What Are The Different Types Of Online Business Models?

Online Business Models
Online Business Models
Online Business Models
Online Business Models

You might have observed that most of today’s startups appear similar to each other. This is mainly because, most startups have an online business model. Even though they appear similar each of these online business models are entirely different from one another as they use different methods to reach their target; thereby making a profit. An example of one such business model is the Amazon business model.

Here are the different types of online business models.

Advertising Model

This is one of the most common forms of online business models used by online startup companies. Companies like Facebook have utilized this business model and have made it popular. The main feature of this business model is that it gives free services to the user base and the content thereby generated by users will give an insight into their personal lives and buying behaviors.


Most of today’s startup companies use the web as a distribution channel. Instead of distributing their products through wholesalers and retailers, they take the orders for their products online and ship them directly to the customers. In this way, there is no need to pay wholesaler’s and distributer’s margin. Also the customers will get the product at a lower price and the company can still make huge profits.


The products that are sold by different online stores are difficult to compare and contrast. Many similar products have different prices, which makes the customers confused. This makes decision-making challenging. Intermediaries are unbiased websites that will provide valuable, correct, and unbiased information about the products. This helps the customers make the right choice.


There are several startup companies that are trying to create a subscription business model for their users. Most of these companies are content-oriented or educational.  The main advantage of a subscription business model is that the revenue generated by it will be relatively stable.


This is one of the online business models which is gaining popularity. This business model enables the purchase of goods and services from its manufacturers at a relatively lower price. The product is then sold to the customers at a different yet reasonable price; guaranteeing a profit. The best example for this business model are the travel websites.

User Group

This type of business model allows creation of a forum where like-minded people can come together and share their ideas. Some will make money from the events they organize. It also enables the sale of ancillary goods and services to the customers. However, the viability of this type of startup depends greatly on the emotional investment which the customers make.

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