The internet has made it easy to do business that can have a global relevance.
By Stephanie Obi
Online businesses are booming and have created a fantastic opportunity for young people to start businesses without necessarily having a huge capital. You can even start an online business from the comfort of your home, and with your smart-phone as long as you have access to the internet. The additional beauty of online businesses is that you can serve a lot more people regardless of where they live. Your customers are no longer limited to the city or country you live in.
Unfortunately, there is a lot of misconception around what an online business really is, so let’s start with some definitions. An Online business is first of all a business. It is not a website or a blog, it is a business. Like every business, it is created to solve a specific problem for people, and it has to be a solution that people are willing to pay for. Once you are clear about the problem you solve, you have to think about what business model to go with. Simply put, a business model is how you make money.
In this article, I will share eight online business models that have been tried and tested.
Advertising: In this business model, you make money by charging people or organizations a fee to advertise on your platform (website, blog, social media page, email list etc). To successfully run this model, you must have built up a platform that has a lot of traffic, as advertisers will pay you to access the people that visit your platform. Examples of Nigerian businesses that use this model are Bella Naija and Linda Ikeji. You can equally attract advertisers if you have a niche audience who engage on your platform.
Physical Products: In this business model, you make money by selling a physical product like clothes, shoes, gadgets, books, etc. You can partner with a logistic company to deliver your orders to people wherever they live. Examples of Nigerian businesses that use this model are boutiques that also have e-commerce stores.
Marketplaces: In this business model, you create a platform that houses different online stores and you make a commission from every sale that is made on the platform. Examples of Nigerian businesses that use this model are Konga which houses stores that sell electronics, clothes, phones, etc and Trayny which houses online courses from different facilitators. To successfully run this model, you must be able to market the products that have been housed on the marketplace.
Apps: In this model, you make money by selling access to an app or by offering in-app purchases. Many mobile phones now come with the Android and IOS operating systems which allow developers to upload their apps and earn an income from it. People who have been successful with this model often have a free version and give their users an option to pay for additional features in the app.
Memberships: In this model, you make money by creating a resource or software or a product that people have to pay a fixed amount monthly to access. A popular example of this is Netflix, which has a library of entertaining content that people have access to when they pay their membership fee. Another example of this is Basecamp, which is an online productivity software that small business owners pay monthly to use.
Affiliate Marketing: In this model, you make money by marketing another person’s product. You get paid a commission each time someone pays for the product you are marketing. People who have been successful with this model have built up a community of people who trust them and who will buy what they recommend for example bloggers, vloggers and podcasters.
One on One service: In this model, you make money by providing a service to another individual or organization. It can be business coaching, website development, brand consultancy, etc. Meetings can be held over platforms like Skype and Zoom. Contracts can be signed using platforms like HelloSign. Emails can be used as a means of communication and these days, people even use WhatsApp.
Online Courses: In this model, you make money by teaching what you know online as an online course. People who pay for your course will receive a username and password to access your content. This is currently an industry that is valued at over $107 billion as individuals who have a skill, talent or expertise and coming online, building their brands, growing their online community and creating online courses to sell to their communities.
With all these options, there has to be an online business you can start today.
Editor’s note: This article was originally published in the Spark Magazine. Find the magazine here to read other articles.