There are a variety of Internet marketing business models. This is the reason why Internet marketing (IM) means variety of things to a different people. Generically, IM is about making money online. There are four common models for making money online.
E-commerce
Lead-based websites
Affiliate Marketing
Local Internet marketing
E-commerce is perhaps the most familiar model. The largest e-commerce store on the Web is Amazon.com. E-commerce is like having your own store, except instead of having a store on Main street, you have it on the Internet. Anytime you have gone to a site that uses a shopping cart, you have gone to an e-commerce store.
There are two models of e-commerce. The first is where you stock and sell your own inventory, or perhaps your own product(s). The second model is the “drop-ship” model. For this model, you do not actually carry any inventory. You have an agreement with a wholesaler. You sell the product at retail, and pay the retailer the wholesale price and shipping, and the wholesaler will ship it directly to the customer.
Lead-based websites generate revenue by collecting leads and selling them to people who will convert the leads into sales. You do not, but may, get commission on the sale, but for the lead itself. Some products are too complicated to actually sell over the Internet, like insurance policies. What the lead-based website does, is attract people who are interested in the product and entices the visitor to leave contact information for a follow up call from a salesperson.
Lead-based websites are sometimes referred to as Commission Per Action or CPA sites. A person acts by leaving contact information, and the web owner is paid for that information.
Affiliate marketing is perhaps the most common form of Internet marketing. As an affiliate, you act like a sales person who is being paid on commission. If you can entice a visitor to purchase the product via your web site, you get paid a commission. Many people sell products for Amazon.com as affiliates.
The final model is marketing for local business. Local business used to market through the Yellow pages. But more and more people are foregoing the Yellow Pages and simply doing searches on the web. The local marketing model is about helping local merchants to be found on the web when people are looking for their products and services.
You have been presented with the four common Internet marketing business models. These are e-commerce, lead-based or CPA, affiliate marketing and local marketing. The four models are popular because they are a viable way to make a living via Internet Marketing.
Are you thinking about Internet Marketing? Do you have it in you to go to the next step?
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