Types of E-Business Strategies
Even with the Internet constantly evolving, online businesses have mostly settled into a few categories of e-commerce. Several strategies have proven successful to drive revenue and promote a company both online and off. Choosing the best e-business strategy for either an established company or a startup involves making decisions about where money should come from and how the website can bring in the most traffic.
Many e-businesses succeed by hosting a site for auctions and online stores on which member can place items for sale. In this model, the website owner takes a flat fee or a percentage of sales in exchange for promoting the online marketplace and assisting in processing the transaction. Some businesses combine this option with their own warehouse, offering both their own goods and advertising members' listings for the same items. Additional revenue for the website owner can come from members paying additional fees to spotlight their offerings on the main website.
A turnkey business functions with a pre-existing template for its given industry. These websites may offer anything from diet pills to a dating network for a particular city. The turnkey model requires less work than others but also faces stiff competition. The operator must do some legwork to produce the site's content and sell ad space to generate more income. Marketing mostly relies on the optimizing the website to appear on as many search engine result pages as possible.
Some websites develop into effective e-businesses without directly selling anything at all. With enough worthwhile content and frequent updates, blogs and similar informative sites can succeed simply by selling ad space. The profitability depends on the motivation and talent of the people producing the content. A combination of entertaining the reader and drawing in references to appropriate consumer products can potentially generate enough advertisements and revenue sharing to support the site as a business.
The freemium model for e-business involves offering some content for free while charging membership dues or other fees for special access or materials. Often in combination with another business model, a freemium site caters to both casual visitors and devoted fans. The site can offer all content for free at its beginning to generate interest and later begin charging for membership, or the site can permanently divide its content between free and paying members.
For an existing company, a new company starting with a surplus of product or a company liquidating merchandise from retail industry, an e-business can function as a sales point for a warehouse of inventory. For companies with physical stores, the website can offer overstocked items, popular items selling at high volume or obscure items unlikely to sell at single locations. An online store can also serve to liquidate leftover merchandise bought at closeout from various suppliers.
While allowing users to register accounts and contribute their own information and content, a social media site can create revenue from ads on the site as well as selling the members' information as marketing data. The website can have either a broad scope or a very specific one with a geographical, cultural, or interest-based theme. The site entertains and informs its users, who can receive targeted ads based on what information they've entered on the site.