If you want to start a business, I am sure that your company will have one of these 10 business models. So let’s dive into them.
Here users are allowed to use the basic features of a software, game or service for “free”, and then charge for “upgrades” to the basic package.
Examples: Google Drive, icloud and Slack.
Freemium is very common in web-based services (SaaS) and digital applications. In this case, the free version of the product is a growth engine, while the premium version provides long-term income.
It is based on the idea of selling a product or service to receive monthly or annual subscription income.
There are different types of subscription business models such as
Amazon Umbrella Subscription
Subscription pass
Subscription box
Subscription ecosystem
This is considered as the next step to the Freemium business model if the customer is interested in paying monthly for a premium feature of the product.
This is a pricing strategy in which users pay based on their consumption.
It is used by cloud computing companies like Google Cloud, AWS, etc. In short, the more you use it, the more you pay.
A marketplace is a type of e-commerce site in which product or service information is provided by third-party sellers and the company takes a cut of the transaction (15%-25%).
Examples – Amazon, Fiverr, Urban Company
There are different types of Marketplaces such as
Light Markets – Craigslist
Managed marketplaces – Airbnb
Highly managed marketplaces – Amazon
FFS’s business model is based on charging clients a fixed and variable fee for each payment made.
It is used by companies like Stripe and Razor pay where they deduct between 1% and 2% as collection costs on the transaction amount.
Example: Stripe charges 2.9% + 30¢ for each successful payment transaction.
Revenue is generated by directly selling an item or service to a customer.
Widely used by e-commerce sites or any other products purchased online. Ex. Ship, Mother Earth
Used by social media giants and search engines, who use your search data and interests to display ads.
Example: Google and Meta
It keeps users out of the equation so they don’t pay for the service or product offered, for example, Google users don’t pay for searches.
Job portals can make money by charging an update from both the candidate and the recruiter who is on the web.
In this case, the franchisee (owner of the premises) uses the registered trademark, brand and business model of a franchisor (company).
Some examples are Dominos, KFC, etc.
In this type of business model, an item is sold at a low price to increase sales of a complementary good, such as consumables.
Examples: Gillette razor and blades, CCD coffee machine and coffee beans and HP printer and cartridges, etc.
Benefits of the razor approach
Recurring benefits for the brand.
Spare parts with higher margins
Good upselling and cross-selling opportunities
Stable profit model
