Having an online business sounds like a great idea. Yet for so many who go down this path, this business model doesn’t work.
Rather, it just doesn’t work for them.
So, what is the best online business model? In actual fact, there is no perfect or best online business model.
What works for one person could easily spiral into a disaster for another. The success or failure often depends on the time the entrepreneur has available, their budget, their past-experience, the product or service they are offering, the connections they’ve made and any one of a hundred other factors.
The best solution is planning and knowing your options. From there, you can start to work out which one is likely to be the best for YOU, given your unique circumstances.
Here’s a run-down on some of the best online business models, to give you a better understanding of what’s available.
This is a type of marketing where a business offers rewards to those recommending their products and/or services (affiliates). It may be that affiliates receive a payment for each paying visitor or customer that they send to the business, or some companies pay for each lead they’re sent. In the digital business world, this can be very easy. Simply copying and promoting a unique link for a product or service can bring a surprising number of visitors to a business’ website.
One of the best things about this business model is that you, as the affiliate, don’t need to create or manufacture the products, nor are you responsible for processing the product payments or distribution.
For businesses selling a physical product, drop-shipping is where the business selling the product doesn’t necessarily keep stocks of the product on hand.
In some cases, a business may sell a product they’ve never even seen. For example, Business A promotes a product that is manufactured by Business B. When a customer purchases a product from Business A, they send the shipping details to Business B who ships the product.
Another example would be where the business selling the product has the product made on an as-needed basis. Once the product is ordered, it’s created and then sent directly to the customer. There’s no need for it to go via the business selling it for them to ship to the customer.
One of the benefits to this model is that you don’t need to order minimum quantities of stock and arrange storage of it, nor look after the packaging and shipping. You may not even need to pay for the product until you’ve received the money from the customer. So it can be an extremely cost-effective business model.
On the downside, you can run into problems if a third-party product is out of stock and you don’t find out until AFTER you place the order for your customer. Your reputation also depends on the quality of the product and relying on the drop-shipper to send the product promptly and with proper packaging.
This can be a good business model for some … just do your research first and even buy the product for yourself, as a sample, before promoting it.
While ebay is not always seen as the best venue for a large scale company and is sometimes referred to as essentially “the world’s largest garage sale”, many small businesses do have a great business selling on ebay. This could include selling their products or selling unnecessary equipment.
I know several people who make very high, full-time incomes from their ebay businesses, with one couple making $50,000 per month. Of course, they didn’t start out making this income. They began by selling things they no longer needed from around their homes. Then they began buying wholesale products to sell.
While the ebay system does take some getting used to, it is intended to be very user friendly, hence its global popularity. Many small companies who can afford the time to give every customer attention will find it a great marketplace.
Done well, this can be a great home-based business for those who don’t mind packaging products and making sure they’re mailed daily.
However, ebay is only one site that allows nearly anyone to sell a number of different products under the auspices of a larger, more well known site. Etsy is a worldwide site that’s popular for selling things such as handicrafts. Meanwhile, a number of different businesses have signed on as Amazon affiliates, getting their products listed on Amazon in exchange for following certain protocols to maintain Amazon’s reputation.
If you are keen to sell your own products, you may be able to do so via one of these sites (e.g. Amazon.com). However you could also apply to become an Amazon Associate, whereby you can promote Amazon.com products and receive a commission for sales that come from your referrals. This comes under the “Affiliate Marketing” business model, above.
Selling purely digital products, from eBooks to smart phone apps, software to online training courses and the likes, is a means of making money that is growing in popularity. There are a number of storefronts focused on allowing users to sell such products, depending on what type of product you’re creating. (e.g. the Apple Apps store or Amazon’s eBook section).
While it can take some technical know how to get all these products together, they can be an amazing cost saver for companies who’s products are just as good in purely digital form as they are in physical form.
You can also create your own website and sell your products via your own site, rather than going through one of the bigger companies. If you want to sell digital products from your own website, the Kartra system will help make this easy for you. (Kartra will manage your website, emails, products, and so much more, all in the one place. In full disclosure, this link is an affiliate link so if you do end up subscribing to Kartra via my link, I may receive a commission from them as a thank you for referring you.)
Make sure you check out what each of these sites does and doesn’t allow, the commissions or fees payable and what their expectations of you are.
As with selling digital or information products, you can also sell physical products via your own website. For anyone who’s not so tech-savvy, you can pay someone to set up your web site and a good shopping cart system. Although with a little effort it’s not overly difficult to manage.
You could also use the services of a fulfillment house. For a fee, they store your products and ship them out on your behalf. This is particularly worthwhile as your business grows and you have more and more orders to process each day.
There are also many services that can be provided online, such as:
With the amazing technology available today, many services can be provided without needing to visit your customers or meeting them face-to-face.
If you don’t have any particular skills to provide services yourself, that’s okay too. You can employ or contract others who are skilled to provide the services. This allows you to focus on marketing and managing your business. This is the business model I began with, in July 1998.
Managing a successful membership site (or two) is another good online business model. You collate beneficial information on a particular topic and your members pay to access this content. Although this model can be more complex to set up initially, by charging a recurring fee you’re bringing in income over and over again. Meaning that you’re not having to continually market for new customers.
You will most likely still do some marketing to bring in new members, but by looking after your members they are more likely to stay on long-term. Also, the more you look after your members the more they will refer others to you.
Many businesses find that maintaining a blog is a great way to stay in touch with their customers. But many people aren’t aware that a blog itself can be the main part of a business – and its income.
While there are countless blogs around, only a minority of those blogs are profitable from a business perspective. Some people just love to write and share their ideas and thoughts or promote a cause and that’s perfectly fine.
Others integrate monetisation strategies into their blogging so it earns an income. That income could be a few dollars extra here and there to full-time, 6- and 7-figure incomes.
Monetising strategies can include advertising from your site, selling products or services, charging a fee for premium content, “Pay Per Click” advertising (PPC) or recommending affiliate products.
If you’re recommending affiliate products, only do so if you feel they’re worthwhile. Don’t get caught up recommending solely because you’ll earn a commission. In the long-term, your readers will value your honesty and ethics and this will grow into more income over time.
Determining what the best online business model is, of course, is a complex question. Consider your budget for time and money and your existing experiences, along with personal preferences, lifestyle and ability. Learning a little more about each of these business models is also a good idea. This will help you decide which online business model is more likely best for you.
One of the most challenging parts of running a digital business is all the techie stuff, right? Learning how to create web pages and opt-in forms and autoresponder emails and … (sigh) … shopping carts and payment processors and video hosting.
For those who want to set up a membership site or online course, there’s more software again. Plus, you need to cross your fingers and hope all the tools you’ve chosen will integrate and play together nicely.
Apart from the time spent learning all these tools, there’s the cost!
I know many successful online business owners who are fed up with all the monthly fees for these tools, but yet they know they need them. If they’re frustrated with this, make no wonder it’s hard for beginners and small business owners to make a profit.
Thankfully, change is on its way…
Over the last couple of months I’ve been fortunate enough to be given early access to some brand new software that is about to be launched.
This software is called Kartra (yes, that’s an affiliate link, in case you’re wondering) and I have to say, I’m loving it. This was created by Andy Jenkins – a very successful internet marketer – after dealing with these frustrations himself.
Here are my thoughts after testing this software…
This ONE system contains a number of advanced tools that all sync nicely with each other.
Tools such as:
The Kartra website builder is very easy to use, with many ‘drag and drop’ features. You can select from one of the templates and edit it to suit your needs, or you can start from scratch.
It’s easy to clone pages too, which means that if you want to create a page that’s similar to one of your existing pages you can simply clone it and edit as necessary.
The website builder also includes a large selection of stock images that you’re welcome to use. Although it’s good to be able to use your own photos – which you can still do – having access to stock photos within the website builder saves time. You don’t need to go looking for the right image, download it, then upload it here. (However you can still do that, if you want to.)
The Kartra website builder is ideal for businesses selling digital products. Unlike some of the other website builders around, their templates are extremely flexible. I know some others that are good … but they often limit how much you can edit the templates, which can make it frustrating.
If you sell physical products, you might like to try this out but I don’t think this website builder is going to have everything you need just yet.
For bloggers… continue using WordPress for your blog. (Or Blogger, but I prefer WordPress.)
Kartra’s website builder is not meant for blogging. However you can use both. Use the Kartra pages for your general web pages and keep your blog separate. You can easily create pages in Kartra and then integrate them into your WordPress site (and some other website platforms too).
You’re able to use Kartra’s address for your web pages – meaning that you don’t have to register a domain name or arrange a hosting account if you don’t want to. Or you can integrate your own domain name and/or sub-domains.
Kartra’s support documentation and videos show you how to do this.
This is one of my favourite parts of Kartra and the main reason I was keen to try it out.
I’ve been using World Internet Office – a form of 1Shopping Cart – for my shopping cart and email management for the last 11 years. It’s been great and is very good at what it does.
However the one thing it lacks is something that is growing ever more important in today’s online marketing, and that’s marketing automation. That is, the ability for you to send content to subscribers or customers based on their previous actions.
For example, I like to send new subscribers a ‘Welcome‘ email from me, introducing myself and what they can expect. However some people subscribe to several different lists for different purposes (or after purchasing different products). I don’t want them to receive a ‘Welcome‘ email every time they are added to a new list.
In Kartra I can set this up so that subscribers get ‘tagged’ with “Welcome” and are sent the ‘Welcome‘ email. If they then subscribe to another list or purchase a different product, they won’t receive that initial ‘Welcome‘ email again because the system can tell that they’ve already been sent it.
This is a simple explanation, but there’s SO much more you can do here. It makes it a better experience for your subscribers and customers and is better for business.
There are other programs that can do this – and do it very well. Although they can be very expensive or complicated.
In testing, I found Kartra much easier to use than Infusionsoft. But then again, I am already familiar with Infusionsoft so that may have helped me to pick up Kartra quicker as the concept is similar.
Also, for anyone who has a business selling physical products, you may find Infusionsoft better for your needs. It has a lot more features that are useful for these types of businesses. But for an online business, Infusionsoft can be too confusing (and expensive), with a lot of features you will probably never need.
For me, I’m almost finished transferring from my current system – which has served me very well – over to Kartra. The last of my customers are being transferred across this week.
The other thing you’ll find within Kartra is their ‘Done-for-you’ campaigns. These campaigns were set up by leading internet marketer, Frank Kern, based on some of his most successful campaigns ever.
All you need to do is edit them as needed to suit your products, payment links, emails and so on. This makes it super-easy to get started with your campaigns.
Frank Kern shows more about these ‘Done-For-You’ campaigns in this video:
When you send emails, you can integrate your Kartra account with one of a selection of email providers or you can send it direct from Kartra.
Plus, you can send from your own email address or from your Kartra email address that they set up for you.
I use my own email address. This was extremely easy to set up following their tutorials.
Kartra includes a shopping cart however it’s not a payment processor. So that means that you set up all your product payment links from within your Kartra account but you integrate it with a payment processor that actually processes your customers’ payments.
At this stage there’s four payment processing integration options you can choose from – PayPal, Stripe, AuthorizeNet or BrainTree.
You can set it up with multiple options too.
Personally, I use my own merchant account linked through eWay. However Kartra doesn’t integrate with eWay at this stage. So in the meantime, I’ve set up both PayPal and Stripe integrations instead.
The other point to note here is that Kartra’s shopping cart at this stage isn’t designed for physical products. You may be able to find a way to work around this but otherwise, if you sell physical products, you may want to use something different for your shopping cart for now. (Although I expect this will be improved over the coming months).
The Kartra membership site builder is another feature I particularly like. You can create a membership site where users have their individual log-in details and can access online training or courses.
It allows you to drip-feed content, which is often useful in online courses. Plus one of the best parts is that you can upload your content – videos, audios, images, text/PDF documents – direct to your Kartra account. No more having to create an account with a video hosting service to upload your videos, then create the code to copy/paste into your membership site. Nope. This is all handled directly within your Kartra account.
When I first tried the membership site builder, I must admit… I was disappointed. There’s not a lot of flexibility (although again, I expect they’ll be adding more features and options to this in time.)
However I now realise that this is in fact a good thing. No more time-consuming distractions deciding on the fonts and colours and layout. Just select a few settings, add your content and you’re good to go.
It’s very clean and simple, which makes it easy for members to navigate too.
Here’s an example of the layout:
Previously I have used WishList Member on WordPress sites for my membership sites, and those I managed for clients too. I still love WishList Member and it still has its place.
For sites that are quite complex, including tailoring content and processes to individual members, I’ve left them on my WordPress/WishList Member sites. I recommend the same for others.
But I’ve moved my simpler, more straight-forward membership and online course sites over to my Kartra account.
However Kartra does also integrate with WishList Member, along with Digital Access Pass, aMember, OptimizePress and S2Member. So if you have a membership site based on one of these platforms and you’d like to continue using that, you can still integrate it with Kartra for things like your email management and shopping cart.
The Kartra Help Desk is a pretty cool feature. It allows you to set up your own Help Desk – including a Live Chat option, if you want it.
For someone who wants to get away from using their email address for customer support or who is ready to outsource this task, Kartra’s Help Desk may be ideal. Although it’s a little too basic for me at this stage.
It’s easy to check things such as a customer’s order number or products purchased as their support ticket links to their customer account, within your Kartra dashboard.
Also, I really like that you can add other uses, so you can easily outsource your customer support but still have a central place for all relevant team members – including yourself – to be able to access the necessary information.
There’s a number of feature requests in the queue to make this system better. While I haven’t changed to Kartra’s Help Desk yet, I’m looking forward to doing so in the near future. (Which will also mean I can cancel my current help desk software subscription).
One last feature of mention is the Kartra University. This is a training area that all Kartra customers get access to and it walks you through how to use the various tools.
There are a lot of features within Kartra however they’ve kept it as simple as possible. (Oh, I love simplicity!)
The dashboard is easy to navigate and once you get a basic understanding of how it works, you’ll soon be able to get more advanced with it … if you want to.
If you sell digital products, I highly recommend that you at least check out this software. Personally, it’s already saving me time and money. Not to mention being so much easier than paying for and logging into just one account instead of several.
I see this as a tool that can help get an online business up and running quickly, professionally and affordably.
You can find out more about Kartra by clicking here.
If you’re interested, you can get a 14-day trial for $1. Then – as long as it’s still available – you’ll be sent a code so you can get a 25% discount on the cost if you decide you like it.
This is the best way for you to try it out for yourself to see if it’s something that fits your particular needs. If you decide it’s not for you, just be sure to cancel your account before the trial ends.
Click the image below to watch the official video that explains the software in more detail:
Disclaimer: If you end up being a Kartra customer via the links in this post, I will earn a referral fee. This helps me to be able to create more free content to share with you. But that’s not why I’m recommending Kartra. I’m using it – and loving it – myself and believe this is worthwhile for other online businesses.
Thousands of business books are sold every year. Books that explain how to start a business, achieve goals, promote your business, budget your finances, how to be the best at what you do, and so much more. How do you decide which books to read?
Based upon a Gallup study of 2 million people this book will help you cultivate your personal and career strengths, capitalize on your talents, and know how to build an organization around your talents and those of your employees.
Many business startups fail. Eric Ries provides a set of tools and methodologies that any entrepreneur can use to achieve a successful business. The Lean Startup helps entrepreneurs build a workplace where employees learn, explore, and experiment.
A well-designed checklist is an extremely powerful tool. This book shows how a checklist can transform tragedy into safety, and can take your business from failure to success.
Jim Collins and Jerry Porras completed a six-year project where they researched exceptional companies to determine what makes them exceptional compared to other companies. They then wrote Built to Last, a master blueprint for turning your business into an exceptional business.
Using personal insight, science, and technology, charisma has been taken apart and turned into a science. In The Charisma Myth, you will discover how you can apply strategies and techniques to increase your charisma. You will be able to put the strategies easily to use, right away.
Brooks explored how moral logic and economic logic conflicted within great thinkers and leaders. In The Road To Character, Brooks explains how they used those internal struggles and limitations to build better character. It combines psychology, politics, spirituality, and confessional into structured path for building better character from within.
This book uses a series of case studies to show how long-held assumptions about how behaviour of cost, in relation to customers, is not true. The book explains how you can refocus your attention to responsiveness to increase costs, customer value, and demand.
One of my favourite business books of all time, this book reviews myths about starting your business, showing how they are not as true as you may think. It explains how common expectation, assumptions, and expertise can get in the way of building a successful business.
Okay, this is two books, but I recommend reading them both. I first read Cashflow Quadrant in my late 20s and had some major “a-ha” moments. But I’m not sure if it would have made as much sense if I hadn’t read Rich Dad Poor Dad previously.
Rich Dad Poor Dad shares how Kiyosaki has used what he learned from his two fathers about investing, employment, and about how to view money to create a successful career. His real dad was highly educated, but financially poor. His second dad (his best friend’s dad) was a self-made millionaire who dropped out of eighth grade.
Cashflow Quadrant expands the information from Rich Dad Poor Dad, giving you a guide to financial freedom. This book is written for those who have made the decision that they are ready to make the changes needed to have financial freedom.
Another all-time classic, this book was written to help you succeed in all areas of life so that you can do anything you desire.
Although its title indicates it’s about how to get rich, the philosophy is about successfully achieving your personal goals. It will help you build a lucrative business and experience success on all levels.
The Alchemist is an inspiring story about a shepherd who goes on search for treasured riches. Along the way he meets a gypsy woman, king, and an alchemist who help him complete his quest though they don’t know the true destination of the treasure. The shepherd uncovers so much more… he discovers the power of dreams and why it’s important to listen to our hearts.
This book was recommended to me by a friend when I was going through a very difficult time over a decade ago. It helped me to see the situation I was in at that time in a completely different light, and its lessons have helped me over and over throughout the years since.
Many of these books are so good I’ve included them on the Resources page on this site, along with links for more information or to buy these books.
I hope you enjoy them and find them as helpful as I did.