Internet Small Business Models

Part 1: How to Make Money Online

Make money online - start an online business.
Working from home can be one advantage of an online business.. Image (c) Natalie Avakian / Getty Images

A successful online business can truly be a dream come true, giving you both an income and the ability to work at home.

But like any other business, starting an online business that will be successful takes planning and effort. The very first step, even before you write your business plan, is to figure out how you're going to make money online. Obviously, you're going to sell products or services, whether they be stuffed toys or nutritional information.

But what online business model are you going to use to entice customers to buy what you're selling?

Here are seven different online business models for you to choose from so you can get started making money online.

1) Ecommerce Site

The classic ecommerce site, designed to make money online by selling products, has both an online catalogue and a shopping cart. You can set up your own online store from scratch or choose one of the many complete online store solutions to start an online business such as eBay's ProStores, Shopify, Canada Post's Ecommerce Solutions or osCommerce. (Note that these are just four of the many options available.)

The great advantage of using a "prefab" online store to make money online is that hosting, Internet merchant accounts and the ability to accept payments online is often included in your online store package. (See Online Payment Options for more on how to accept credit cards, debit cards and PayPal on your website.)

Tricks to Success: multiple payment options, attractive, easy-to-use catalogue

2) Sales Letter Ecommerce Website

Like the infomercials on TV, these websites make the pitch, focusing on educating potential customers on the benefits of the products or services being sold. Unlike television infomercials, this type of online business model is long on copy and short on pictures.

As a website visitor, you can often recognize this way to make money online at a glance; the copy often begins with a question directed at the potential customer (such as "Would you like to increase your sales by fifty percent?"), and involves a lot of scrolling as benefit after benefit is revealed, usually backed by testimonials from satisfied customers. Time-limited and special offers are common.

If you're thinking of starting an online business, do not shy away from using this online business model if it's suited to your products and/or services. The reason that so many sites like this still exist on the 'Net is that the model works. And many professionals now use tasteful versions of this type of site to sell their services, particularly professional speakers, coaches and consultants.

Tricks to Success: sincerity, well crafted copy

3) eBay Auction Model

This is a variation of the first online business model I presented, but instead of using an ecommerce site to make money online, you use someone else's.

Although eBay Stores are available, you don't actually need one to sell products through eBay - you can sell online by using eBay's auction system. Getting set up to sell on eBay is easy; as you'll see on this How to Start Selling Page, all you have to do is register, sign up for PayPal if you wish, and fill out your first Sell Your Item form.

The eBay auction model is especially attractive to people just starting an online business. People who want to make money online often use the eBay auction system as a cheap and easy way to get started and test demand for the products they want to sell. Then, if things go well, they move on to an online store through eBay or some other provider, or develop one themselves.

If this online business model appeals to you, 7 Tips for Selling On eBay will get your eBay selling efforts off to a good start.

Tricks to Success: well crafted copy, good product photos, excellent feedback

4) Stand-Alone Blog

Blogs are popping up all over the 'Net like mushrooms on a damp forest floor. The beauty of blogs is that anyone can self-publish their work online easily and cheaply. While many blogs exist just to get a person's thoughts and ideas out there, others are attempts to make money online.

The standard online business model for blogging is to run ads on the blog pages. Google AdSense, for instance, is a popular choice. There are, however, other ways to make money online through a blog. See 7 Ways to Make Money from a Blog.

Tricks to Success: having an engaging voice, being part of the blog community

So how else could you make money online? You could use one of these online business models:

5) Service Business Website

The typical service business website, properly done, combines a portfolio with persuasive copy. To make money online, a good service business website has to answer the question "Why should you hire this person to do that?"

Often, what's being sold is the talents and skills of an individual, but these are difficult to show online so the mainstays of service business websites are biographies and testimonials.

(Photo) samples of a person's work may be included if possible. If you're starting an online business of this type, I recommend soliciting testimonials from satisfied customers as a first step.

It's become almost standard for those seeking to sell their services online to offer prospective customers free content, such as a newsletter, email tips or ebook. These are, of course, great ways to get to collect customer data and stay in touch.

Some service business websites also sell products, typically the books and/or tapes of the individual involved, but sometimes other things.

Tricks to Success: powerful testimonials, personalization and professionalism

6) Info-Site

The info-site, as I've dubbed it, is a website that focuses on presenting information, often on a specific topic. The various sites on the About network, such as my About Small Business Canada website, are examples of this online business model.

So are portal sites such as Yahoo and Excite that serve as directories to the 'Net and online magazines.

Info-sites are predicated on the theory that enough people will be interested in the information to seek it out, visit the website and support it by clicking on or buying something.

While some info-sites make money online by selling their content, through subscription or syndication, others make money through advertising and/or affiliate programs.

Some info-sites also include an ecommerce component, directly selling products related to the information the site provides. A gardening info-site, for example, may also sell gardening tools.

If the info-site business model interests you as a way to make money online, don't be discouraged by the size of some of the sites that I've used as examples. An info-site doesn't have to be huge to be successful.

Tricks to Success: strong, engaging content

7) Brochure Site

The brochure site is basically an online business card. It presents the name of the business, some information about the products or services the business provides and contact information. People interested in learning more are asked to call, visit and/or sometimes to fill out an online form.

The brochure site is the online business model least likely to make money online in and of itself. Such a site is best suited as an adjunct to a business with a strong offline presence. Many small businesses use this kind of website as a Internet billboard for their customers, providing yet another way for their customers to get basic information about their business such as phone numbers or directions to their premises.

The website is actually part of the business's customer service rather than a money making venture in itself.

As an online business model, the brochure site does excel as an event registration site. Businesses and government agencies often create separate brochure sites for specific conferences or trade shows.

Tricks to Success: having other sites and/or channels set up to direct traffic to the brochure site

You Don't Need to Stick to Just One Online Business Model

While I've presented each of these online business models as distinct, they don't have to be. When you're putting your online business plan together, you need to be aware that you don't have to stick to just one online business model at a time - and you may make more money online if you don't.

For instance, incorporating a blog on your ecommerce or service business website can help you build traffic and increase your sales by giving your business a personalized voice.

Another approach when starting an online business is to have several different sites operating which may use different online business models. You could have, for example, an ecommerce site, a separate stand-alone blog site and a sales letter ecommerce site, all selling the same products and driving traffic to one another, which could really boost your online income.

The bottom line, though, is that any of the online business models I've outlined above can make money online if executed well. Here’s to the success of your new online business!

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