- 7 Online Business Models You Should Definitely Consider
- Online Business Models:
- 1. Affiliate Marketing
- 1.1 How do I start the affiliate marketing process?
- 2. Product Creation (Russell Brunson Style)
- 3. E-commerce (Amazon FBA model)
- 3.1 How do I start selling on Amazon?
- 4. E-commerce (dropshipping model)
- 4.1 How do I start an e-commerce dropshipping business?
- 5. Print On Demand E-commerce business model
- 6. Freelance business model
- 7. Dropservice business model
- 7.1 How to start a Dropservice business?
- Online Business Models:
In this article I will cover 7 online business models you should definitely consider when starting an online marketing business. It is certainly not true that there are one business model that stands out head and shoulders above another. All of these business models that will be covered here can result in great success and great wealth if approached correctly and if you are willing to put in the hard work and dedication required to make your chosen business model successful.
Saying this, as we cover these 7 business models we will also cover the pros and cons of each business model, and as we do, it will hopefully become apparent what business model appeals most to you. Just to give you one example to drive my point home is that there are for example super successful and wealthy entrepreneurs in the affiliate marketing industry, but so also in the e-commerce industry etc. , yet these are two completely different business models with completely different marketing strategies.
To mention just one example, it is of course true that for an e-commerce business model you will require a lot more startup capital than you would for an affiliate marketing business model, so this is where the pros and cons and the different marketing strategies will start playing a role in what your personal preference may be in regards to choosing an online business model.
Online Business Models:
1. Affiliate Marketing
Affiliate marketing is the first business model that we will be covering. For those that do not know, affiliate marketing literally means to sell/promote other people’s products for commission. Affiliate marketing is a fantastic business model to consider, especially for those wanting to start out with online marketing for the very first time. The reason for this is that the startup capital required is very low and there is very little risk involved when selling other people’s products for commission.
Your full focus can be dedicated on the marketing of these affiliate products instead of you having to spend time on creating and branding your own products which can be a very costly, time consuming and risky proposition. On top of this, as an affiliate marketer, you have such an array of products to choose from when it comes to promotion, that the sky is literally the limit.
- low startup cost
- no shipping and handling
- no stock required
- no storage cost
- no payment gateway required
- no development and branding of your own products
- the opportunity to promote an array of products that are already successful and established in the marketplace
- no employees to pay
- no need to deal with customer service
- more difficult to establish your brand/identity as you are promoting other people’s branded products instead of your own
- low commissions depending on the products you promote
- no real brand that you can potentially sell for millions of dollars, as is the case with e-commerce, as often “you are the brand” when promoting affiliate products
In general affiliate marketing is a fantastic business model and a lot of successful online marketers following this business model generate so much money selling other people’s products for commission that they see no need for making an effort to create their own products.
In other scenarios affiliate marketing is a stepping stone for those that have the desire to create their own branded products, but do not yet have the startup capital required to do so. Affiliate marketing can help them generate the startup capital they need to pursue their dreams of launching their own branded products in the future.
1.1 How do I start the affiliate marketing process?
You will remember we spoke about the very low startup cost when considering affiliate marketing. You literally need a website, website hosting and a keyword research tool to get started and this is certainly not going to break the bank. You will then start creating content in the form of website articles which will entitle you to embed affiliate links in your articles which should eventually result in affiliate commissions. As you start gaining momentum you can of course add video creation, list building, webinars etc. to the equation.
You make it sound so simple, but is it really that simple? The answer to that question is pretty much yes and no. Yes it is not that difficult to start getting content out there, but it is a whole different ball game to know how to go about ranking your content within the search engines and how to get traffic to your content.
So what do I recommend, where should you start? I highly recommend that you do not try to re-invent the wheel like I did when I first started out with affiliate marketing as it cost me a lot of valuable time and money with very limited success. What is the point in trying to re-invent the wheel if you can simply draw from someone else’s wealth of experience and start doing things the right way from the very beginning? Trust me, once you have gone down the wrong path and been going down that road for some time it is pretty difficult to make a u-turn and by the time the penny drops you are very likely to find yourself in the position where you may have to once again start from scratch.
The first thing that I would recommend you do is to read my article Online Marketing – An Introduction as I cover a lot of aspects there for you to consider when first starting out with affiliate marketing and that article will give you a very good overview of what to expect in regards to your online marketing journey.
Secondly, depending on your choice of strategy, I do recommend you compare “Wealthy Affiliate” and “Legendary Marketer”. They are both fantastic affiliate marketing training platforms, but their recommended strategies are quite different. Wealthy Affiliate’s main focus is on how to generate traffic organically with a lot less emphasis on paying for traffic, whereas Legendary Marketer recommends a hybrid strategy, but with quite a bit of emphasis on the importance of investing in your business on a weekly basis by driving some traffic via paid ads, instead of just relying on organic traffic.
2. Product Creation (Russell Brunson Style)
I want to make a clear distinction between product creation when dealing with e-commerce and product creation when it comes to the development of a software service or the creation of info products like for example e-books or physical books connected to a sales funnel. This is the reason why I labelled this product creation business model, the “Russell Brunson Style” model as I will use his business model strategy as an example of exactly how this online business model works.
The best way for you to really understand what a sales funnel is, if you are not already aware, is to actually go through a sales funnel yourself to really get a good grasp of how it works. For this reason I will share an actual sales funnel of Russell Brunson with you towards the end, so you can navigate through his funnel, should you choose to do so, in order to gain a deeper understanding. Saying this, I am sure most of us have navigated through sales funnels, knowingly or unknowingly before.
For those of you that may have been sleeping under a rock and do not know who Russell Brunson is, he is respected as one of the best online marketers in the world.
Now this may be a bit controversial and open for debate but Russell Brunson are one of those that believe that a website is not necessary for online success, but sales funnels are and that is what he primarily focus on in his business model. Although affiliate sales funnels are possible, they are usually not close to as lucrative as sales funnels that incorporates your own personal created products.
So let me give you a very short break down of some of Russell Brunson’s strategies which will also hopefully in a very simple way explain more or less what a sales funnel is, if you are not already aware of its meaning.
After a lot of experimentation Russell realised that the most important thing when it comes to online marketing is to build your email list and if you can make a lot of money in the process while building your email list then even the better. So Russell scratched his head and was thinking how this could be accomplished and that led to the creation of the sales funnels software he created, called, ClickFunnels.
Sales funnels are pretty much very impressive eye grabbing landing pages that are interlinked with one another to form what we call a sales funnel and as the customer is taken through this journey they will be offered various products to buy that will compliment the previous product offered in the sales funnel.
Usually it starts with the customer getting a valuable product for free by simply providing their email address in order for the gift/product to be send to their email address, but as soon as they entered their email address it will redirect them to another page (the second page in the funnel) where they may be offered another irresistible/tempting offer that compliments the free gift/product they just received, but this time they will have to pay for this product. The key to the success of sales funnels is to try offer massive irresistible value on the frontend of your sales funnel in order to get that precious email address that can be used for re-marketing purposes.
So here is an example of what Russell does. He wrote a very valuable book on how to generate website traffic called, “Traffic Secrets”, so what he does is to give this book away 100% free of charge, however customers needs to pay for the shipping and handling. Now Russell is actually making a loss here on the frontend but through a lot of testing he knows that it does not matter as on average his up-sales in his funnels will not only cover that cost but will make him a lot of money in the process, plus he has an additional email address he can utilise for re-marketing purposes. So what is this upsell in Russell’s funnel?
Well his book “Traffic Secrets” teaches you about how to generate website traffic, but then you need a tool to capture that traffic to get them on your email list and that is where his created software ClickFunnels comes into play and now we are talking big money as ClickFunnels costs $97 per month for the standard package or $297 per month for the platinum member package. Saying this, ClickFunnels is a fantastic product and as a result it has generated Russell millions of dollars. Russell Brunson just released his brand new ClickFunnels 2.0 built from the ground up in October 2022. If you are interested to read more about it you can read my article on this topic here: ClickFunnels 2.0 – Pricing, Release Date, Features And More!
Mike Filsaime, another top online marketer follows a similar strategy with GrooveFunnels, yet in a slightly different way. What Mike does is to give 100% free access for life to his GrooveFunnels software that offers quite a lot of functionality with the free account (overdelivering) in order to get that customer email address, as of course they need to create a GrooveFunnels account. Those customers that sign up for a free account will then be redirected to the next page in the funnel where they will be offered the opportunity to upgrade to a paid membership.
If the customer does not straight away decide to upgrade, then no problem as now that Mike has the customer email address he will continue to re-target the customer that signed up for free with subtle clever copy in the emails he will send out to emphasise the value offered via a GrooveFunnels paid account. This will eventually lead to a percentage of these customers to upgrade and it does not come cheap. The starter package starts at $99/pm whereas the pro package will set you back $299 per month. But just like ClickFunnels, GrooveFunnels is a fantastic product, so Mike Filsaime, just like Russell is making an absolute fortune from GrooveFunnels.
But now you may ask where does this leave me and you? As you may reason that not all of us have it in us to create our own valuable book or to develop a software like ClickFunnels or GrooveFunnels or even have the money behind us to even think about creating a software like ClickFunnels or GrooveFunnels.
Well, the thing is that it is probably inside all of us to be able to write a valuable book if we are willing to put in the effort in regards to the research and the grind of getting the book written on whatever topic it may be that your readers may find of great value. Remember that nothing just comes from nothing. I am perfectly convinced that it took Russell a lot of blood, sweat and tears to accomplish what he did which included a heck of a lot of hard work and dedication.
But let’s not overcomplicate it, let’s keep it simple. Maybe you are a fitness instructor and what you do for a living is to get people in shape and you charge a handsome fee for your services. As a fitness instructor I am perfectly sure with your knowledge you can quite quickly and easily put together a valuable e-book on nutrition, exercise etc. that can be offered for free on the frontend and then your up-sale will be to offer your personalised coaching/training.
So many people jumped on this band wagon when they were not able to attend the gym and personal fitness trainers made an absolute killing during the pandemic. So do not restrict yourself by staring at the accomplishments of others like Russell etc. and think this is not attainable, just be creative. You can do it and be super successful with this business model, as many others are. In fact, just go and have a look at all the testimonials, business models and ideas when visiting the ClickFunnels website.
- easy branding due to your own created products
- big profit margins
- perfect for sales funnels
- perfect for list building
- hard work to create your own quality products
- very likely that you would be required to deliver customer support
- depending on your setup and the size of your project, you may need to appoint employees
As promised, here are some sales funnels created by Russell Brunson, should you wish to see how a real expert goes about creating his sales funnels:
Sales Funnel 1: Traffic Secrets Funnel
Sales Funnel 2: Expert Secrets Funnel
Sales Funnel 3: Dotcom Secrets Funnel
Sales Funnel 4: One Funnel Away
3. E-commerce (Amazon FBA model)
The Amazon FBA (fulfilled by Amazon) business model is a fantastic business model if you are considering to build your own brand and if e-commerce is of interest to you. What makes selling on Amazon so amazing is that everyone knows and trust Amazon and therefore it instantly gives you that credibility.
But what is it that really makes Amazon stand out from the competition? It is of course their outstanding customer service, next day delivery and no questions asked money back guarantee. The amazing thing is that if you sell on Amazon then Amazon does absolutely everything for you, they even handle the customer support of your customers too, should you wish for them to do so.
With this business model there is also no need for you to have a warehouse to store your products as your products are stored at Amazon’s warehouse for a minuscule storage fee, you have no employees to pay and on top of that Amazon offers the best shipping fees you will ever find.
Amazon entitles you to sell globally with super fast delivery as Amazon have local warehouses all over the globe. If you wish to sell in different countries you may have to sign up for more than one Amazon sellers account. For example if you are only selling in the USA then you need to create a USA Amazon sellers account. If you would like to expand to Europe for example then you would also have to create a European Amazon sellers account. To have an Amazon sellers account is pretty cheap. It will only cost you £25 per month per Amazon sellers account.
So all of this sounds almost too good to be true, right? So what is the catch? The catch is simply that the competition on Amazon has become quite stiff and depending on the niche you choose will depend on how deep your pockets should be when considering advertising in order to be able to compete. For example should you choose the supplement niche or the beauty niche then you really need to know what you are doing as you are entering a very competitive market.
I personally think the big opportunity on Amazon lies in selling very unique bespoke products that will cut out most of the competition. Of course you need to do your market research very well and of course there needs to be a market for those particular products.
Besides just selling on Amazon’s website itself, of course many of these companies also have their own branded websites where they sell their branded products via their own payment gateway or they simply link their products to direct customers to Amazon where customers then complete the purchase.
All in all the Amazon FBA model is a fantastic online business model, but you will need quite a bit of startup capital to invest in stock, branding and advertising. One other important niche business model associated with Amazon which I have not mentioned is that many specialise these days in building super successful brands on the Amazon platform and then selling these Amazon businesses for millions of dollars.
- automated selling experience fulfilled by Amazon
- no warehouse and associated fees
- no need to appoint employees, unless your business is massively expanding
- option to sell globally
- best shipping fees
- best delivery experience for customers
- next day delivery
- best customer experience handled by Amazon
- more sales due to the trusted Amazon brand
- relatively high startup cost
- very competitive
- additional capital for advertising is essential, due to the competitive nature
- can lose your Amazon business if you do not adhere to Amazon rules/policies
- Amazon’s policies always favour the buyer in almost all cases
- evil competitors can leave false negative feedback on your products
- business registration required
3.1 How do I start selling on Amazon?
Once again this is not a project I personally think you should attempt to figure out yourself. The reason is that all the rules and regulations of Amazon can be quite technical and as it is a very competitive marketing platform you will stand no chance against others that invested in specialised Amazon FBA courses presented by experts when it comes to selling on Amazon.
I have personally worked my way through The Amazing Selling Machine course and there is just no way that you will pick up by yourself on all the tips and tricks that you learn from experts in this field like Matt Clark, the author of The Amazing Selling Machine.
Another top notch program when it comes to e-commerce, which includes the Amazon FBA model, is Six Figure Mentors. The difference with Six Figure Mentors (SFM) in comparison with the Amazing Selling Machine is that it does not only concentrate on the e-commerce business model alone, it gives you options and helps you to choose the online business model that is best for you.
Although the Amazing Selling Machine, as the name suggests, is an absolutely awesome course, Six Figure Mentors does not only provide you with the training/coaching aspect but they will put at your disposal all the resources and contacts they have too. Say for example you are thinking of creating a brand new product that you would like to launch on Amazon. Six Figure Mentors will make the creation of that product you have in mind possible, as they have development teams that can make your ideas a reality. In terms of price? Well SFM have different kind of price points depending on what it is you require.
If you would like to learn how to sell on Amazon then you may be interested to read my article: How To Sell On Amazon This article will give you a lot of information that you will struggle to find for free anywhere else, which you will see confirmed when reading the comments received by commenters on that particular article.
4. E-commerce (dropshipping model)
During the pandemic I saw so many people starting an e-commerce dropshipping business and the reason for this is that everyone was buying physical products like computer desks, outdoor gardening furniture, kitchen utensils and accessories, televisions, game consoles etc. So the pandemic was definitely the perfect storm to profit from this particular business model where there is no need for you to buy stock beforehand, as is the case with the Amazon FBA model.
This therefore means that you need a lot less startup capital than you would with starting an Amazon FBA model business. The biggest issue with the dropshipping model is that many times this process is not as automated as it is with Amazon and you have to personally deal with customer support, whereas with the Amazon FBA model Amazon handles everything for you from shipping to customer support.
Unlike affiliate marketing and the Amazon FBA model, the dropshipping method is a lot more hands-on and is not an easy business model to run as a side hustle, as when you are at work you don’t have time to deal with your dropshipping business and customers will have to wait for issues to be solved in the evening once you are back from work.
Saying this, there has been a lot of progress made in regards to the automation of e-commerce stores, but complete automation solutions as offered by big e-commerce platforms like Shopify, is a very costly solution indeed. Saying this, GrooveKart which I will talk more about in the next section integrates seemlessly with Orderlytics, Slingly and Dropified which offers automated e-commerce solutions.
- low startup cost
- no need for your own created products
- no warehouse/storage required
- low risk as you only ship products once it is sold
- no money invested in stock
- unlike digital or affiliate products, physical products can be advertised on platforms like FB marketplace
- lack of automation makes it a difficult business model to run as a side hustle
- have to deal with customer support
- refunding physical products that already shipped can be complicated
- fully automated e-commerce solution can be very costly
- signing up to payment gateways like Stripe may require you to have a registered business
- possibility that your suppliers may have run out of stock without your knowledge, which can result in selling products that are out of stock
- in most cases money does not clear in your bank account immediately, which may result in you having to fund client products initially from your own pocket.
4.1 How do I start an e-commerce dropshipping business?
Just like before I will always recommend that you do not attempt to start any online marketing business on your own trying to re-invent the wheel. If you are looking for an e-commerce dropshipping course and hands-on support to ensure your e-commerce dropshipping venture is a great success then I will highly recommend you to check out Six Figure Mentors (SFM).
Shopify is a billion dollar company that specialises in running e-commerce stores and as a result their platform is optimised to ensure optimal speed performance for your e-commerce website and they also offer top notch support. If you are going to choose Shopify then I will highly recommend that you check out a retail company called, Spocket that integrates seemlessly with Shopify that will entitle you to sell products locally or internationally based on your preference.
There are some amazing testimonials on Spocket’s website under their blog section. I would highly recommend you check out some of those testimonials. Today you have to try compete with companies like Amazon that has next day delivery on offer and in my opinion it simply does not suffice anymore to ship items from China via for example Ali Express if the customer lives in the USA or the UK etc. This is why the option that Spocket provides for local delivery whether you are in the USA or in Europe etc. is certainly an aspect to explore.
Another recommendation that I have for you is GrooveKart and you may be pleasantly surprised to know that GrooveKart is 100% free to use on a free GrooveFunnels account and you are able to create unlimited e-commerce stores. You may be forgiven to think that GrooveKart is sub-standard to Shopify, but you may be pleasantly surprised to find that both platforms are extremely good options. GrooveKart integrates seemlessly with Orderlytics, Slingly and Dropified which offers automated e-commerce solutions.
Shopify however will cost you $29.99 per month on the very basic plan and you also need to keep in mind that there are many apps inside of Shopify that are actually paid apps, depending on the functionality you require inside of Shopify. My recommendation would be for you to perhaps check out GrooveKart first, as it is 100% free to utilise and you have nothing to lose. If GrooveKart ends up not ticking all the boxes for you, you can then easily jump ship to the Shopify platform.
One big advantage of the Shopify platform is that the trusted brand creates trust with customers, which will likely aid in increasing the amount of sales generated.
5. Print On Demand E-commerce business model
Print On Demand (POD) is yet another fantastic business model to consider. A Print On Demand e-commerce business allows you to be very creative. You can instruct Print On Demand companies to create customised products to compliment your brand or to comply with the custom designs you created according to customer specifications.
The customisation possibilities are vast. Whether you want to sell custom designed coffee mugs, custom designed clothing like T-shirts or custom designed wooden chopping boards, the vast possibilities are only limited to your imagination.
If you are thinking about a Print On Demand e-commerce store then I highly recommend GrooveKart as GrooveKart integrates seamlessly with Printful, Teelaunch and TeeScape and as already mentioned you can use GrooveKart 100% free of charge. In fact you can create unlimited e-commerce stores inside your free GrooveFunnels account, whereas with Shopify it will cost you $29.99 per month per e-commerce store and that will be for the basic package.
- with companies like Printful it has never been easier to create custom designed products for your customers
- a fantastic way of branding your company
- low startup cost
- flexible design possibilities e.g on clothes you can choose to print or to embroider
- no warehouse required
- no storage required. Items are only shipped when sold. Similar principles to dropshipping.
- refunding physical products that has already been shipped out can be complicated
- have to deal with customer support
- designs may need alterations if the design is not 100% according to customer specifications
- payment gateway required which may require you to have a registered business
6. Freelance business model
The Freelance business model is usually service based and this is where you can make money online from your talents and skills. I am perfectly sure that you have heard of platforms like Fiverr, Freelancer, Upwork etc. before and there is a great possibility that you have ordered so called gigs from there before.
If you are familiar with these kind of platforms then you would know that people sell all kinds of services on there from article writing, to video creation, to website development, to even becoming your full time virtual assistant. You will even find that a lot of professional established companies in website development etc. may even advertise their services on these kind of platforms and they will of course charge a hefty fee for website development etc. due to them classing themselves as top established professionals.
This will probably be another kind of business model, but the related thought that just came to mind is how lucrative it will be if you was able to establish a platform like Fiverr, Freelancer etc. where you can literally just make money (via commissions) from the work all of these freelancers are generating on your freelancing platform. Saying this though, I do know that there is a heck of a lot going on behind the scenes of companies like Fiverr, which requires very expensive technical software and quite a number of employees to ensure the smooth runnings of the company. So I assume you would have to have some serious cash behind you in order to get a platform like Fiverr off the ground.
So although I am perfectly convinced that you can make very good money as a freelancer, the problem with this business model is that if you don’t work you don’t get paid. For many online marketers the dream is to earn money in their sleep while they are not working and this is certainly not going to be the case with this particular business model.
- make money from your skills and talents
- no real expenses as you exchange your skills and time for money
- great opportunity to establish yourself as a professional online
- can work from any part of the globe
- you only get paid when you work
- customer service required
- revisions may be necessary to meet customer satisfaction and some customers can be very picky
7. Dropservice business model
This online business model is a great way of making money from other people’s skills and talents without you having to possess the skills yourself and without you having to do the work either. With this business model you outsource the work to professionals and you put a mark up on the price of the service the customer requires in order to generate a profit.
If you are able to plan the professional services your website has on offer very carefully and you are able to recruit top professionals that are able to deliver a top quality service, then you may be able to erect a super lucrative dropservice business.
The biggest drawback of this business model is that you have to rely on the professionals you outsource to. They have to be reliable in order for you to be able to deliver a reliable service to your customers. The most important questions to ask when vetting outsourcers are whether they are able to deliver on time and whether they are able to deliver a top notch quality service.
- no need to do the work yourself
- make money from other people’s skills and talents
- a huge variety of skills to choose from
- low startup cost
- you are dependent on your outsourcers’ reliability
- trial and error to find reliable outsourcers that are able to deliver a top notch quality service
- hands-on job that requires very good organisational and co-ordination skills
- good relationship required with both customers and outsourcers
- customer service required
7.1 How to start a Dropservice business?
Just like you would choose a niche for any other online business model you should also decide on a specific niche when it comes to your dropservice business. Once you decided on the niche you can simply visit freelancer sites like Upwork, Freelancer, Fiverr etc. and seek out reliable outsourcers that can deliver the services for your dropservice business. In addition to this you can simply do a Google search too in search of outsourcers to deliver the services you require.
So what platform should you use to deliver your dropservice business? Well, this will really depend on what services exactly you will be selling and how exactly you would like to go about this process. Options for you to consider are WordPress, GroovePages + GrooveBlog or GrooveKart or perhaps even Shopify.
GroovePages, GrooveBlog and GrooveKart are all part of the GrooveFunnels suite and I am sure everyone is probably familiar with WordPress and Shopify.
Should you decide to go with WordPress then I would highly recommend the Astra WP theme and when considering website hosting, A2 Hosting comes highly recommended. To see why the Astra WP theme and A2 Hosting comes highly recommended you can visit my “Marketing Success Document”.
In this article I have provided you with 7 online business models which I think is certainly worth exploring. I hope that this article got you brimming with new business ideas and new business opportunities.
Let me know in the comments section what you think about these business models mentioned and which of these business models appeals to you personally. Is there any other types of business models you believe I should have definitely included in this list? Please feel free to let me know your opinion in the comments section.
Income Disclaimer: Please note that there are of course no guarantees that you will be able to replicate the results as set out in this article and the article links provided. Although some income generating systems may lead to quicker results than others, no success was ever created without hard work and dedication. Saying that, it is of course true that some earn shed loads of money online and if others can do it of course you can too.
Affiliate Disclaimer: As an affiliate, commission on sales may be generated, however it will be at no extra cost to the buyer whatsoever. Additional bonuses may or may not be on offer to the buyer when doing so and in some cases the price paid through affiliate links may be lower than the price advertised by the vendor, due to exclusive special prices offered to affiliates by the vendor.