Why start an online business? What are the best online business models? How do you market an online business? How do you start an online business? What is an online business? Why start an online business? What are the best online business models? How do you market an online business? How do you start an online business? Pick the approach you’re most comfortable with at the moment; then as you grow, you can expand your marketing strategy.
Is it too late?
Has the online business unicorn’s ship sailed and left you on the dock, stuck in the 9-to-5 grind and licking your wounds from the missed opportunity?
The proliferation of the internet has simplified the process of building a business so much so that many people believe their chances of success are diminishing.
The online space is saturated, isn’t it?
Yes, it’s true that as little as 15 years ago there was less competition and for those that were tech-savvy enough to start their own website, business growth could be rapid.
And a LOT of people have jumped on the bandwagon…. So in many niches, competition is fierce.
But the online business dream is far from over…
If there is one thing I’ve learned from my 15+ years of running an online business it’s that persistence trumps a new business idea every single time.
If you keep turning up, day after day, week after week, and month after month, then you put yourself in a position to succeed in any business landscape.
The problem that most aspiring online entrepreneurs face is that they dive head first into building a business model that was effective a decade ago, rather than what is working right now.
The goal posts are always moving in digital marketing and to be sustainably successful you need to adapt and change with the trends.
That’s why I’ve written this guide on how to start an online business in 2019. Because, for the most part, the information available out there is somewhat dated.
Starting an online business today is much different to it has ever been. In this article, we will discuss everything from growth tactics to software tools, business models, and beyond.
But before we get into it, let’s cover some of the basics and common questions about starting an online business…
Table of contents
What are the best online business models?
How do online businesses make money?
How do you market an online business?
How do you start an online business?
What is an online business?
An online business refers to any type of business activity that happens in the digital space.
Everything from selling handmade jewelry on Etsy to developing a mobile app can qualify as an online business.
Why start an online business?
There are any number of reasons why you would start an online business, rather than a more traditional offline brick-and-mortar store or office-based business. Here are a few to consider:
- The setup costs and required capital to get started are significantly less – in some cases they are zero!
- You have the flexibility to work from anywhere in the world or the comfort of your home.
- An online business could serve as an extra income – a side hustle – or for those that need the flexibility to work only a few days a week.
- Your business growth is not bound by borders – you can engage and sell to a global audience.
Are online businesses scams?
Unfortunately, many online business get a bad reputation for being “scams”.
Are some of them scams?
Absolutely!
But we’ve come a long way from the first days of eCommerce.
Consumers are getting savvier than ever before, and business owners are getting more diligent about the way they market their products, making it increasingly difficult for scammers to take people’s money.
Sure, there is still the odd dodgy internet marketer out there, but for the most part, online businesses are now mainstream and well regulated.
Are online businesses profitable?
As with any business, profitability and success cannot be a blanket catch-all statement. Are all online businesses profitable? No, of course not. Just like many offline businesses are unprofitable.
However, the low overheads and global reach of online businesses make them a very intriguing proposition for entrepreneurs. With the right mix of product-market-fit and some disciplined execution, online businesses can be extremely profitable ventures.
When you consider that Global eCommerce is steadily on the rise, with 2.8 trillion dollars spent in sales worldwide in 2018, and the fact that most Americans prefer to shop online – the opportunity for running a profitable online business has never been more present.
What are the best online business models?
So, you’ve decided to take your chances and launch your online business. One of the first steps you should take is to assess other online business models and determine which one is going to be right for you.
To determine your business model, the two key components you should look at are revenue generation and marketing:
How do online businesses make money?
The “Revenue Generation” model you choose determines how you are going to make money online. What will you offer to customers in exchange for their hard-earned cash?
Here are some examples to choose from:
Dropshipping
Dropshipping is a supply chain management method used in the eCommerce space. Basically, all of your stock is housed with the original manufacturer and they ship it to your customer after an order is placed. You, as the retailer, don’t need to pay for storage and stock management because it is all handled by your dropshipping partner.
Dropshipping is a popular choice for new eCommerce businesses because it is the path with least resistance and requires little overhead capital. However, you lose control of quality maintenance and shipping times with this revenue model. It’s a trade off.
Oberlo is an example of a dropshipping software that enables you to “find products, add them to your Shopify store, and ship them directly to your customers”.
Amazon
Amazon has created a giant network you can use to store and sell your products.
It’s simple to set up your business as an Amazon seller and start getting a new audience viewing your products. The Amazon fulfillment center can even pack and ship the products for you.
Affiliate marketing is a form of revenue sharing. The way it works is that some businesses, Amazon is a well-known example, have “Affiliate” or “Partner” programs which you can sign up for.
As you grow an audience online in your chosen industry – via social media, blogging, or some other means of community building – you begin promoting their products using a referral URL. For every sale you refer, you get a commission.
So, you can develop an entire online business on the back of promoting other people’s products and receiving a commission for it!
On-site Advertising
Much like affiliate marketing, this revenue model sees you earn money when people you have attracted to your website click on a link or banner ad. There are a growing number of ad networks that collaborate with online publishers on a pay-per-click basis. Google Adsense is the biggest of these:
As a freelancer or contractor as it may be called, you are your own boss. You work with a range of clients on projects – oftentimes in an ongoing capacity – and you are paid based on an agreed rate. The freelance market is expanding every year, but it is most common to see full-time freelancers in sectors such as design, web development, copywriting, and other digitally-focused roles.
You can kickstart a freelance career by using online marketplaces such as UpWork:
Beyond all the online-specific business models that I’ve mentioned above, you can start an online business by simply selling products or services online. Crazy, right?!?!
This revenue model is by far the most common as it has its roots in everyday business – people understand how it works, and often have an offline arm to their business too. They are simply using online channels to expand their reach.
For example, a restaurant may start taking takeaway orders online via their website like Crust Pizza below:
The membership model…
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