Internet Business Models

I realized I started out the first post talking about monetizing a website, and haven’t really talked in more general terms about making money online. So I’d like to talk a little about the business models on the Internet.

A business model is basically a description of how a business operates, and in our case the most important part of a business model is how we make money.

The Internet has two basic ways to make money online: advertising and sales.

I talked a little about advertising in the last post. You provide human eyes to look at advertisements, and companies pay you money. They may pay you only when someone clicks on an advertisement (e.g. pay-per-click or PPC) or they may pay you when someone just sees the advertisement (e.g. pay-per-impression or CPM) or they may pay you only when someone clicks on an advertisement and then buys something (pay-per-sale).

Selling advertising space is the easiest way to get started making money online, but it does generally require a website.

Sales is the other main way to make money on the Internet. You have a product, and you create a website to allow customers to purchase your product. This also requires a website, but there are companies that will make it easy for you to create an online store. Yahoo, for example, will do this.

Since I haven’t tried creating an online store yet, I won’t recommend any specific programs. If you don’t want to go to the trouble of starting an online store, you can also promote affiliate programs. An affiliate program is where you become a salesperson for an online product, and promote it on your blog, in your email signature, on a web page, where ever. When someone clicks on your link to the product and buys it, you get a commission.

So advertising and sales are the two traditional ways to make money online. There are some other options that I’ll talk about in later posts.

2 Replies to “Internet Business Models”

  1. After reading this post, I feel It is a win win situation when everyone gets what they want. I have been trying to work on introducing products right into my post with keywords and links. I don’t want it to look to trashy though. I have created a few stores but I forgot all about them until I read this post. Some salesman I am huh?

  2. I’ve sold a couple of clocks on CafePress. I only made some things so that I could say I was using my logo and name as a trademark. With the logo on the stuff in my CafePress junk shop, I’m doing business under that name, using the image as a logo. I never expected to actually SELL any of the stuff. It was fun to design them, though.

    I had an Amazon aStore for a couple of years, and haven’t sold anything with it. I think the Amazon affiliate links work better in a website’s context than in the aStore. In my opinion, the aStore is a waste of time, but the direct affiliate links are worthwhile.

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