Online Business Models – Introduction Part 1

So you have decided you want to use the internet to make more money. You either already have a business which you want to expand using the internet, or you want to start an online business as a completely separate venture.

There are several ways you can do this. Just remember, all of them will require a lot of hard work, energy and dedication to really be successful. The great news for you is that as you start to reap rewards, you can start to systemise it and outsource parts of it to scale it up very quickly. And that’s when you can start to see extra income in your pocket for little extra time investment.

I’ll go through each of these in more detail in the coming days and weeks, but I want to give you a good overview of the various options available to you.

Online Magazine Or Blog

An online magazine gives you plenty of opportunities to make money. You focus on one particular topic or niche to start with, write great content and build up traffic. These are the 2 biggest challenges for every website, but if the content is there and the promotion is there, the traffic will flow.

You can then monetise your site in a few ways:

  • You can offer paid ads or listings – so advertisers paying you a fixed fee per month to advertise in a certain spot
  • PPC ads – putting something like Google adwords on your site. Every time someone clicks on an ad, you get a certain amount for that click.
  • Affiliate sales – promoting other peoples goods or services and taking a commission on each sale through your link.

The main challenge is writing regular, good content which will attract readers and show you as the authority you want to be.

Examples of successful online magazines and blogs are:

Information Products

Information products are a great source of extra income, and you can tie them into your existing business, or if you are passionate about something, create a whole new business off of this.

An information product, or “info product” for short, is basically an online training course someone can buy from you. There is no shipping or posting, everything is available to view or download online for your customers and payment is instant.

So let’s say you are an ace photographer (like I one day hope to be). You might set up a product explaining how to take great professional looking photos with an entry-level SLR camera. This might cost $49 (Yes I am in the UK, but the US$ is the currency of the internet). So you make $49 for each sale (minus whatever costs you have).

You put in all the time and effort to set up the site once. Now your sole focus is on promoting it. It is an economies of scale business really. Regardless of sales numbers, your time and effort required doesn’t increase. You just cash in on sales.

So 1,000 people buy your product, that is $49,000 in your pocket (minus admin costs of course!)

Some great examples of info products:

Membership Site

Kind of similar to an info product. The difference here, and it is very very cool is that people subscribe and therefore pay each and every month. So from each sale, you don’t only get income 1 month, but you get income month after month.

The main challenge with membership sites is making it compelling enough and providing enough value and “stickyness” that will make your customers want to stick around for a long time. If you can crack that, then you will do very well for yourself.

To put that in numbers, let’s say you decide to do a different photography course. Something which takes members all the way from beginners with a compact camera on a journey all the way to becoming more or less professional photographers.

You charge $20/mth for it. As well as all the tips and information and advice you provide, there is a forum for all your members to interact, for your own team to help out – adding extra value beyond what your customers get from your tutorials.

Lets say you keep your members for 12 months on average, and you get just 10 people a month to sign up. Yes that is on the low side of what you can do, but lets roll with it anyway. So in month 1, you will earn $200. In month 2, you still have the 10 customers from month 1, plus 10 new customers, so that is $400 that month and $600 in total.

In month 3, you have 20+10 = 30 customers, earning you $600, as well as the $600 you earned in months 1 and 2, so $1200 total. Roll that out over a year and that is $15,600 in a year! And your work commitment was basically setting up the site, a few updates, dealing with individual enquiries and promotion. You won’t have done much else beyond that. When your site is up and running, its up and running. Nothing else to do with it.

A couple of great membership site examples are:


I wouldn’t touch this one until you have a firm foundation and reputation in one of the above methods. Coaching is where you charge someone as much as you want, or as much as you think you’re worth, for an hour of your time, to give them 1 to 1 tuition. Its like personal training in your chosen niche.

The reason I would say not to touch it is that you need some kind of reputation before you can really start charging high prices for your time. So if you sell a popular, high quality info product or membership program and you are providing great value and people are getting great results (in other words, if people love what you do!) then it is very easy to offer them (or upsell) that extra helping hand for a certain price.

Not all of your customers on your lower selling price products will want to buy more, but it doesn’t matter. The few that do will probably provide you with more income than several dozen individual low budget customers combined. So it is win-win.

So your same photography site, which has 120 customers by the end of 12 months. 5% of them want 1 to 1 coaching, maybe once a week each. So that is 6 customers who all want 4 hours each, so 24 hours a month. And you charge $100 per hour. Maybe give a discount to 2 of them who purchase a total of 8 hours in bulk, so $350 each.

So that is $700 from your 2 bulk purchasers, plus $1600 from your other 4 customers. That is $2300 PER MONTH. Or $27,600 per year! That is almost double what we guesstimated your membership site on its own could produce.

To Be Continued…

I didn’t realise how long this post was going to be, so I am splitting up the introduction to online business models into 2 parts. In part 2, there are still 5 MORE online business models to go through. So really there is something for everyone. It just comes down to you taking action on it.

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