here are a few questions to ask yourself to see if a service type business would work best for you.

• Do you enjoy working with people?
• Do you often have specialized knowledge in a particular area of interest?
• Are there people who would pay for your specialized knowledge?

Thus, there is an ever-expanding pool of new diversified service industries. Entrepreneurs who identify and exploit a new service industry are enjoying massive growth and profits, and the prospects for a continued rise are outstanding.

Information Delivery

In a sense, these are people who gather, synthesize, package and re-sell knowledge. This includes Information Brokers, Professional Researchers, Communication Professionals, Consultants, and Authors, to name a few. This field is exploding, especially as more people have more access to more information. True success stories spring from those who successfully filter the flood of information and synthesize it into something new and useful. With the dawning of the Digital Age, this new field is growing at an all-time pace.

Brokerage Business Model

Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables.

Internet Careers

Today, this ranges from avant garde to engineering, including graphic artists, web designers, programmers, technical-types, web development companies, computer and software trainers, and Internet consultants. In terms of new jobs, this is one of the fastest growing segments of our economy. Remember, over 95% of all people on the Web today were not there a few years ago! You may not consider yourself an expert, but there’s a good chance you are, compared to many people just now coming onto the Net.

Electronic Publishing

This includes magazines, newspapers, newsletters, coupon books - literally any written material that is published can be converted into digital format and uploaded onto the web. Today we’re seeing that most publishers of printed publications will also publish an online version. The marginal extra cost of the online edition more than pays for itself in additional readership and advertising revenue.

Advertising

The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialized.

Technically, anyone who has a web site that generates enough traffic can get sponsors or sell advertising on their site to companies wishing to reach that target market or demographic.

Subscription Based Business

Another popular and profitable type of business model is a membership site. Users are charged a periodic — daily, monthly or annual — fee to subscribe to a service. It is not uncommon for sites to combine free content with “premium” (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined.

Sometimes you can combine two or more of the models we’ve listed here, and there are many other variations that are far too numerous to mention. If you come across a Web business model that we haven’t discussed here, please leave your comments. We’d love to hear from you.