What is aÂ good business model for online business? There are many strategies for online businesses but if you’re looking to start your own online business you need to know which will perform the best. You can spend a lot of time jumping from one idea to another online and never achieve much.
An online businesss is a great business model. With many online business strategies you can build an income, work from home (or anywhere) and work around other existing commitments. Once your business is making a profit you can choose your lifestyle accordingly.
Business Model For Online Business
So what is the best business model for online business? For a long time I was searching for a flexible income which could be operated from my home computer or laptop. I looked at many different ideas from buying and selling using ebay, to drop shipping and affiliate marketing. I spent a lot of time jumping from one idea to another and it wasn’t until I discovered affiliate marketing that I decided on my direction.
What is affiliate marketing?Â Affiliate marketing is a business model which allows anyone to benefit from selling other people’s products on the internet. Why would you want to sell things for other people? Because it allows you to work where and when you like from anywhere. As long as you have an internet connection and a laptop you can work from anywhere globally, choose your working hours and build a profitable business.
There are literally thousands of affiliate products to choose from online and you can promote pretty much anything. Some products pay you more than others online and this is the crux of choosing the right business model for online business. In order for your online business to be profitable you need to choose the right model to start with.
Choosing The Right Business Model
Many people start out online with little of no knowledge. They grab some information and set off down a flawed path. This is how I started out online. I built many websites and tried many strategies. Had I spent time on educating myself first I would have saved a whole heap of time, and money.
Business Model #1 – Google Adsense
Google’s adsense program offers bloggers to ability to make money from placing adverts on their website. For each click they get they earn money. Although this is usually only pennies (depending on your content) it can add up if you have thousands of website visitors coming to your site. Plus this is then ‘passive income’ assuming you put in enough effort in the first place to write qulity content and build a good online presence. You can also earn money from Google Adsense by making YouTube videos. Again, you need a huge audience to make an income large enough to call it a business.
Business Model #2 – Affiliate Marketing
Affiliate marketing can take many avenues. You can sell things from Amazon, Ebay or through sites like Clickbank which deals with digital products. Digital products can allow you to earn up to 50%+ of the price of an item. Physical products from sites like Amazon don’t offer such a high markup but you can earn from other purchases made by your referred customers. The best affiliate marketing business model I have found is this one. I’ll explain why next (and yes I do receive an affiliate commission for sales.)
Business Model #3 – High Ticket Items
My first digital sale made me a commission of around $50. The product was called Xsite pro and it was a website building software product. It sold for around the $120 mark. My best affiliate commission to date is over ten times this amount. This is because I sold a high ticket product. There’s a few reasons why high ticket products offer the best business modelÂ for an online business:
- You make more profit for each sale (d’uh!)
- You can more easily offset your marketing budget which means you can use paid advertising
- Paid advertising can be scaled
- You can more easily build a larger profit business then by using small value items
But this business model also benefits from a number of other profitable strategies.
Having high ticket items is good because you can earn more per sale than you would for smaller items. Maybe you’re thinking that it is much harder to sell a $1000 product than a $100 product? While this maybe true you also need to remember that the internet allows you the reach of a global audience. Let’s say you want to make $10,000 online. You can either do this by selling a $100 item 200 times (at 50% commission), or by selling 20 high ticket items at $1000 (given the same percentage commission). So although it may be harder to sell a high ticket item online it is not 10 times as hard.
Multi-sale business model
Most affiliate business models only pay you for the initial sale. After that the affiliate company has ‘won’ the customer. They go on to build a business by buying and keeping loyal customers. The affiliate marketer makes a single sale and then must find more customers. This model neglects to capitalise on the lifetime value of a customer (for the affiliate anyway).
Lifetime sales from repeat custom keep businesses working over the long term. This is where many affiliate marketers get stuck. They have to continually find customers again and again. Each time a business finds a customer they potentially benefit from repeat custom.
This model also rewards the affiliate for repeat custom. This means that you can benefit from sales made later on through that company from your initial sale, even when someone else closes the sale. As long as you make the initial referral you can benefit years later from repeat custom.
Selling membership products is another game changer when it comes to affiliate marketing. This is something I missed for years to my detriment. A single sale of a $500 product can make you $250 lets say. Assuming a 50% commission. But that’s all you make.
After that you need to sell more products. Not so with membership products. With membership products you also make monthly commissions. So for each sale you make not only the commission of the sale price but you also make a monthly income from each referal who continues their membership.Â If you’re looking for a business model for online business, this is the one to use. Not every affiliate product offers monthly commissions on membership sales. This one does.
Built In Sales Team
A good business model for online business should also include a built in sales team who close sales on your behalf. If like me you don’t see yourself as a sales person, it doesn’t matter with an online business. Choose an online business model which has this built in. Watch this video series and learn more about such an online business model which you can benefit from. Access here.