What is an Internet Business? Types of models and websites?

What is an Internet Business? Types of models and websites?

What is an Internet Business? Types of models and websites?

Internet business has become very popular around the world since the introduction of the Corona pandemic restrictions. Fortunately, modern technology has made setting up an online store easier than ever. Whether you are a large company or a retailer, online space will help you a lot to achieve your sales and branding goals.

If you are also planning to take advantage of the internet space during and after Corona and start your own internet business idea, join us at the end of the article to answer all your questions, including what types of internet business? Limitations, Benefits and Challenges… Answer this path.

What is the definition of Internet business?

Internet business or e-business as a new business model has made it possible for companies and retailers to buy and sell online.

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In fact, being online and making money from the Internet helps companies to offer and market their goods and services in a smooth way to potential consumers and customers without time and space constraints.

Online business experts have divided them into different types, each of which we will examine in the following.

Internet business is a type of business by which goods and services are bought and sold online. Since this business model includes a wide range of customers, it has attracted the attention of large companies and retailers.

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What are the types of online business models?

The question that probably comes to your mind is what are the types of internet businesses? In fact, Internet business is divided into one or two of four different models, depending on who buys and who is the seller:

1. Business-to-Business

In this model, sales actually take place between two businesses; That is, sales are made from one business to another; Such as selling a physical product such as building materials or services such as representing a company.

2. Business-to-Consumer

As consumers of goods and services, most of our favorite brands use this Internet business model. From fashion and clothing, wooden furniture and furniture to gym membership, most of the goods and services we “need” or “want” are related to this business model.

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3. Consumer-to-Consumer

In fact, no business is involved in this model, and consumers sell goods and services to each other with one platform. Like the wall platform or eBay.

4. Consumer-to-Business

In this model, a consumer provides his services to a business and sells them. Freelancers are the best example of this business model.

Four types of online business

If you are looking to start a money making business online, you can choose from four major online business models and make money.

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You can use these as a starting point, but that does not mean that it is not possible for your business to expand and reach higher levels. But before you start, you need to ask yourself, “Who are my main contacts” and “What part of the online space do they use?” After answering these questions, you can connect with your target community and start your business through a website, social media or both.

Digital jobs

In this model of internet business, you generally do not need a large place and you probably manage your business at home or in a small office.

The product presented in this model is non-physical and digital. In fact, these jobs are based on launching a blog, selling website templates, doing advertising through sales collaboration, making mobile software, producing audiobooks, and so on.

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Service-based jobs

By launching this internet business model, you will reach potential customers and provide services to them through online space.

You can run your own business from home or a small office.

Depending on your capabilities, you may offer a variety of services. For example, you can earn money by designing logos for brands, doing corporate accounting and..

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There are also many service businesses that attract customers through the online space but provide face-to-face services such as interior and decoration designers, car washes, cleaning companies and so on.

Product-based e-commerce

As it turns out, in this type of e-commerce, products are sold.

In addition to companies or individuals who sell products in a limited way online, large stores such as Diane Affiliate, Digikala and Amazon also use this online business model.

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In addition to physical products, non-physical products such as audiobooks are offered in this online store. But since this business is based on e-commerce, there is no physical store for face-to-face visits.

If you are also interested in this online business model, in addition to paying attention to the important points in setting up an online store, it is necessary to select the best product for online sales by researching and searching to achieve profitability in this relatively saturated market.

Online Retail Trading

This model of online business is commonly used by retailers who, in addition to the physical store, sell their products or attract customers through the Internet.

Consider, for example, a clothing store that, in addition to selling in person, also launches a website to introduce new products, potential discounts, and online sales. Traditional businesses such as grocers, perfumers, etc. can also launch their online sales system and cover a wider range of customers by launching a website and working on social media such as Instagram, in addition to introducing their products, properties and applications. Give.

As you can see, a wide range of people without initial capital or with minimal capital can start their own money-making online business and continue to earn and earn during the corona and beyond without the risk of illness or unforeseen holidays. To earn.

A few ideas for starting an internet business

It is possible to start many online businesses without initial capital and only based on your abilities and interests. You can determine your path by examining unrealized internet business ideas in Iran and also by being inspired by successful businesses. Here are some internet business ideas.

  • Subscribe to affiliate marketing and advertising programs
  • Using social networks for education, teaching and webinars
  • Manufacture and sale of art and handmade products
  • Influencer marketing via Instagram
  • Freelancing
  • Website design, WordPress template sales, graphic design
  • Launching an online store

Types of Internet business revenue models

Types of Internet business revenue models

After reviewing the types of internet business models, it’s time to mention their different ways of earning money:

1) Dropshipping

In this revenue model, businesses or individuals sell products on their website, which in fact they neither produce nor own.

These products are packaged by a third party and shipped to the customer, and the owners of the Dropshipping sites do not have access to any of these products.

The managers of these sites are in contact with only a small part of the business of the company or the person who produces the product.

This business model is a lucrative and highly lucrative online business. The external Wayfair site, a site selling wood products and furniture, is a good example of this.

If you choose this revenue model to start your internet business, before entering it, remember that this field is very competitive, and despite the high profit, you will have a long and difficult road ahead.

2) Subscription

Purchasing subscriptions for magazines and newspapers was very common in the past. But just when we thought this revenue model was being eliminated, it returned to its original path with a different look in the form of shared packages.

In this income model, the consumer registers to receive a specific product on a monthly basis.

There are several examples in this field, such as buying book subscriptions, food products, health and beauty products, and مدل This internet business income model is one of the best ways to retain customers, and in addition, you have accurate statistics of the amount of goods in stock and How will you provide them?

3) Private Labeling / Private Labeling

This means that the company that produces a product sells its product under the brand name of another company.

In fact, all individuals or companies that operate on this revenue model perform all the steps, including production, packaging and sales to the customer, in a direct and organized manner.

It may seem complicated and technical at first glance, but many small businesses fall into this category. Consider, for example, a woman who bakes pastries at home and sells her produce through a bakery.

4) White labeling

The companies that use this revenue method actually buy the products of another company and distribute them in the market under their own brand.

It may seem a little strange, but this method is quite legal and very common.

For example, many people who start their own Internet business on a small scale and sell another company’s product under their own brand by making money from Instagram.

5) Wholesale / wholesaling

A wholesaler is an individual who acts as an intermediary between the manufacturer and the retailer and the small internet business and makes a good profit in this way. Wholesalers help retailers and manufacturers by predicting sales of products to retailers and manufacturers.

6) Rent and Loan

By starting a business based on a rental and loan model, the consumer only pays to rent a product or service, not to buy it.

An old example of this is the revenue model of the car rental business. But today’s example of internet business in this field is the Iranian startup “Rentol”. In this startup, real estate, industrial machinery, wedding services and… are rented.

7) Freemium

This model is commonly seen in digital products and in the case of Internet business.

In this model, it first receives the free version of the product.

However, in order to use the additional features of the product, it faces limitations that require the purchase of a subscription and, consequently, payment. Many startups that design and offer mobile software benefit from this revenue stream. But an external example is the Spotify music platform.

Types of e-commerce websites

There are several types of e-commerce websites, including:

Website of a personal brand (a seller)

Most internet business websites fall into this category.

In these types of websites, only the goods or services of a company and a seller are sold. For example, the dedicated Adidas brand website, which sells only the company’s products.

At first glance, these types of websites may seem like big brands, but all start-ups or large businesses can start their own website without any professional experience and with the guidance of experts.

Online retailers (consisting of a certain number of sellers)

These types of websites collect and sell a variety of products from different vendors separately.

These websites selectively collect products, and to create a beautiful and consistent appearance on the site, they are responsible for photographing the products and placing descriptions about them.

Product selection, seller selection, how products are displayed, inventory management and finally shipping are other tasks of these sites. Macy’s, Digikala and Amazon are examples of this type of website

Sales Markets (consisting of several vendors)

These sites impose restrictions on marketable products. And only in case of disagreement and dispute between the seller and the customer will take action. Otherwise the sellers on these sites have a free reign. Sites like Etsy and eBay fall into this category.

What are the limitations and benefits of Internet business?

business-pros-and-coins

As you can see, internet business is any online business model that leads to the sale of a product, service or advertisement through online sales collaboration.

This method of business has changed the modern market all over the world, including Iran, in recent years, especially since the beginning of the Corona pandemic.

According to experts, these changes will last even after the corona and beyond its limits, so joining this path is the best option for all jobs.

Due to the Corona epidemic, most businesses are focusing on online sales through social media or the web. In addition to the benefits of online commerce, there are some limitations that we will address below:

1) Reduce costs

The cost of setting up an online store is much lower than setting up a company or office.

However, we can mention the cost of setting up a site and buying a domain, which is still much lower than costs such as rent, security, water, electricity, gas and other costs related to physical premises. Of course, you can greatly reduce the cost of designing a website using ready-made WordPress templates.

2) Reduce the number of employees

Internet business requires fewer employees than a store or a physical company, and many things are done automatically. For example, an online sale of goods does not require a cashier, and payment is made automatically by the customer entering the card information.

3) A wide range of customers

Unlike physical businesses whose customers are limited to one place or city, making money from the Internet allows you to introduce your goods and services to a wide range of people on a global scale and reach many potential customers. Note that you will need a cohesive system to ship your goods or services to remote locations.

4) Saturated market

Starting an online business does not mean that you have no competitors. Conversely, to be seen among a multitude of similar companies online, you need to differentiate yourself by competing with different products or discovering existing potentials.

5) Lack of interaction

With the physical presence of the customer in local businesses, it is possible for the seller to influence the buyer by interacting and communicating face to face with the buyer, in order to share his experience with others in addition to buying the product.

But in an Internet business, it is difficult to gain trust due to the lack of face-to-face interaction, and as a result, in addition to implementing online sales tips, you need to work harder to achieve it.

6) Support systems

Successful online business requires efficient and effective after-sales service. Because if consumers buy a product from a physical store and need to replace the product due to a product defect, they go to the store in a relatively easy process and replace the product.

But this process is more time consuming and complicated in online stores.

If you want to launch your online store idea, to succeed, and to avoid customer frustration, you need to have an organized system for returning defective goods.

7) Internet connection

Another limitation of an Internet business is the interruption of the Internet or the problems associated with the website.

If for any reason your website or social media network has problems selling for hours or days, you will lose a lot of time and money.

During this period, the customer may encounter an error message while registering the order and generally cancel the purchase and share his inappropriate experience with others.

#Internet sales ideas drastically reduce the need for face-to-face and physical stores and expand customers. Internet business has many advantages for sellers and customers located in small towns and suburbs. Even if you live in big cities, this way you can access bigger markets.

For example, many businesses have become a money-making online business by optimizing their search engine and getting more traffic to their site.

# You will have a very flexible work shift by starting an internet business.

E-shops are open 24 hours a day, 7 days a week. Even when you are asleep, your customers will place their order on the site. It is also possible for physical businesses to continue to sell their products by launching a website when the store is closed.

# If your internet business is based on providing services or selling digital products (music, movies, audiobooks); You will not have any worries about inventory.

But if you sell a physical product online, it can still be said that the cost of renting a warehouse is much lower than renting a property for retail.

# Managing an online business is much easier than a physical store. As the retail presence of a retailer increases, more employees are needed to handle matters and respond in a timely manner. It is generally much easier for online businesses to manage this situation without worrying about the lack of a physical environment.

#Maintaining customer relationships is much easier for online businesses. When placing an order or entering and subscribing to the site, the customer’s contact information, including email, is maintained and used to send promotional and sales emails. Also, using site cookies, you can check customer behavior and increase sales by sending retargeting emails.

# Customers generally prefer online shopping to face-to-face shopping. Corona conditions, tight urban living schedule, lack of cash use, heavy traffic, long queues are just some of the reasons why people prefer to shop online. In addition to customers, sellers do not need to handle cash, so transactions are easier, faster, and with fewer accounting errors.

# Integrating information about inventory, warehousing, transportation, packaging and handling of goods in Internet business is well done. In fact, logistics is the key to the success of an online business.

Digital classification of sales data and information, in addition to increasing accuracy, speed, identification of bestsellers, allows you to take a little risk and include obsolete items in your catalog because maintenance costs are very low and All you have to do is add a new page to display the product on the website.

# Or the existence of all the mentioned items, some customers still prefer in-person shopping, especially for specialized goods. Before buying, these people want to try the product in person and consult with an expert about their needs and choosing the best product. Unfortunately, adding a landline to an online business does not have the effect of buying in person.

#Credit card security is one of the risks of online shopping. Customers are usually concerned about cyber attacks and phishing when shopping online and entering their bank card information on the site. Your site needs to be secure in order to convince customers to enter banking information and make purchases.

# Upgrading the level of shipping, shipping or retrieval services is very effective in attracting internet business customers.

Usually, after ordering the goods, the customer has to wait for a few days or pay more for fast delivery. This may discourage the customer. Unfortunately, this perspective often causes us to become overwhelmed when it comes to sending and receiving goods.

#Online jobs, like other jobs, are subject to tax and obtaining the necessary licenses to set up an online store.

#Online shopping allows consumers to compare prices with a few simple clicks; So if you can not do the right pricing, you will quickly lose customers.

# Even if you reduce the price of products, in this competitive pricing campaign, you will find sellers who offer lower prices. E-commerce is generally tied to discounts. Although the sellers do not like it.

# Although the delivery of goods to the door is very satisfying and attractive for customers, but the management of goods transportation and logistics is one of the most difficult parts of starting an Internet business.

# Many online businesses do not even have to stock up on costs. You can buy and send the product directly from the manufacturer after the customer places an order.

# Ability to work in different places: having one person

7) Internet connection

Another limitation of an Internet business is the interruption of the Internet or the problems associated with the website.

If for any reason your website or social media network has problems selling for hours or days, you will lose a lot of time and money.

During this period, the customer may encounter an error message while registering the order and generally cancel the purchase and share his inappropriate experience with others.

#Internet sales ideas drastically reduce the need for face-to-face and physical stores and expand customers. Internet business has many advantages for sellers and customers located in small towns and suburbs. Even if you live in big cities, this way you can access bigger markets.

For example, many businesses have become a money-making online business by optimizing their search engine and getting more traffic to their site.

# You will have a very flexible work shift by starting an internet business.

E-shops are open 24 hours a day, 7 days a week. Even when you are asleep, your customers will place their order on the site. It is also possible for physical businesses to continue to sell their products by launching a website when the store is closed.

# If your internet business is based on providing services or selling digital products (music, movies, audiobooks); You will not have any worries about inventory.

But if you sell a physical product online, it can still be said that the cost of renting a warehouse is much lower than renting a property for retail.

# Managing an online business is much easier than a physical store. As the retail presence of a retailer increases, more employees are needed to handle matters and respond in a timely manner. It is generally much easier for online businesses to manage this situation without worrying about the lack of a physical environment.

#Maintaining customer relationships is much easier for online businesses. When placing an order or entering and subscribing to the site, the customer’s contact information, including email, is maintained and used to send promotional and sales emails. Also, using site cookies, you can check customer behavior and increase sales by sending retargeting emails.

# Customers generally prefer online shopping to face-to-face shopping. Corona conditions, tight urban living schedule, lack of cash use, heavy traffic, long queues are just some of the reasons why people prefer to shop online. In addition to customers, sellers do not need to handle cash, so transactions are easier, faster, and with fewer accounting errors.

# Integrating information about inventory, warehousing, transportation, packaging and handling of goods in Internet business is well done. In fact, logistics is the key to the success of an online business.

Digital classification of sales data and information, in addition to increasing accuracy, speed, identification of bestsellers, allows you to take a little risk and include obsolete items in your catalog because maintenance costs are very low and All you have to do is add a new page to display the product on the website.

# Or the existence of all the mentioned items, some customers still prefer in-person shopping, especially for specialized goods. Before buying, these people want to try the product in person and consult with an expert about their needs and choosing the best product. Unfortunately, adding a landline to an online business does not have the effect of buying in person.

#Credit card security is one of the risks of online shopping. Customers are usually concerned about cyber attacks and phishing when shopping online and entering their bank card information on the site. Your site needs to be secure in order to convince customers to enter banking information and make purchases.

# Upgrading the level of shipping, shipping or retrieval services is very effective in attracting internet business customers.

Usually, after ordering the goods, the customer has to wait for a few days or pay more for fast delivery. This may discourage the customer. Unfortunately, this perspective often causes us to become overwhelmed when it comes to sending and receiving goods.

#Online jobs, like other jobs, are subject to tax and obtaining the necessary licenses to set up an online store.

#Online shopping allows consumers to compare prices with a few simple clicks; So if you can not do the right pricing, you will quickly lose customers.

# Even if you reduce the price of products, in this competitive pricing campaign, you will find sellers who offer lower prices. E-commerce is generally tied to discounts. Although the sellers do not like it.

# Although the delivery of goods to the door is very satisfying and attractive for customers, but the management of goods transportation and logistics is one of the most difficult parts of starting an Internet business.

# Many online businesses do not even have to stock up on costs. You can buy and send the product directly from the manufacturer after the customer places an order.

# Ability to work in different places: having one person

Conclusion

After getting acquainted with the concept of Internet business and answering the question, what are the types of Internet business? It’s time to dump her and move on. Everything may be very digital and virtual at the beginning of the journey, but with time and progress, you can expand your business and be physically active and use the online space to introduce more products and sales. Ultimately, everything depends on you.

Answers to frequently asked questions

What is the best internet business?

Education. Today, people all over the world have come to the conclusion that what they have learned in schools and universities does not work in life.
As a result, efficient and accurate training is one of the best ways to earn money online. In addition to that, sales of digital products, launching blogs, online stores, etc. are in the next ranks.

Examples of Internet business in the world?

Many Internet businesses have been launched in the world. The most popular are Amazon, eBay, Wayfair, FirstLeaf, Airbnb, Fat Llama.

What are the conditions for starting an internet business in Iran?

Before starting an online money-making business, first consider your interests, abilities, and capabilities. Then carefully plan and study the performance of competitors by carefully planning, studying and researching the selected idea and domain.
Now you need to identify potential contacts and customers and start your activity on the right platform according to their tastes and needs.
Note that before starting an online business, like any other job, after determining the scope of work and choosing the business name, it is necessary to obtain a license and electronic symbol from the relevant organizations.

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