It is vitally important to know what revenue/business model you are going after for your business. You don’t have to be an MBA or a business expert but you need to know what you are getting yourself into before embarking down the path.
Business Revenue Models Overview….here is what I have come up with as the contimuun of revenue models, they all have an online component because I think online is by far the best way to start a business before you drop a ton of capital into it.
- Manufacture – you build a physical product, whether outsourced or insourced, and sell it through distributors/ dealers, or through your online store, or both. By far the hardest model of them all, the most risk and also potentially the most reward when you sell it for $20 million.
- Retail – You buy physical products already built by someone else, either warehouse them or have them drop-shipped, and sell them online via your own store. Fairly easy to become a dealer for most products but you must rely on someone else when it comes to producing new products and having them in stock. This model is good when you have many suppliers and products for sale to reduce your risk or not having anything to sell to your traffic.
- Content – You develop and sell content, videos, ebooks, books, audio, etc., usually around a niche, or specific knowledge you have. In this model you can sell it one time or build recurring subscription models. This is where the passive model starts to play.
- Affiliate/Ad Revenue – You sell other peoples physical or digital products by directing your site traffic to their offer, or you place Ads on your site and people click on them and you get paid. For an overview of how ads work CLICK HERE
There are pros and cons with each of the models, and each model has its own set of challenges, time to launch, and other considerations. I go into full detail in our online course, but this is enough to get you started thinking about the model that excites you or that meets your needs, or both.
We are going to go with the Retail model for this start up, we are going to buy products from a handful of suppliers and retail them online via our own online store and potentially through Amazon.com
Next lesson will show you how we brainstormed and came up with the product idea and how we determined if we can be successful. With all the tools available it is not necessary to take a shot in the dark, you can have a good idea of how successful you might be.
This article is part of Creating Internet Income, a journey through using the magic of the internet to creating passive and active income. www.creatinginternetincome.com
Brian Jeide is a Business Startup Expert and Digital Strategist that helps others leverage the internet to achieve their goals. You can follow him personally at brian.jeide.com