Online business models

Online business models

In fact business models are one of the most argued features of the World Wide Web. However, the knowledge about this features are shallow. Nowadays there is so much talk about how the World Wide Web has changed the traditional business models.

In the basic form, a business model is the method of doing business with which a company can sustain itself. In another word, the business model explains how a company makes money by indicating where to point at. It explains business subjects including finance, operations, entrepreneurship, and marketing.

In best case scenario, the business model is quite simple, which means; a company produces a specific product and sell is to customers. If everything goes well the company gains profit out of it. On the other hand, some models are more complicated. For instance broadcasting, radio and television programs are free to everyone. The broadcaster is part of a complex network of narrators, content creators, advertisers and their agencies and listeners, etc. How much and how they make money is not very clear!

Internet commerce gives the opportunity to the new kind of business models. However, it is also likely to reinvent models. For example, auctions. It is one of the oldest forms of brokering is setting price on valuable and unique items. The World Wilde Web has popularized the auction model which is applicable for selling-buying the wide rang of the products and services.

Online business models

There are many different kinds of the business models in web. Some of the most popular ones are:

  • Brokerage Model Brokers:
    • This model contains market-makers. They bring sellers and buyers together and ease the transaction through internet. Nowadays brokers play an important role in online web business. This model role in market can be categorized in three different categories.
      • 1. Business to Business
      • 2. Business to Customers
      • 3. Customers to Customers
    • Normally a broker charges a fee or commission for each transaction.
  • Advertising Model:
    • This model is quite popular is based on web advertising, which is like the advertising in media. The web site provides content and services mixed with the advertising massages in the form of the banner ads, text ads, etc. What is very important about this model is, a direct relation between the profit and the viewer of the web site when the viewer traffic is high the profit will go higher. One popular kind of advertising model is business directories in which business owners register their business information.
  • Community Model:
    • The capability of the community model is based on user reliability. Users have a high investment in both time and emotion. Profits from this model can be based on the sale of ancillary products and services; or profits may be together with relative advertising and subscriptions for premium services. The Word Wide Web is very much suitable to community business models and today this is one of the more productive areas of development.
  • Information diary Model:
    • This model is based on data about consumers and their consumption habits, this information are important for target marketing promotions.
  • Affiliate Model:
    • This model provides purchase occasions wherever people may surf. Affiliate model offers financial motivations to affiliated partner sites. The affiliate model is naturally well-suited to the web.
  • Manufacturer Model:
    • The manufacturer or "direct business model" is expected on the power of the web to allow a manufacturer, for instance, a company which produces a product or service to reach buyers directly. The manufacturer model can be based on effectiveness, promoted customer service, and a better understanding of customer favorites.

The models can are applied in different ways. Furthermore, a firm may merge several different models as part of its general Internet business strategy in order to gain more benefits and this is what a producer should think of.

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