Direct Manufacturer Business Model

  • Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction. Virtual Merchant –or e-tailer, is a retail merchant that operates solely over the web. [Amazon.com]
  • Catalog Merchant — mail-order business with a web-based catalog. Combines mail, telephone and online ordering. [Lands’ End]

  • Click and Mortar — traditional brick-and-mortar retail establishment with web storefront. [Barnes & Noble, Walmart.com]

  • Bit Vendor — a merchant that deals strictly in digital products and services and, in its purest form, conducts both sales and distribution over the web. [Apple iTunes Music Store]

Affiliate Business Model

  • In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model — if an affiliate does not generate sales, it represents no cost to the merchant. The affiliate model is inherently well-suited to the web, which explains its popularity. Variations include, banner exchange, pay-per-click, and revenue sharing programs. [Barnes & Noble, Amazon.com] Banner Exchange — trades banner placement among a network of affiliated sites.
  • Pay-per-click — site that pays affiliates for a user click-through.
  • Revenue Sharing — offers a percent-of-sale commission based on a user click-through in which the user subsequently purchases a product.
  • Affiliate Networks – market place for publishers and vendors to establish affiliate relationships. These relation ships could range from Cost per Action (CPA), Cost per Click(CPC) or views ( CPMs).[Commssion junction, LinkShare, Shareasale]

Community Business Model

  • The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking. Open Source — software developed collaboratively by a global community of programmers who share code openly. Instead of licensing code for a fee, open source relies on revenue generated from related services like systems integration, product support, tutorials and user documentation. [Red Hat]
  • Open Content — openly accessible content developed collaboratively by a global community of contributors who work voluntarily. [Wikipedia]
  • Public Broadcasting — user-supported model used by not-for-profit radio and television broadcasting extended to the web. A community of users support the site through voluntary donations. [The Classical Station (WCPE.org)]
  • Social Networking Services — sites that provide individuals with the ability to connect to other individuals along a defined common interest (professional, hobby, romance). Social networking services can provide opportunities for contextual advertising and subscriptions for premium services. [Flickr, Friendster, Orkut]. There are turnkey web software that create social networking sites similar to these

Subscription Business Model

  • Users are charged a periodic — daily, monthly or annual — fee to subscribe to a service. It is not uncommon for sites to combine free content with “premium” (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined. Content Services — provide text, audio, or video content to users who subscribe for a fee to gain access to the service. [gameFly.com, Netflix]
  • Person-to-Person Networking Services — are conduits for the distribution of user-submitted information, such as individuals searching for former schoolmates. [Classmates]
  • Trust Services — come in the form of membership associations that abide by an explicit code of conduct, and in which members pay a subscription fee. [Truste]
  • Internet Services Providers — offer network connectivity and related services on a monthly subscription. [America Online, BlueHost]
  • Application Service Providers – Offers web services to its customers on a monthly subscriptions. This could be web services like Volusion.com , or online data backup service like Mozy, carbonite and Backup To Net.com. New incarnation of ASPs is Software as a Service (SaaS) similar to SalesForce.com