This is the second chapter in the series on understanding the various business models. In the first article, we saw the following business models:
- Advertising
- Affiliate
- Brokerage
- customization
Now, let us look at some more!
5. Crowdsourcing
Example: Kickstarter
You are crowdsourcing if you are able to assemble a sizable group of people to provide material for your website. Although there are many other variations of the model, crowdsourcing business models are most typically used in conjunction with advertising methods to create revenue.
For instance, Threadless allows designers to submit t-shirt designs and pays them a share of sales.
The secret to running a successful crowdsourcing business is to offer the “crowd” the correct incentives while yet allowing you to grow a sustainable company.
6. Disintermediation
Example: Dell
You normally work through a number of middlemen to get your product from the factory to the store shelf if you want to produce and sell it in stores.
Disintermediation occurs when you bypass every link in the supply chain and sell straight to customers, potentially lowering costs for your clients and establishing a more personal connection with them.
7. Fractionalization
Example: Disney Vacation Club
With a fractionalization business strategy, you can sell a portion of a product rather than the complete thing.
Timeshares are among the best illustrations of this business strategy. where a group of people can use a vacation house for a set number of weeks each year because they only own a share of the property.
8. Franchise
Example: McDonald’s
In addition to the service sectors of cleaning companies and recruiting agencies, franchising is widely used in the restaurant industry.
In a franchise business concept, you provide someone else with the recipe for launching and operating a prosperous company. You frequently also sell the franchisee access to a well-known brand and assistance with starting their business. You are essentially selling access to a successful company strategy you have created.
9. Freemium
Example: LinkedIn
A freemium business strategy allows you to charge for premium features and services while still offering a portion of your product or service for free.
Freemium differs from a free trial, in which users have access to a good or service for a brief time frame. Freemium models, on the other hand, only charge users who want access to more advanced capabilities; fundamental functions can be used indefinitely for free.
10. Leasing
Example: Cars
Although fractionalization and leasing might seem comparable, they are actually very distinct. Fractionalization is the sale of unrestricted access to a portion of something. Contrarily, leasing is similar to renting. A consumer must return the item they were renting from you at the end of the lease arrangement.
Most often, leasing is utilized for expensive goods that buyers might not be able to afford to buy outright but could instead afford to rent for a while.
We’re almost at the end of the article, but we saw only 10. You know what that means… there is a part 3!