Top 10 Types of Business Models
Types of Business Models: Every business has a different model of how they make money. Today we’re going to talk about the ten different business models of how to build your business around
These are ten different types of business models of how to generate revenue.
Top 10 Types of Business Models
Give the Product Away for Free.
A lot of times, people wonder why are they giving away the product for free? Because they make money on the back end of advertising.
A good example is YouTube, Facebook, etc… Many companies do this.
The Freemium model is a model with pay for upgrade linked; that is, it’s free, but if you want more features you need to upgrade, you have to go on. Subscribe to a specific cost that they have.
For example, an upgrade for $399, of 499 or 995. But you start up as a freemium.
Pricing is based on the average value of the customer.
So, you got five different customers, right and maybe health insurance, and perhaps auto insurance.
Somebody may be a great driver. They don’t have any issues. Somebody, maybe a terrible driver to have many cases, the average that out and comes out with a price point.
That’s average to the customer, and some may be paying a little bit higher. Somebody be paying a little bit less, but it is what it is like health insurance.
When he came out recently, they said, Well, why am I paying so much insurance when I’m younger, and I’m healthy? I don’t have any issues. You paying for the insurance of the people that are not healthy. But they’re getting a shared it is the average cost for the product they’re selling.
Model is priced based on product cost plus a margin.
It is traditional. You buy these pants for $20 you selling for $30. You buy this, you know, whatever product got for 15 bucks, you sell for 40 dollars.
Price with Recurring Low Subscription Payment.
An example is Netflix. It’s a very common model today. People say Netflix $799 etc. That’s not a lot of money times 100 and 50 million customers. It’s a lot of money.
Tiered Pricing Based on Volume.
So real estate, how much you by how much is your volume them or you buy? The less we charge you, you know, if you’re if I’m getting a commission contract with an insurance company, if you sell this much, policies will give you this much, but if you saw more will provide you with more
So it’s all volume-based. The more you do, the more leverage you have for negotiation. The more you do, the more, the less the cost is going to be to the customer because you’re banking on volume.
Revenue as a Percentage of Every Transaction Commission.
That’s a commission that they’re doing. The revenue comes from a commission base that they’re paying out.
Low Product Price, But Support is Extra.
This model is everywhere. The product doesn’t know much, but you want the extra support here is $99 per year or $999. All that stuff that additional that they tag on number nine low entry price with priced features other.
So, you’re buying a car, this car right here, but if you want to add this and if you want to add this and if you get this, it’s all the additional cost that you have, right, that’s the other cost.
Low Price, But Money Is Made Based on Disposable.
So, I sell this razor stick, and I sell it for ten bucks. But I know you got to come and by the razors every time you don’t shave because it goes from green to white, you must buy I’m making my money on disposable.
It’s a vast Procter and Gamble top of a business model, but it’s beneficial again.
It’s all about how you want to set up your business model to generate revenue. There are many different ways of doing it.
These are only 10 of the ways to do it.