18 Dec Choosing the Right Web Business Model
There are a number of different ways that you can set up an internet business. Think about all the different types of web business models that you have seen online. There are catalogue sites, one-product sites, there are information sites, sites that sell information, sites that contain content for the purpose of generating advertising revenue, web sites that focus on selling a product unique to itself, web sites that sell other people’s products, and web sites that exist for the purpose of simply generating a mailing list that can be used to direct visitors to any one of the other web models.
When you first get started, you must decide which of the models will best suit your current skill level and type of product or service you choose to sell. It is advisable to start with only one web model and become quite good at it, rather than trying to create several web models at first.
One internet business model that has achieved some success as of late is that of the content-based site. Based on the combined principles of search engine traffic and advertising, content based sites are designed to offer
Single Product Model
One of the most common models for beginner and even many of the profitable internet marketers is that of the single product web site. Many of the profitable internet marketers, although they may currently have multiple products, still sell each product from its own web site, sort of as a stand-alone product or business. One advantage to having a single-product web site or business is that you can focus on becoming very good at selling that one product. With literally millions of people online buying things everyday, it is often easier to become extremely good at one type of product or to test and tweak one web site, than it is to do the same with many products or web sites simultaneously.
Multiple Product Model
Catalog Product Model
With a catalog web business model, you will have an assortment of related products that can easily be marketed from the same web site. An example would be that of a candle web site, where you would have a number of different candles for sale, and perhaps some related products like candle holders and lighters. Another example would be that of a pet supplies web site, where you would market a number of different pet supplies from one web site. These are all related items which complement each other in some way, and the assortment of the items would benefit, rather than detract from, the sales process.
If you are just getting started, you certainly want to avoid setting up a ‘garage sale’ type web site, where you sell a little bit of everything. The reason for this is that you will have a difficult time attracting the right kind of traffic to purchase your products. If indeed you have an interest in selling a wide variety of products that are generally unrelated, consider using someone else’s web site that already has traffic geared towards that type of selection of merchandise, like eBay.
Sales Funnel Model
A sales funnel model is one in which you have a series of web sites or web pages that sell a series of related items to the same individual. A sales funnel can be extremely profitable when managed correctly.
An example of a sales funnel would be a set of information products that have a related them. The beginning of the sales funnel might be a free item, and then once the visitor has chosen to purchase that free item, you would direct them to the next item in the sales funnel, perhaps a $10 or $20 product. Once they have purchased that product, they would next be directed to purchase an even larger, or a more in depth product that might be priced at $40 or $50. After that, there might be a $100 product, and even a $500 to $1500 product.
The advantage of using a sales funnel is that the lower priced items help the customer develop trust in the business or product offering. It is a small decision to accept a free item, and once the person has done that, then it will be easier for him to open up his wallet to purchase the $10 or $20 product. Once again, when the customer has purchased that product, and it fulfills all the expectation created by the sales letter or web page, then there is less resistance to purchasing larger product. And the same principle will hold true as you move up the price scale in the sales funnel.
Some of the most successful individual internet marketers have used this technique to create large fortunes and very successful web businesses. Just think about how fewer products you have to sell at $500 than at $10, to get to a certain income level. And the sales funnel allows you to slowly but surely build until you have created enough trust to sell the higher-ticket items.
List Based Model
The list based model is another popular web business model, especially for the information vendor. By building a list and marketing to the list, rather than sending web visitors directly to a sales page, you are able to repeatedly send traffic to those same web sites, and capitalize on the effectiveness of repeated exposures to build a strong business. For example, a website might normally have a 1% conversion rate, meaning that on average, for every 100 visitors that views the site, 1 of them purchases the product. If you were to put the visitors to that web site on a mailing list first, before showing them the web site, then you are able to send that visitor to the web page more than once, increasing the odds that he might purchase. In some cases, you might find that you can sell as many as 10% of the individuals on your list; if you had sent those subscribers directly to a web site rather than adding them to your list first, only 1% might have purchased.
The list based model can be used to ultimately create traffic to any of the web business models discussed here. The list simply serves as an intermediary step that allows you to ultimately squeeze more profit out of the same set of visitors.
Affiliate Marketing Model
The affiliate marketing model is one in which you send visitors to other people’s web sites and when they make a purchase, the other web company sends you a commission for referring the customer to their web page.
The affiliate model can be combined with just about any of the other models discussed, and is convenient because you do not need to create a product or even a web site to be able to send traffic to an affiliate web site.
The list building model is frequently used in conjunction with the affiliate marketing model, as the conversion rates on a visitor in a list is often much higher than the one-time conversion at the affiliate web site.
How the Models Can Work Together
Although the web models described here are the basic fundamental web models that currently produce the bulk of income online, these models can work together synergistically.
You can build a web site that markets a number of different affiliate products, or you can create your own product, and then market an affiliate product to your customers. In conjunction with just about any of the models, you can build a list to continually expose your web visitors to the selected web sites multiple times for additional profits. You can have a mix of affiliate products and your own products. You can have a catalogue-based web site that also sells a specialized unique product. You can have a catalogue-based web site that serves as an entry point for a sales funnel. With a little creativity, you can come up with a number of different combinations of web business models that can work together effectively.
However, considering the fact that you are probably just getting started online, it is advisable that you start with a simple business model and as your business grows, you can consider expanding it or integrating additional business models.