During the Internet boom in the late 1990s, the term “business model” became popular, in part because many internet firms seemed to plan for attracting traffic without a clear understanding of how or when that traffic would generate income and profits.
In our perspective, the term itself is a little too trendy. The phrase “business model” should be replaced by terms like “sales,” “costs,” “expenses,” and “profits.” Focus on how your website will benefit your firm as you design your plan. What is your business’s return on investment? Sales and profits are the most obvious payoffs, but there could be others. Some websites exist just to aid sales by making a buyer’s selection easier, while others reduce costs, increase customer satisfaction, or serve as a replacement for a telephone conversation or sales literature.
While the classics listed below are fairly clear, there is an endless number of viable internet business concepts. You might have a commerce website, a content website, a community website, a portfolio website, or something completely else. The essential point is that your firm should be profitable. You don’t create a website simply because someone tells you to. It was created with a corporate or organizational goal in mind.
- The portfolio site is similar to a digital business card.
These websites provide useful information. Their target audience comes to them to learn more about a company. The websites don’t sell anything directly, but they do help sales by generating leads or making the buying choice easier for visitors.
Millions of websites that don’t sell anything but display the online version of sales literature are referred to as portfolio sites. Just a few examples include restaurant websites that provide menus, law and accountancy firms that post-professional profiles and relevant information, and so on. Because they are generally inexpensive to develop and deliver enormous benefits, these types of sites were the first to appear on the Internet.
- The fundamental business model: sales and profits.
Making sales and earnings is the most basic online business concept. A traditional commerce website, such as Amazon.com or Buy.com, offer things, accept orders, charges credit cards, and ships them. The ability to supply what they sell online, at the time of the transaction, is a benefit of software and some information sites.
The benefit of simplicity of use and selection is usually provided by these sites to their target customers. Amazon.com, for example, sets the bar for e-commerce sites by providing a vast range as well as a lot of additional information on the things it sells.
- The advertising-based content model
The content sites operate similarly to major network television in the United States, providing free content to consumers in exchange for the acceptance of commercials. This is similar to the traditional newspaper and magazine business, with content paid for primarily by ads, with the exception that most magazines and newspapers sell for a low price and rely on advertisers for the majority of their revenue. The “business model” itself isn’t very novel; it’s simply that it’s now available over the Internet.
Take Yahoo! for example. In the Internet community site, this value is equivalent. A typical community site includes email, bulletin boards, and forums, all of which serve as a focal point for a group of people who share a common interest. Groups, clubs, and government entities frequently launch community websites. However, some of the best of them are sponsored by firms looking to capitalize on the public’s enthusiasm.
- Sites for the general public
Consider the commercial significance of a local supermarket’s bulletin board. The market does not charge for placing notices on the bulletin board, and no one pays to read them, but the company takes the time to administer it. We assume that the underlying business benefit is that the sense of community increases traffic and loyalty.
In the Internet community site, this value is equivalent. A typical community site includes email, bulletin boards, and forums, all of which serve as a focal point for a group of people who share a common interest. Groups, clubs, and government entities frequently launch community websites. However, some of the best of them are sponsored by firms looking to capitalize on the public’s enthusiasm. A local store, for example, might support a rock climbing community site.
- The majority of websites are hybrids or mixes of different types of websites.
In reality, most websites provide a mix of targeted user benefits. For example, bplans.com combines information and community with a dash of portfolio and commerce. Amazon.com mixes commerce, content, and community, while Yahoo.com integrates content, community, and commerce as well.
- Summary of the business model
How will you make money from your website’s visitors? Is there a strategy in place? What strategy will you employ to evaluate it? If you’re creating a hybrid site, make sure you clarify how the hybrid will generate revenue. Is there going to be a business section? Will you rely on sponsorships and advertising to fund your project? Will your users be able to purchase services from you? Make sure you consider how you’ll make your website enterprise profitable in the long run.
Consider the financial benefits of your website. This is an excellent moment to update your sales forecast. Instead of sales, the sales initiative could result in increased closing percentages, increased customer happiness, or increased shop traffic. Consider how those advantages might fit into a sales projection, as this will allow you to compare monetary advantages to expenses.