Online Business Models: Part 2
27 Aug
It should be no surprise that the next model we will discuss is selling the products and services of other companies/brands; this is often referred to as affiliate marketing. So what are the main benefits of affiliate marketing? Well for starters you don’t have to spend time and money developing a service or product. You aren’t responsible for creating a website for the product or handling the process of orders and returns/refunds. You won’t have to waste time testing all the little details of ad copy and traffic conversions. Additionally you won’t have to convince people to sell your product/service. Sounds great right, why would you do anything else? Well not so fast now, let’s discuss some of the disadvantages of affiliate marketing.
As an affiliate you won’t make any money until you actually make sales. In order to make sales your main objective will be to drive traffic (preferably targeted traffic) to the product/service sales page. Depending on how you approach the task of gathering traffic online you will spend either time or money. Remember what I said about not needing to have a website…well that was kind of a half truth. While you could send people directly to the product/service sales page typically affiliates will create websites of their own. The reason for this would be that affiliates want to prequalify their traffic and capture the email of their visitors (this is by far a more profitable approach). One way that affiliates typically qualify their visitors is by answering many of the questions a potential buyer might have. This is achieved by writing a product review that highlights many of the products benefits and deficiencies. Affiliates will also try to entice their visitors into buying by providing additional value to the product they are selling, this is done by giving something to the visitor when they buy through your website.
Keep in mind that we only discussed two possible business models for your future online business. It should go without saying that these models may not be appropriate for everyone. What works for me might not work for you and so on. I will however say that these two models at their basic level are representative of a large amount of the businesses you will find online. So the real question on everyone’s mind should be “what model am I going to base my business on?” Start thinking about how you are going to build your business online and create a rough outline of goals, this will be your first step towards success.
