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8 Proven Online Business Models To Explore For Your Side Hustle.
You've decided to start a business or side hustle and you have an idea to explore.
Or you might be exploring types of small businesses to start or legitimate work from home businesses.
How do you ensure your business idea is a viable one?
You test it ofcourse by experimenting! However, one necessary ingredient is a viable business model.
A business model is a way in which your business makes money to sustain itself and to ensure it can receive future investment.
The good news is that many have been on the journey before you and experimented with existing business models.
So there is no need reinventing the wheel especially if you're fairly new to business.
The internet in the last decade has provided a clear path for many to establish a variety of businesses online at low costs.
If you're stuck at a job you hate, there is now an alternative opportunity to explore online and at your convenience.
Technology is also now cheaper to acquire.
With a handful of powerful tools, an idea and the right business model, you have the potential to create something worthwhile.
There is obviously more that goes into successfully running a business online such as marketing and sales efforts.
Plus the availability of cash flow.
However, choosing a viable business model is a good place to start.
Once chosen, it's important to stick to one model and prove you can consistently make money with it.
Then it's important to diversify your monetisation method by bringing in another model.
This diversification is important for removing the concentration risk you might have by earning your revenue from one source.
As we are talking online businesses here, the same goes for traffic.
You might be dominant via a particular social channel initially.
However, in time, you'd want to diversify as well as extend beyond social traffic into organic and referral sources.
All of the above activities make your business more valuable to a buyer if you ever want to sell.
[redbar]The type of revenue you generate also matters alot. The stickier the revenue source the better.[/redbar]
For example, a business with an element of subscription revenues will be worth more than one that doesn't have such regular income.
So whether you run an online or offline business, it's important to consider building in a subscription element into your sales mix.
Below are 8 proven and actionable online business models you can explore:
1. Membership Website (Subscription model)
This is a type of subscription business model where you can leverage your passion or expertise in anything.
No matter how weird it might be, there are likely to be people out there ready to gain access to your knowledge.
In fact, the more niche your knowledge and expertise are, the better.
This model allows you to generate revenue by putting what you know behind a paywall.
Subscribers will have to pay ongoing fees to access your knowledge and expertise.
Today’s technology now makes it possible for you to leverage an existing infrastructure and all you have to do is:
i) Create high-quality content in multiple formats e.g. A Blog, podcast, video interviews, case studies etc.
This appeals to the variety of preferences of your audience and does very well on Google re SEO.
ii) Market your high-quality content – e.g. externally and internally via your subscribers or audience.
A secret sauce to note is that the most successful membership sites are B2B i.e. The ones helping business owners thrive in an industry or business skill.
One of my favourites is The Female Entrepreneur Association, where Carrie Green teaches would-be entrepreneurs to be more successful.
You can create a membership site in any area. E.g. Compliance, Dance, Childcare etc.
The membership site is often a way of building a community, which you can take up a value ladder in time.
I.e. As you add value via the membership site, you’d find other ways of solving problems in time.
This introduces another product or service line for your already established audience.
You see this done via offerings of conferences, courses, coaching etc.
Note that you can also run a membership offering for a physical products business for a low ticket. You often see this done via newsletters.
Highly Recommended Book: The Automatic Customer – Creating A Subscription Business In Any Industry
2. Amazon Affiliate
Amazon Associates is the affiliate program run by Amazon, and it has been around for a very long time.
Over the years, Amazon has become a highly trusted brand and valuable company.
So much so that it is in effect a search engine and most people do the majority of their shopping on it.
As such, selling any product on Amazon is highly converting and they make it easy for you to promote their products.
One way you can do this is to create a niche website, with the sole purpose of curating and reviewing Amazon products.
Given Amazon pays different commission rates for various categories (up to 10%), it helps to promote products with a higher commission.
What’s unique about starting off on Amazon is that it’s a great place to begin if you’re new. In time, you’ll work out what the most effective marketing tactics are for your products.
Related post: How To Make Money From The Amazon Associates Program
3. Fulfilled By Amazon (FBA)
FBA gives you the opportunity to run an eCommerce store straight away but without your own self-hosted platform.
Instead, your store forms a part of the main Amazon website and is found in the search as an Amazon listing.
The great benefit of this is that you spend no money on marketing at all as you essentially ride the traffic wave that Amazon generates.
In addition, you have the potential exposure of having your products promoted by Amazon affiliates and by Amazon if it is highly reviewed and converting.
One of the best ways of making a killing via Amazon is to build a physical product brand on the platform.
Once you can prove that such a product sells well, you can leverage that for scale and sell it via other channels too to diversify and improve your sales mix.
Such brands are often on the radar of people looking to buy lifestyle or high growth brands to add to their portfolio.
So there is a huge potential for you to actually create such a business from scratch, using Amazon to grow a brand, with the sole intention of an exit down the line.
4. Affiliate Marketing
With Affiliate Marketing, your ultimate goal is to market and sell other people’s products.
If you currently use a product or service in high demand, then the chances are there is an affiliate program you can join.
This has grown into a massive industry and provides a real opportunity for anyone to make money online with hard work.
In order to make money as an affiliate, you’d have to create the environment to promote your product.
One to do it is via starting a blog and exposing your products and services to traffic you drive.
Other ways include creating specific niche sites for a product or service you’re promoting.
Affiliate marketing has become so powerful that there are specific networks such as AWIN, ShareASale, CJ Affiliate, that manage such relationships as middlemen.
Related post: Best Resources For Side Hustle success
5. Drop Shipping
This gives you the opportunity to get your feet wet in the e-commerce world but without too much skin in the game.
Drop shipping allows you to act as a perfect middleman, bringing in the buyers and having someone else deal with packaging, shipping etc.
For this, people typically find suppliers in cheaper labour parts of the world (e.g. China), who can manufacture and deliver.
Drop shipping results in you getting a cut of the action for originating the business.
These are process dependent to be a success and pricing is very important given the thin margins.
Start with winning product → Marketing → Create Ad Copy and Video Adverts → Suppliers
If you get it right, the entire thing could be automated, and your primary job will be to own and control traffic.
6. Freemium Model
This is a combination of ‘Free’ and ‘Premium’ offerings to consumers.
Typically you'd start by offering something for free, while then putting up a paywall for premium content.
You see this with certain online newspapers, which allow you to read an article or two per day, and beyond that, you have to pay.
Bloggers in a niche can also do this by allowing say 25% of their content for free.
However, they can ask for either a one-off contribution or a subscription for high-quality content.
I've seen this done well for a niche investing blog.
A popular site that does this well is LinkedIn. Your professional profile is free to set up and benefits you.
However, to find key contacts via searches or to message people directly, you'd need a pro version.
The great advantage of the freemium model is that it can act as a marketing tool as the ‘free’ element is often a lead magnet.
By over-delivering to the consumers of the free content/offering, a certain percentage will convert into premium customers in time.
7. Information Products
You can either sell products and services as above, or you specialise in teaching people how to sell products and services.
Information products have an important role to play.
You’d most likely need to attend a niche course on subjects such as affiliate marketing or Facebook ads in order to get straight to making money.
People who deliver information products have usually been through the process themselves, made mistakes and sharing their top tips.
The great thing about such products is that they are massive passive income generators.
There is the initial hard work to create the product, which is where most people give up.
However, once you’ve got past this hurdle, it could potentially be forever money provided you continue to update your product and create compelling offers.
Post-production costs are also minimal and fixed (usually only marketing cost and course hosting costs).
If you’re interested in exploring this, then I highly recommend Teachable.
With E-commerce, you essentially create your own store online, source and fulfill products. You host this on your own site or via a third party platform like Shopify rather than on a platform like Amazon.com.
As you are in effect self-hosting, you have to engage more in marketing heavily to drive traffic to products on your site.
A key source of traffic is usually paid ads via the likes of Facebook. Learning how to do this effectively is another reason why info products (above) exist.
Running such an E-commerce site can act as a good experiment to see what products sell and which don’t.
It can help you figure out what products you should focus your resources on sourcing cheaply.
As touched on before, creating a physical product brand around your best sellers can be an excellent way to create a profitable and sellable business.
E-commerce businesses can also be taken up a notch with subscription-based Ecommerce.
For example, you can offer a subscription model for a consumable that people need to replenish on an ongoing basis.
You're essentially offering a ‘convenience’ value proposition such that people never have to run out of a particular thing e.g. razor blades as with Dollar Shave Club.
As the likes of Amazon are likely to be cheaper and faster on like like products, you'd have to do something different to thrive.
Branding, the creation of a tribe of believers and a protection of your supplier chain are keys to thriving.
Hope you've found that useful. This is by no means an exhaustive list.
However, this introduces you to actionable options you can explore today for six to seven figure incomes with hard work!
None of this will ofcourse happen on day 1 or even in your first year.
My best recommendation is to do some homework and dive in. Get help where needed and invest to learn exactly what you need.
You're one side hustle away from creating your ideal lifestyle business.
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What business model have you explored in your business? Or which are you considering?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.