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Mark Kilpatrick

Mark Kilpatrick

6 Types of Business Models That Are Profitable

Are you an entrepreneur looking for a business model that will let you profit from your work? You’re not alone. Every year, thousands of people start businesses in the hopes of becoming wildly successful and rich. Unfortunately, most of those people fail to find sustainable business models that can support their dreams. The good news is that there are some tried-and-true ways to make money with your business—and I’m going to share them with you right now!

1. Business-to-Business

B2B is a business-to-business model that can be profitable if it’s done right. In this type of company, you’re selling directly to other businesses instead of to the general public.

Examples include law firms and advertising agencies, which provide a service for another company or organization and are paid for their work. If you’re thinking about growing your own B2B business, here are some things to consider:

  • You should have a clear idea of who your target audience is before starting your campaign.
  • You will need pricing structures that allow companies the flexibility to purchase goods or services from you as needed, rather than requiring them to buy large quantities upfront (this applies especially if what you’re selling doesn’t have long shelf lives).
  • Make sure there are enough qualified customers for the product or service so that even after accounting expenses like marketing costs, salaries and overhead costs such as rent/mortgage payments etc., there would still be profits left over after providing services/goods.

2. Business-to-Consumer

A business-to-consumer (B2C) model is any type of business that sells a product or service directly to the end consumer. This can include retail shops, online stores, and service-based businesses. Most B2C businesses will try to build a large customer base so they can maximize profits from the sale of goods or services.

Examples of B2C businesses include:

  • Retail stores like Target and Walmart
  • Online stores such as Amazon and eBay
  • Restaurants like McDonald’s and Chili’s

3. Freemium

A freemium model is when you offer a basic version of your product for free and then charge for a premium version. This can work well for both B2B and B2C companies, but it’s especially effective for SaaS companies. With this model, you can get people on board with something that works well enough to solve their problem or help them do something better. But then once they’re committed to using the product (or service), it makes sense to pay up so that they get more features or functionality from it.

The best example of a company that has used this model successfully is Slack (a chat app created by Stewart Butterfield). The company offers an app where users can communicate together in groups through private messaging and public channels; there are also integrations with other products like Dropbox and Google Docs so you can upload files to share inside your team chat rooms without leaving Slack itself; plus there are fun features like emoji reactions when someone types something funny into the group channel!

But if you want all those extra bells and whistles, as well as unlimited message storage space instead of 5GB worth of storage per team member limit on free accounts (which isn’t bad considering how much information we consume these days!), then you’ve got some options: You could sign up for one month using credit card payment ($10/month per person), two months ($8/month per person), three months ($6/month per person) or six months ($5/month per person). That’s just over half price compared with paying upfront at full retail price!

4. Auctions

Auction business models work by selling items through an online bidding process. The most popular example of this type of business model is eBay, which allows buyers and sellers to bid against each other until someone wins the auction.

Auctions can be profitable because they offer a very low barrier to entry. Anyone can create an account on any auction site and start listing products for sale immediately, so long as they have access to the items or services being sold (eBay requires sellers to provide photographs or videos of their good before listing it). You don’t need special skills—even if you’ve never sold anything before, your first few auctions might generate some quick cash!

The downside is that auctions are very competitive; there are lots of people who have already mastered how to sell on eBay make money with their website traffic, so you’ll have plenty of competition when looking for new customers in this niche market

5. Subscriptions

Subscriptions are a business model that charges customers a monthly fee for access to your product or service. The subscription model is popular among many companies, especially those that offer a premium version of their product and/or service. For example, Netflix offers its streaming service for $12 per month and Spotify charges $9 per month for its premium tier.

With this model, you need to provide high value to the customer in order to earn their trust and convince them that your product or service will be worth the monthly subscription fee. You also have to make sure you’re delivering on all fronts: You can’t just offer excellent video quality when it comes time for renewal; if there are any bugs or other technical issues with the app or website after six months of paying for it every month, then customers won’t renew their subscriptions because they feel like they’ve wasted money on something unreliable.

6. Affiliate or referral Marketing

Affiliate or referral marketing is a revenue-sharing agreement between an online retailer (the merchant) and one or more affiliates.

The affiliate can be an individual, company, website, or blog that has been engaged by the merchant to promote their products on their own channels. The merchant pays the affiliate a commission for traffic or sales generated from its referrals.

The commission is usually paid when a sale is made; however, some merchants might payout commissions on other actions such as how long visitors stay on the site.


We hope you’ve enjoyed this introductory primer on the six different types of business models! Which one sounds most interesting to you? What do you think it would take to make your dream business a reality?

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