The reason you’re in business is to make money. Internet marketing expert Corey Rudl [2005] says there are seven basic business models you can use to make money on the Web, although they are often combined:

• Sell your own products
• Sell your own services
• Drop ship products
• Recommend affiliate products
• Sell ad space
• Create a joint venture with like-minded businesses
• Start an affiliate program

Brian Carter [2005] on the other hand, says there only five revenue sources online and summarizes the pros and cons of each:

• Selling physical goods requires warehousing, shipping, returns, and heavy customer service. It’s a significant investment of time and/or money, but this has the highest revenue potential.
• Just running ads is much less work, especially with if you don’t have to deal directly with the advertisers. However, the earnings per click are quite low, so you need a lot more traffic to make good money. And not all informational topics are profitable. For example, searchers for entertainment and sports information don’t tend to click on ads or buy anything.
• When you promote other people’s goods as an affiliate, you sit between the last two options—it can pay better than ads and be less hassle than hard goods. But you still have to provide content on profitable topics, and you need to be a comfortable and effective salesperson for the products that pay your bills.
• Developing and selling your own digital products is at least as much work as selling hard goods, but requires much less overhead. You can write an ebook, turn it into a PDF, and get it onto a website with very little money.
• And we shouldn’t end without mentioning that you can also sell your services online. If you write about what you do, whether you’re a web designer, lawyer, doctor, psychologist, carpenter, whatever, you can get web visits from prospects in your local area and turn those people into customers.

Source: eBook Marketing: Planning, Writing, Producing, and Marketing Your Ebook. eBizTutors: 2006. 

Reference: Corey Rudl . “Seven Ways to Turn a Profit Online,” Entrepreneur.com 05/02/05.

Reference: Brian Carter. “The Five Best Revenue Models in E-Commerce History,” Mainstream Webmasters 01/04/05.

Related Post: “Philosophy with a Hammer: The Google Myth,” EBT Blog 11/17/06.

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