Business model examples by type – inspire out of box thinking for your project

So many business model examples can be given because so many types and mixtures exist (both complicated and straightforward).

An online retailer is an example of a simple one – the company buys goods and uses online channels to sell them. On a more complex model work large information portals – they presented with a variety of monetization options (from selling ads inventory and paid editorial articles to sell some digital products and services of their own).

A more modern business model example developed in the modern age of the Internet is SaaS (Software as a Service) – a software solution in the cloud usually sold via a subscription model (recurring payments).

So let’s take a closer look at business model types and dig into some examples.

Business model types

The most current categorization of business models on the Internet published by North Carolina State University Professor Michael Rappa (North Carolina State University). The professor identified nine basic concepts:

  1. Brokerage
  2. Advertising
  3. Infomediary
  4. Merchant
  5. Manufacturer/Direct
  6. Affiliate
  7. Community
  8. Subscription
  9. Utility

1. Brokerage

The business connects buyers and sellers and conducts transactions between them, for which it charges a certain amount of money (fixed rate or percentage of the sale).

  • Marketplace Exchange. A company that provides a wide range of services covering the whole process of the transaction; from the market valuation of the goods to the control of the execution of the contract.
  • Buy/Sell Fulfilment.
  • Demand Collection System. Model “Name Your Price” – the potential buyer makes the final (mandatory) bid for a particular product or service, and the broker ensures the execution of the order.
  • Auction Broker. A business that carries out the sale of merchants (individuals or companies). Collects costs for placement of goods and commissions, the amount of which is determined by the transaction amount.
  • Transaction Broker. A company that provides a third-party payment mechanism for transactions between buyers and sellers.
  • Distributor. Some catalog is connecting a large number of manufacturers with retail and wholesale customers.
  • Search Agent. A software solution designed to determine the availability and prices of goods or to search hard-to-find information.
  • Virtual Marketplace. Hosting service for online sellers that charges for initial site placement, monthly membership fees or transactions. It can also offer a transactional service or a related service e-Market services.

2. Advertising model

Expansion of the traditional concept of media – business presents content and services to consumers, broadcasts advertising of customers.

The advertising model works most efficiently either with the right niche selection or with large volumes of traffic.

  • Portal. A site with a high amount of data, which provides content and additional services. Personalized and niche portals exist – the first to offer users the possibility of customizations and interface and content preferences, while the latter targeted at a specific target audience.
  • Classfields. A list of purchase/purchase items. The business either charges a fee for listing or works according to the subscription model.
  • Resources with mandatory registration (User Registration). Projects with free content requiring visitors to create an account and provide certain demographic data – this allows you to track user behavior and develop portrait webbing segments used to conduct targeted advertising campaigns.
  • Search engine advertising (Query-based Paid Placement). Sale of advertising positions in the issuance of search engines.
  • Contextual Advertising. Advertising is displayed on the page, the content that is relevant to the ad.
  • Behavioral Marketing. Used by developers and webmasters, embedding advertising software into their solutions and resources to sell thematic advertising based on individual user activity while surfing in the World Wide Web.
  • Ads before the main content (Intromercials). Animated full-screen ad displayed when you go to the site (in front of the main content).
  • Interactive Advertising (Ultramericals). Interactive ads, for which the user must perform a specific action to close (and transition/return to the main content).

3. Infobrokerage

User data is of high value to businesses, and product information is valuable to consumers – information intermediaries sell useful data to customers and companies.

  • Advertising Platform. It translates banner ads on the websites of publishers that provide information about its traffic. Advertising networks also collect data about the people on their own for the sake of marketing performance.
  • Incentive Marketing is what it is – offering some remuneration to users in exchange for the desired action — widely used in mobile apps marketing to rank in various TOPs (lists) in stores.
  • Audience Measurement Service. Agencies that explore markets and consumer behavior on the web.
  • Metamediary. Facilitates the transaction between the seller and the buyer by providing information and providing relevant services. It does not take a direct part in the deal.

4. Merchant

Wholesale and retail online merchants of goods and services.

  • Virtual Merchant. A retailer that works exclusively on the Internet. A more comprehensive used term nowadays is e-commerce.
  • Click and Mortar. Traditional sellers that work online.
  • Digital seller (aka Bit Vendor). A company that sells exclusively digital products and services. Perform sales and delivery on its own.

5. Manufacturing (brand \ direct)

Within this model, the manufacturer independently carries out sales of its goods or services.

  • Purchase. Standard sale, in which ownership of the object of the transaction transferred to the buyer.
  • Rent (Lease). The buyer pays a certain amount for the temporary use of the product. The product refunded to the seller upon the end of the contract or in case of non-performance. It is also possible to buy goods by the tenant before the end of the lease term.
  • License.
  • Branded Content (Brand Integrated Content). Unlike the advertising model (sponsorship content), the company independently creates materials and websites to market the product/service.

6. Affiliate Marketing

  • Acquisition of leads/traffic from affiliates (partners).
  • Banner Exchange
  • Trade banner inventory on partner sites.
  • Pay Per Click
  • Payment for the transition of the potential target buyer.
  • Payment per action (Cost Per Action)
  • Fee for the visitor (referred partner) to perform a targeted action (for example, buying or installing an app).

7. Community

Internet users gather for communication or common interests on specialized web sites. The benefits provided by a variety of means of the use of the following: the advertising platform, subscription model, representation of additional privileges, etc.

  • Open Source. Software with open source code, jointly and voluntarily developed by the community of programmers. In place of the licensed, the solution is being entered through the integration with other systems, providing technical support and selling training materials.
  • Open Content. Public-generated content that can be added and edited by anyone. As a general matter, it provided through a free-of-charge model.
  • Public Broadcasting. Online broadcasting of non-commercial radio and television channels supported by user contributions.
  • Social Network. Websites for communication. These include both large-scale social networks and niche projects.

8. Subscription model

The user subscribes to a particular service.

  • Content Services. The business presents text, audio or video content according to specific subscription plans.
  • Person-to-Person Networking Services. Disseminate the information provided by the user for specific purposes (e.g., to find colleagues).
  • Trust Services. Associations whose membership indicates adherence to certain norms and standards.
  • Internet Service Providers. They offer network connectivity and related services for a monthly fee.

9. Utility

An opposite to subscription model, where a specific service provided, the form of payment is based on the consumed traffic/received information or other quantitative indicators.

  • Metered Usage. Payment based on the number of resources used (whether content or memory) provided by the company.
  • Metered Subscription Measure. It allows subscribers to purchase limited access to services.

Beyond business model examples