Five Models For Internet-Based Small Businesses
When you think about Internet businesses, what comes to mind?
Maybe you think about Amazon.com. Amazon, more than just about any other business on the Internet, shows the true potential of the Information age. Its rapid growth and amazing success is what every ecommerce site since has aimed for.
Maybe you think more about a site like this one. Maybe you think about Internet business in terms of context ads and referral programs. Without a doubt, this is a viable way to do business online, as well.
Whether you already have an Internet-based small business or whether you’re thinking of starting one, it can be worth taking a minute to think about your overall strategy for making money and ask the question…
“what is my business model?”
Here are five common models for Internet-based small businesses:
The Ecommerce Site
This is the real-world retail business translated to the Internet. In a commerce model, you sell things and ship them to your customers.
The Content Site
Probably the easiest type of Internet business to start, a content site works like advertising on network television or in magazines. You put content up on your site and then serve ads or referrals to specific businesses, who then pay you for those leads or your ad space.
The Portfolio Site
The portfolio site doesn’t sell anything directly. Instead, this kind of website offers information about your products or services. This type of site serves to enhance an offline business.
The Community Site
A community site is the equivalent of a bulletin board at your local grocery store. Community sites are wonderful at building traffic. Most often, they revolve around a specific group or special interest.
The Hybrid Site
Most Internet-based small businesses don’t strictly adhere to just one model. A handyman site, for example, might provide plenty of content and offer context advertising, while at the same time promote the services of the handyman for a particular geographic region. That same site might have an “ask the handyman” forum, too, that fosters a sense of community.
Finding the right model, or the right balance between models, is a key to the success of your Internet business.
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I have to say blogging is a mixture of content and community type. Don’t you think?
Absolutely but then we would simply call Wallmart a pharmacy, or a garden store or one of the other departments. Not all blogs create community but in my opinion if you are serious about blogging then YES you want to create community.
I guess it comes down to each ones opinions though.
I agree.. most of the time.. it’s a little of everything. You provide (a)content for your (b)community, and sell them something (e-commerce)..
ChiQ Montess last blog post..Chrono Press Theme in 10 Flavors
Defining what your business model is is SO important. It’s key because as your website grow, if your business model isn’t right, you’ll reach a point where it’s impossible for you to grow and get some more market shares.
Ask a website owner (blog, ecommerce, whatever): “What is your business model?”. Often, you won’t get an answer simply because people aren’t seeing their website as a true business and haven’t invested the time to really define their website.
Your business model will also define how you monetize that website, so it’s important to know where you’re going. It’s not because you don’t monetize your website at the moment that you don’t have a business model…How do you plan in the FUTURE to monetize it? That answer will be in your business model/plan
Good point you’ve raised there!
Ben – frogstr.coms last blog post..Google killed it!
Great idea, but I don’t think you’ve thought this through in the details. A business model is how you make money. Everything else is marketing. A content site is not a business model, advertising sales is. Affiliate sales is a business model for a blog, but the blog has content. If you do both, then your business model is advertising and affiliate sales.
A portfolio site is not a business model. The business model is the sale of services (whether online or offline). The portfolio site content is marketing.
A community site is not a business model, and for this one you didn’t even offer a suggestion for how a community site could make money. The business model commonly applied to community sites is advertising, which usually ineffective, because the community is immune to the ads. A better business model to apply to a community site is a continuity program (a recurring fee).
Michael Martine – Remarkabloggers last blog post..How to Use Windows Live Writer
I see your point… I think the wording of the post was not as it should have been and perhaps it was just the mind set at time of writing. From your point, the business model of this here blog (for example) is actually the lead capture and products/affiliate sales… or perhaps i would not even include lead capture because the end income source is the affiliate and product sales.
From that definition (and more then likely the correct one) of a business model that makes 100% sense… but that was not the definition used when the post was written and therefore it should be called “The 5 Marketing Methods”.. “The 5 Content Methods”.. no not that either…. hmmm how about I just leave it as is
Nice post. I writ about these kind of topics in Spanish. Maybe I’ll post a Spanish version of this one linking back to your blog, of course.
Keep the good work flowing
Just give credit where it is due
True stuff Cow, and Ben hit it on the head as well. I think for many though, it’s constantly changing, or evolving. What starts as a content site, may turn into a community site and eventually an ecommerce site as well.
I agree, a blog allows you to be all of these if you wish, or just chose a couple to merge.
Normal Joes last blog post..Do You Hate Your Boss?
Good point there Normal Joe, it’s also important to leave the door open for change. It’ good to stick to the plan, but if there’s a good opportunity out there you have to be smart enough to seize it even if it’s not in your plan!
Ben – frogstr.coms last blog post..Google killed it!
When i finaly started to realize what blogging was realy about… I was embarrassed as to how narrow minded I was towards them in the beginning.
I honestly feel that 100% of everyone should create a personal blog… the things it teaches you are incredible. Whether it be a wieght loss, arthritis, photography or IM blog… just start one that you are passionate about.
Blogging is a type of community for most blogs I agree with the comments. I think it depends on what blog though because some blogs the blogger themselves don’t participate in the commenting as well by answering comments so in that case it is not as much of a community but by definition still could be.
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I have chosen a hybrid of a community/content/membership site. My revenues are not generated from ads but from membership. And I use my blog as a marketing tool. It allows folks to get to know me on a more personal level which is necessary to create the relationship.
Donna Amoss last blog post..Launch of the International Association of Solopreneurs
Great post cow. A lot of the previous commentators pointed out that a lot of people uses a mixture of them. I think we should plan to stick to one and make it work first.
As the ball rolls, we evolve and follow the direction it goes.
But this is not what I see in a lot of places. I find a lot of people try to achieve too much out of their website in the beginning that it becomes unnecessary distractions for their readers. You’ve seen it before – e-commerce sites with adsense, content, a sales letter and so on.
Andre Thomass last blog post..The Duplicate Content You Didnt Realize You’re Producing – Part 2
hey, where’s the “landing page” business model site?
My site is (will be) an old fashioned Ecommerce site, but it also my evolve into something else. Blogging brings in about 80% of my traffic so far.
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Nice information. I like community concept mostly. Really community websites are great source of traffic. Secondly I think content oriented sites are useful in internet business.
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My plan is to develop a variety of websites that are niche specific and adhere to one or two of these models that you have listed. All except the ecommerce site in the sense that I will be shipping something.
I don’t have any community sites, per say, as of right, but am developing one with my personal blog. Community like this one in that you have a following that comments and discuss your post here. That is great because it allows you to motenize the situation, while building and fostering group participation and loyalty.
In due time, I hope to have the level of success and opportunity that you have.
To the Cow!
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Great discussion.
I have many different sites that fall under The Content Site model.
What model would you say a regular salesletter website that sells info products falls under?
- Mel
Golden Thread Bonuss last blog post..Golden Thread Review
My main business is based on a pure ecommerce site. But it is too dangerous to put all the eggs in one basket. I was thinking to build a community site such as forum. When I was doing research, I found too many forums were like a ghosttown. without enough time, effort and experiences, I guess it is not easy to build a community site. So, I’m now focusing on content site.
I use a combination of all, and for me good content in balance with monetazation proves most succesful.
JR @ Internet Marketing Strategiess last blog post..Another Google Page Rank Update!
Yes, the small business models, I suppose, are for generating an income. Monetization models. The site types are for generating traffic from content. I use my blog for traffic focused towards my latest project. I like the sharing here at John Cow. And the Kahuna tools, especially Comment Kahuna! Keep thinking up monetization models!
Geoff D.
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Thanks for sharing the info. All of them are important in deciding which one suits our taste.
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I usually agree with your article content, but in this case I am sorry to say that I do not share your views….
[...] Five Business Models for Internet Businesses — Great, simple post breaking down the key business models that could make you serious money online. It’s important to understand how things are, so you can build from there. [...]