The Internet holds out the promise of untold wealth, at least that is perception some ads and articles may give to people when it comes to making money online. In reality, very few business models can successfully be run exclusively via the Internet. However, some people rely on the Internet for deriving at least a portion of their income, working with proven business models and enjoying profitable returns as a result.
To that end, we’ve identified six business models suitable for the internet. There is some overlap between some of the featured models; perhaps mixing and matching is the best way for you to derive a profit.
Message boards, forums and weblogs with a strong following can provide income for the owner of that site. According to Professor Michael Rapper of North Carolina State University, popular Internet sites can make money through the “…sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services.”
Pay-per-click ads strategically placed on web pages can bring in some income.
eBay gave rise to the term “PowerSeller,” people whom the Internet merchandising giant describes as having “achieved eBay requirements for sales volume, customer satisfaction, policy compliance, and account standing.”
How much that sales volume is and what profit is made is rarely published by PowerSeller’s themselves. However, the size of some of these pages and related sites is a clear indication that the demand for online shopping remains strong.
Companies such as Paypal, eBay, and Orbitz make money selling a service such as money transactions or goods including hotel stays and books. Operating as brokers, their business models are designed to bring customers and sellers together with small fees charged usually to the buyer as a way for them to derive income.
A Rollins College case study of Paypal revealed that the primary source of Paypal’s income comes from interest made on user balances, more so than what they make on transaction fees.
For web communities as well as for people who own a blog or website, affiliate income can be derived through the placement of banner ads. When visitors click on an ad and purchase a product on a retailer’s site, the retailer gives a commission for each transaction.
Third parties usually bring advertisers and sellers together, handling the establishment of accounts, ad services and payment of commissions.
Retailers need not rely on a physical location to sell their products as the Internet is a “global mall” to web users. A virtual merchant or what Rapper calls “e-tailers” derive all of their business online.
Click and mortar businesses utilize the web and physical locations while a bit vendor conducts sales and distributes product exclusively over the Internet. Bit vendors include eBook sellers and music download services.
For retailers who want a storefront but are not interested in retaining inventory, dropshipping is one way to establish an online business presence. Under this arrangement, customers purchase an item from your website and then you notify the supplier who processes the order on your behalf. Your profit is derived from your price markup which is the difference between what the retailer charges you and what you charge the customer.
In all, making money online is possible if you study your niche and take measured risks. Quick money is rarely possible no matter what the so-called experts have to say.
Pictured: Public Domain Photo Courtesy of Wikipedia
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