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The Most Profitable Revenue Models For Online Businesses

The Most Profitable Revenue Models For Online Businesses

As online business models continue to evolve, entrepreneurs are looking for new revenue models that will allow them to scale up operations faster, maximize profitability, and guarantee a successful exit. If you plan to launch your own digital startup, take a look at some of the revenue models below, and use them to your advantage in the competitive marketplace.

The Subscription Model

This revenue model is perfect for SaaS (software as a service) companies, as well as premium digital content providers such as the Financial Times. Increasingly, it’s also used by large online retailers like Amazon that offer significant discounts on products if you decide to purchase them automatically on a recurring basis.

You can also go down the digital content creator route and, for example, ask your followers to support you with a monthly Patreon subscription. You can even ask your fans to directly contribute to your YouTube channel, offering them premium content in exchange for $5 or $10 a month. The same idea can be applied to mobile apps and has been used with great success by meditation or fitness program developers.

The In-app Purchases Model

Generating in-app purchases is one of the most successful online revenue models of recent years. Instead of charging customers a single, larger fee upfront, many businesses offer their games for free and tantalize you with extras only after the installation. This strategy is used with great success by some of the most popular poker websites, where players usually get a welcome bonus at the start, but then need to buy either play-money or real-money chips to participate in games with higher buy-ins.

The same model applies to popular mobile racing games and first-person shooters. For example, it’s possible to install a popular arcade racing game like Asphalt for free, but if you want to drive a Bugatti, you’ll need to pay up.

The Online Publisher Model

Digital publishing isn’t going anywhere, and new content-based websites are springing up online every day. If you decide to pursue this model, you will definitely need some expertise in search engine optimization as your growth will largely depend on the organic reach of your content.

However, once you’re able to scale up your operation, you can generate recurring revenues from display advertising, affiliate marketing, sales of digital products, and sponsorship deals with brands. The crucial thing here is to focus on a single niche to attract a homogenous audience which you can later monetize.

The E-commerce Model

Selling physical products is still one of the most lucrative ways to generate profits online. Nowadays, you can apply advanced marketing strategies to make your e-commerce business hugely successful. Besides promoting basic offers, you can also recommend extra products, and create sophisticated marketing funnels with upsells, down sells, and single-click upgrades.

It’s also possible to track your potential customers’ behavior on-site and offer them discount coupons to incentivize them to buy, as well as program AI-enabled chatbots that will answer their questions. The world of online marketing is becoming more automated every day, so look for the best software solutions that will enable you to streamline your operations and generate a solid revenue stream.

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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.