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Have you been toying around with the idea of starting a business recently? Feeling stuck on how to set it up? You’re not alone – thousands of people each year dive headfirst into the cold and sometimes scary ocean of entrepreneurship, many without any prior business experience. This post will discuss 5 business models that you can use to make money on your online business.

Think of this as a “Business Models 101” lesson, or a refresher if you’re already familiar with various ways to generate revenue. We’ve included 5 different business model ideas in this post so you can decide which models work best for your products and business.

Don’t be afraid to experiment with more than one! Often, the most successful businesses segment their products to fit 2 or more of these revenue models.

Psst…if you’re interested in business or making money, here are some other posts you might enjoy:

Before we can talk about specific business models, let’s step back for a second and talk about what a business model actually is. Maybe that term sounds a little intimidating. (I know it did to me, anyway…)

Many big business websites define business models slightly differently. Harvard Business Review states that it is “how [a business] planned to make money.” Investopedia is a little more formal, calling it “a company’s plan for how it will generate revenues and make a profit.”

But at its core, a business model is a plan to make money and be a profitable business. See? It’s not so intimidating after all. Don’t forget the incredibly important profitability equation:

Profit = Revenue – Cost

Revenue is important, but it’s not everything. Turning a profit should also be an integral part of your business model, and we’ll talk a bit about this later in the post.

Types of Businesses To Know

Within this post, we’ll be talking about two types of businesses: B2B and B2C. Below is a short debrief on what exactly these commonly used business terms mean. Keep in mind that there are many businesses who do both, so they’re not actually mutually exclusive.

Business to Customer (B2C)

In a B2C model, you receive revenue from an individual or household. Running an ice cream truck that serves kids and parents (and, let’s be real, hungry childless millennials like me) is a B2C business. If you are offering travel planning services for honeymooners, you are running a B2C business. Some typical B2C businesses include:

  • Food service
  • Retail
  • Direct product sales (e.g., farmer’s markets)
  • Individual services (e.g., wedding planning, trip planning)
  • Online courses or eBooks

However, there are a few cases when it might seem like you are running a B2C business, but you’re actually not. We’ll explore these in the next section.

Business to Business (B2B)

A B2B business model means your customers (and revenue sources) are other businesses. Any business where other businesses are paying you for your services or products is a B2B business. Some examples of B2B businesses include:

  • Blogs that are monetized via ads or affiliates
  • Social media management
  • Virtual assisting
  • Consulting services
  • Software

You might be surprised to see blogs on here, thinking to yourself, “My readers are my customers!”

Nope, unfortunately they’re not. When you monetize a blog using affiliate marketing or advertising, your customers are other businesses who want a share of the eyeballs reading your website. This is why sometimes business models can be a little hairy – the people who are consuming your products aren’t always the ones who are paying for them.

7 Powerful Business Models to Skyrocket Your Online Revenue

1. One-Time Direct Product Sales

Business Type: B2C or B2B

If you have your own products, website, or brand, you can sell products directly to customers. Whether it’s an eBook or a course, a WordPress plugin or a printable, there are tons of online products you can sell directly to your most loyal readers and customers. You can sell physical products like soaps and shirts to informational products like eBooks and print-outs.

Selling a product directly is often the most profitable way to do it because you get to cut the middle man. However, it can also be really difficult to get the word out about your product (especially in the beginning) and requires getting a little creative with marketing (or spending for paid ads).

2. Third-Party Product Sales

Business Type: B2C or B2B

If you’d rather use a middleman to cut down on marketing expenses, you can sell your products through a third party marketplace like Amazon, eBay, or Etsy. If you’re selling online products like courses, you can use a platform like Teachable or Skillshare. Airbnb, Uber, and Upwork are also popular examples of using a third-party platform to sell a service and make revenue.

Typically, the way this works is you put up your product for sale on the designated platform. When a product sells, the platform provider takes a cut of the revenue before handing it off to you. In order to make this work, you need to read the terms and conditions of your partners and make sure you price your products to account for any percentage charged by the marketplace partner.

3. Subscription or Membership Products

Business Type: B2C or B2B

Subscription products are those where access to a product is paid at regular intervals (e.g., weekly, monthly, annually). This encourages customers to pay regularly for the product or service that they’re using. Spotify and Netflix follow this kind of model, where you pay a fee each month for access to their large content repositories.

Historically, magazines also followed this exact business model. However, today, this is becoming increasingly popular with online services (like Adobe Creative Suite) and membership groups like country clubs. It can be hard to get skeptical customers on board with this kind of revenue model, but if you’re providing fantastic value, it can be an extremely lucrative business model for your online business.

4. Display or Native Advertisement

Business Type: B2B

For bloggers and content creators, advertising is one of the most popular sources of income. Basically, a business or company that wants to advertise a specific brand, product, or sale can pay for space on a publisher’s website, gaining access to their audiences for a fee.

Anyone who publishes or creates content has the potential to make some money from advertising. There are two different kinds of advertising: display and native. I’ll talk about each individually as they’re a bit different from each other.

Display Advertisement

Display advertising is selling space on your website for businesses to place visual advertisements, either photos or videos. These ads are usually clickable, and you typically get paid by the number of times an ad loads on your site. Depending on the demographics of your audience, you could get more or less money for each user. For more information on how display ads work, here’s a fantastic explainer video.

Native Advertisement

Native advertising is when a brand or influencer promotes a product or business within their content. If you’ve ever seen #Sponsored Instagram posts or videos on large news sites that seem to focus around a product, that’s native advertising. Many brands like native advertising because it is more personalized than a display advertisement. However, there are also many FTC regulations regarding native ads that you need to be familiar with should you decide to use this as a way to make money for your business.

5. Affiliate Sales

Business Type: B2B

Another type of B2B business model that works well for content creators is affiliate marketing. Basically, what this entails is recommending and linking to certain products or services in order to drive conversions to another business’ products. If someone who clicks on your link purchases something, you receive a commission. Commissions can be a flat rate or a percentage of the sale, depending on the partner.

If you’re interested in learning more about affiliate marketing, I highly recommend Making Sense of Affiliate Marketing. Michelle, the course instructor, makes over $100,000 EVERY MONTH from affiliate marketing on her blog, Making Sense of Cents. This was one of the first courses I ever took and I still use many of the lessons I learned within it on my various blogs and businesses.

6. Consulting or Outsourced Services

Business Type: B2B

If you have special expertise or experience that’s in demand, you can offer consulting services to clients. These range from one-off audit or Q&A calls to regular outsourced services in your field of expertise. Some other consulting services you can offer to your customers include:

  • Business audits and consulting
  • Social media consulting & management
  • Virtual assisting
  • Content strategy and writing services
  • Search engine optimization
  • Web design and development

To dip your toes into the world of consulting, you’ll need a portfolio or resume detailing your past work and why you’re qualified for the job. If you can convey results (like revenue numbers, web traffic, etc.) you helped drive, even better.

7. Agency

Business Type: B2C or B2B

If your area of expertise is SO in-demand that you’re feeling overwhelmed as a solopreneur, you can train others to work for you. You’ll find clients that are seeking your services, then assign one of your employees or contractors to work for that person. Through this model, you’ll make money by taking a percentage of the client’s payment as a “finder’s fee,” then pay your contractors an agreed amount. Many contractors like working with an agency because they don’t have to do the legwork of finding and pitching clients.

This is a great next step from business model #6, because it enables you to scale your service offering. Of course, you’ll need to adjust your prices based on the cost of your employees/contractors, but hiring a team can be a wonderful way to help your business reach its full potential.

Did you learn something new in this post? If you did, please pin it for later!

Feeling intimidated about starting your own online business? We're here to help! We've outlined 7 business models that you can use for your online business to help you make more money, attract the right customers, and be strategic about growing your business. Perfect for side hustle businesses or stay at home moms who want to build a work from home online business.

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