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7 Online Business Models

Part 1: How to Make Money Online

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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 Sell Online Stores, 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 eBay.ca 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.

If you're new to blogging but want to use the model to start an online business, my Blog FAQs for Businesses explains how to get started.

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

Continue on to the next page to learn about three more online business models that you can use to make money online.

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