17 Common Business Model Examples

17 Common Business Model Examples

You don’t have to invent a new business model to start a business. The majority of businesses use existing models and refine them for a competitive edge. Here’s a list of business model examples to start your own business.

1. Advertising

The advertising model has become more sophisticated as the world has transitioned from print to online. The model revolves around creating content that people want to read or watch and then displaying advertising to your readers or viewers. In this model, you have to satisfy two customer groups: your readers or viewers, and your advertisers.

Advertising examples:

– CBS

– The New York Times

– YouTube

2. Affiliate

The affiliate model uses links embedded in content instead of visual advertisements. For example, if you run a book review website, you could embed affiliate links within your reviews. Amazon will pay you a small commission for every sale that you refer to them.

Affiliate examples:

– TheWireCutter.com

– TopTenReviews.com

3. Brokerage

Brokerage businesses connect buyers and sellers and help facilitate a transaction. They charge a fee for each transaction.

Brokerage examples:

– ReMax

– RoadRunner Transportation Systems

4. Concierge/customization

Some businesses add a custom element to the transaction, making every sale unique for the customer.

Customization examples:

5. Crowdsourcing

If you can bring together a large number of people to contribute content, then you’re crowdsourcing. Successful crowdsourcing businesses provide the right rewards to entice the “crowd” while building a viable business.

Crowdsourcing examples:

– Kickstarter

– Patreon

6. Disintermediation

Disintermediation is when you sell directly to consumers, bypassing the middlemen in the supply chain.

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Disintermediation examples:

7. Fractionalization

Instead of selling an entire product, you can sell just part of that product with a fractionalization model.

Fractionalization examples:

– Disney Vacation Club

– NetJets

8. Franchise

In a franchise model, you sell the recipe for starting and running a successful business to someone else, along with access to a national brand and support services.

Franchise examples:

– Ace Hardware

– McDonald’s

– Allstate

9. Freemium

With a freemium model, you offer part of your product or service for free and charge for premium features or services.

Freemium examples:

– MailChimp

– Evernote

– LinkedIn

10. Leasing

Leasing allows customers to rent a product for a while, commonly used for high-priced products.

Leasing examples:

– Cars

– DirectCapital

11. Low-touch

With a low-touch model, companies lower their prices by providing fewer services.

Low-touch examples:

12. Marketplace

Marketplaces allow sellers to list items for sale and provide customers with easy tools for connecting to sellers.

Marketplace examples:

13. Pay-as-you-go

Customers get charged for actual usage at the end of a billing period, common in home utilities.

Pay-as-you-go examples:

– Water companies

– HP Instant Ink

14. Razor blade

Sell a durable product below cost to increase volume sales of a disposable component.

Razor blade examples:

– Gillette

– Inkjet printers

– Xbox

– Amazon’s Kindle

15. Reverse razor blade

Offer a high-margin product and promote sales of a low-margin companion product.

Reverse razor blade examples:

– iPhone & iTunes

– Peloton

16. Reverse auction

Sellers present their lowest prices to buyers, who choose the lowest price presented to them.

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Reverse auction examples:

– Priceline.com

– LendingTree

17. Subscription

Consumers are charged a subscription fee to access a service.

Subscription examples:

– Netflix

– Salesforce

– LivePlan

Innovate with established business models. You don’t need to invent a new model. Using existing models can lead to success because they have been proven to work. You’ll be innovating within that existing model to grow your business. For more examples and an overview of selecting a viable business model, check out our full business model guide.

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