Different Types Of Online Business Models

Online Business or e-commerce is any type of commercial activity or business that involves sharing information online. It may also be undertaken by any form of communication such as e-mail, fax or telephone. Online commerce comprises the exchange of services and goods between individuals, companies, groups and other organizations and is thus viewed as one of the more important activities of any modern economy. There has however been an emerging trend towards online business in which the initial cost of setting up the business is reduced, the overheads are cut and the chances of growth are high. These businesses can be categorized into many different sectors based on their location, sector focus and competition.

The traditional methods of doing business such as advertising, telemarketing, distribution of literature, distributing flyers etc. are still used but are done mostly by professionals who do it for a living and so are not as easy to scale up and become a hit with consumers. Another method of an online business being adopted is to make money through website portals by getting advertisers to place their advertisements on your site, hence you get paid each time someone clicks on these ads. However there are limitations to this type of online business as compared to an offline version, the main limitation being that you cannot get any real sales as you will not be able to display the products to the intended audience.

Online business models like affiliate marketing have emerged as the most promising platforms for aspiring entrepreneurs to make money on the internet because they require little or no upfront investment apart from the commission that they get for every successful sale they make. Affiliate marketing is where a business owner acts as a middleman by attracting customers to a product or service by sending traffic to the merchant websites through the affiliate’s website. In return the merchant pays the affiliate a commission for every successful purchase that is made. There are other online businesses like the multi level marketing and the joint ventures that require small and medium investments but are lucrative and bring in great returns over a period of time.