Selecting the right business model for a new online business

Insights from Icarus Media Digital

Business models defined

In the context of this article, we use the term business model to define how a business generates revenue.

Business model considerations

When selecting the best-fit business model, there are many aspects to consider, including:

eCommerce

These days you can find most products and services available online through electronic commerce. The industry has four major categories:

Advertising business model

Businesses that invest the time to create web presences that attract high traffic levels and build trust with engaged audiences are valuable to brands that want to get their messages in front of these website users.

Subscription model

A subscription model occurs when your client pays a recurring fee for access to a specific product or service. It’s a common model with SaaS products such as customer relationship management tools in the B2B market, plus content streaming services such as Netflix and meal delivery models in the B2C market.

Freemium model

Another take on the subscription model is the freemium model, in which you offer a level of access to a product or service for free for life. This approach can effectively build trust with prospective buyers who see they have nothing to lose by giving the offer a try. Some may stay as long-term users of the free option, while others will upgrade if they can see the compelling value.

Affiliate model

An affiliate model is one in which your business offers a commission to individuals who bring in sales for your products and services, typically through promoting their unique affiliate links for your products.

Conclusion

Selecting a robust business model for your value proposition is a necessary foundation for creating a successful business. However, this model doesn’t need to be static over time. Many businesses start with one means of revenue generation, which they master, and then stack on additional income streams over time to diversify and grow the business.

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Icarus Media Digital

At Icarus Media Digital, we create new ventures from the seed of a new idea, right through to its launch and scaling a new, successful business.