Overview of the Most Successful Business Models for Making Money Online
A free video tutorial from MindMekka ®
Motivate. Educate. Elevate.
4.1 instructor rating • 54 courses • 122,595 students
Learn more from the full courseHow To Start An Online Business On a Tight Budget
Build an online business with minimal upfront cost through smart planning & utilisation of free and low-cost tools.
38:11 of on-demand video • Updated October 2018
- Build the key components of your online business
- Know about the best internet tools that are free and budget-friendly
- Accurately identify and estimate the unavoidable costs of certain online business models
- Use proven processes that will allow you to continue growing your business at minimal cost
English Smart strategy is essential before you launch any type of business. Firstly, you need to figure out if there's actually a demand for the product or service you plan on offering. Then, you need to figure out what business model you're going to use, your business model should match your skills and passions. It should also take into consideration how quickly you want to be up and running. Don't forget to consider things like simplicity, existing technology and online tools and services you might need. This type of planning allows you to shop around for the most attractive prices for the services you need to start and maintain your business. Imagine for a moment that you want to sell mens sneakers online. Google mens sneakers without quotation marks. Then look at the following. Are there any advertisements? Those sections at the top of the page and on the right hand side of your search results are where people will be advertising. If you see a lot of ads that's a positive sign. Are there many search results? That's great. That means there are many people talking about mens sneakers. How many results are there when you search for mens sneakers with quotation marks. A number under fifty thousand is excellent. The lower the number the less competition you will face. Click on a few web sites that look like they are selling sneakers. See what your competition is up to. Get a feel for the technology and services involved in the market you wish to enter. Using Google is a simple no cost way to effectively test the market for your product or service. Many successful online business owners still use this as a first step when testing the feasibility of a new business idea. Once you've done a little testing of the market you need to think about your business model. Here are a few examples to pick from. Selling info products online is one of the most common internet business models and it's a simple budget friendly business to start. You will need a website but a simple WordPress.org template or free blog will suffice. You will also need a product. Write an ebook or report about something you know a lot about. Save that as a PDF file, you now have a product to sell. That is all you need to get started. First off you develop a reputation as an expert in a certain field. You can start with little or no money. If you know how to build a website or blog you can get affiliates to sell for you. And then they do all the heavy lifting when it comes to marketing. You can upsell additional products to customers, build an email list that makes money on autopilot and continually create and offer more products. The largest drawback is that you can't charge a lot of money for a simple ebook. You're not going to be making many $100, $500 or a $1000 sales that way. You can create an in-depth course full of audio video and tons of content so that you can justify a higher price tag. But that involves greater costs and a lot more of your time. Selling information to the end user means that you'll have to deal with customer service issues, follow up and refunds. Unless you create a very unique resource. You will also be battling with other information marketers selling the same type of product or download. Do you love music? Perhaps podcasts and interviews with experts are more your thing. Maybe you love videos and movies? If so why not build an online business selling media downloads. There are a lot of similarities between this online business model and selling info products. The biggest difference is technology. It is much simpler to store and transfer content as text than MP3's, MP4's and other type of audio and video files. Refer to the section we just covered on information marketing. All of your advantages and disadvantages are the same. With the exception that transferring media is more expensive process. It is also inherently greater possibility of technological problems. Are you really good at some type of service you can deliver over the internet? Writers, programmers, graphic designers, video editing specialists and a whole host of others make a good living by selling a service online. Plus you don't even need your own web site to do so. Freelancer is a site where you can sign up for free to offer a wide variety of services, Upwork is another similar website. On Fiverr, you can introduce low price services starting at $5 and upsell your customers into higher dollar projects. There are hundreds of online companies where you can sell your expert service without having to establish a Web presence of your own. The benefits here are zero cost for entry, instant startup and the ability to develop a global reach quickly. Create a great reputation and you can make some serious money. You don't have to worry about getting paid, since these types of freelance Web sites monitor and handle every transaction. On the downside you don't own your business. If the site you're advertising your services on decides to make some significant policy change your input is not required. Lastly on the bigger sites you're competing with many who offer the same services as you. E-commerce solutions and store based web sites are another great web business model. They both function the same way. You build an online store and fill it with links to physical items. You can sell products from your physical business or someone else's. Imagine building a miniature Amazon on a much smaller scale and you understand the basics of running an online store. To run an effective and profitable online store, you'll need to have the following knowledge and skills. Or hire people to perform those functions. Knowledge of e-commerce solutions, web design, graphic design, online offline business integration, copywriting skills, domain name registration and hosting, customer service and management. Running an online store or employing a similar e-commerce solution can be daunting for the first time web business owner. You have to make sure your supply chain is effective. You have to understand the logistics needed to effectively deliver a physical product once an order takes place. It's more expensive than a lot of other virtual operations to set up, run and maintain. An online store allows you to sell your own physical products. There are software packages and platforms, for example, Shopify that do all of the coding and programming work for you. You can scale up easily adding as many pages to your site and selling as many products as you like. Launching and managing an online store or e-commerce business model is not the easiest online business. However, you own your website, you are in total control. You can scale up operations endlessly. Just keep in mind that this is a more hands on business which will require a greater investment from you in terms of time and money. Have you invented or designed a physical product that you just know will be a big hit online? Great, just remember there are advantages and disadvantages of selling physical online products. They are basically the same as the section we just covered on running an online store for an existing physical business. You can set up a simple or intricate web site. Your entry cost to market can be low or high depending on your type of product. You will need content written, possibly a blog, traffic, customer Follow-Up, shipping solution and e-commerce management system in place. Affiliate Marketing is the quickest and easiest way to start earning money online. Being an affiliate for someone else's product or service is also probably the least expensive online business option. You can start with minimal skills but if you know how to build your own web site and generate traffic those abilities will definitely help. When you send traffic to someone else's web site and they make a purchase, you get paid a commission. That is all there is to affiliate marketing. Now it's beneficial to have your own site and established online presence and an existing audience to which you can market the company's offerings. You will make more affiliate sales this way. But even if you have none of those things you can still start this type of online business today. All you need is to sign up to be an affiliate for a particular company or join an Affiliate Network. I've included a list with direct links to some of the largest and most reputable affiliate networks under the resource section of this lecture. Go and have a look at some of them and you'll soon get the gist of the whole thing. Remember please do not hesitate to ask any questions you might have. Once you have signed up as an affiliate marketer you'll be given a specific URL or link that is unique to you. You create a hyperlink for your affiliate URL to content on your web pages. You can also send it out to some or all of your email contacts. Tell them what products or service you are promoting and ask them to click on that link for more information. When a person clicks on your link, software at the destination Web site recognizes that you are the afilliate who has reeled in the prospective client. If a sale is made you receive a preset Commission. Many sites raise your commission level when you sell multiple products in a given timeframe, usually a month. This way they incentivize the top selling affiliates to ramp up their marketing efforts. You can literally get started in just a few hours. You don't necessarily need a web site. You don't need your own product or service. Commissions run up 100 percent. Your affiliate company handles the customer services issues. You don't have to keep any product on hand. There are thousands of companies offering information products, services, physical goods and media downloads that are happy to pay you a commission if you sell the products for them. You are not in control of the company. The company you are sending traffic to you can cancel your affiliation at any time for any reason or no reason at all. You can work diligently and spend your hard earned money sending qualified leads to company or working for as an affiliate marketer. If they don't work equally as hard to close the sale, all of your time and money has been wasted. Affiliate Marketing is a starting point for many who seek to make money online. The business model can have you up and running quickly. This is also a no cost or low cost web venture and one that gets you started without owning your own product. Cost per action CPA. It's a lot like affiliate marketing. The most significant difference is that you could earn commission even if no sale takes place. Your responsibility is to get people to take some type of action. For example you get paid each time you send a websurfer to a company site and they fill out an email form, join a newsletter or sign up for a trial membership. Companies that pay CPA commissions know exactly how much a new customer is worth to them. They also know how many people out of hundred end up buying their service or product. With these two pieces of information they determine how much they're willing to pay for each lead or prospect who has taken the prescribed action. Let's say particular online business makes a hundred dollars in profit when they make a sale. It takes them roughly 10 leads to generate one sale on average. That means every prospect you send to them is worth ten dollars to that company. So they're happy to pay you $5 per lead through a CPA business model. All the same pros and cons of affiliate marketing apply to CPA marketing. Once you have a web business up and running you can benefit from advertising. There are some negatives as well as positives, you need to consider though. You first have to be able to show potential advertisers that your site receives a decent amount of traffic. In many cases the companies advertising on your site will provide its own graphic designs. However you will still need web design skills to incorporate them into your site. Another negative aspect is that you're going to have to spend time and money chasing down potential advertisers. On the plus side this can be a very lucrative revenue stream. You don't have to worry about customer service problems generated by any sales that come from those advertisements. Once you develop a heavy stream of traffic, it's pretty easy to find someone who wants to pay you to advertise on your site. You are in control. You can increase or decrease the number of advertisers at any time. Locking in quarterly, semi-annual or annual advertising contracts is another benefit of this online business model. When considering the pros and cons of each online business model. Think about your skillset, what do you like to do? What are you good at? Of the things that you need to accomplish, how many can you outsource and what will you have to handle yourself? Matching your mindset, character traits and skills to a particular type of online business can reduce your frustration and greatly improve your odds of success. Looking at the online business models we've just covered, here are a few examples of how your skills might match up with the different models. For some internet businesses a simple blog will suffice. However for others you'll need a multi-page website with lots of technical requirements. Paypal is an online payment processor that is easy to integrate into your site or blog. However you may need a full blown onsite e-commerce solution instead. If you love logistics, handling a more involved sales cycle and are at the high end of a shoestring budget, building an online store might be right up your alley. If you don't want to have to deal with much technology, affiliate marketing might be the way to go. Or simply selling other services you excel at. Are you sending out a monthly newsletter? Are you great at creating videos and audio content? Maybe you can write persuasively, or you're good at teaching. In that case, a simple information product business or blog with advertising on it might be perfect for you. It's also important to clearly define your business goals. Maybe you don't care if you generate a single penny. Some people operate an online business as a way to send traffic to their physical business. Others establish an online presence just to build a following or position themselves as an industry leader. The key is to match your business model, product and niche with your skill set. Taking into account the positives and negatives we've covered for each model. Now that you understand the most common types of online businesses you need to understand what costs are involved. We'll be taking an in-depth look at this in the next section.