Choosing Your Online Business Model

There are many internet- based business models to choose from, however, they are broken down into two types – low traffic and high traffic.  My personal online business falls in the low traffic category, however, that will change to be a combination of both once my new program is launched.

Since there is a large learning curve on the internet, it’s a good idea to start out with a low traffic model.  Service based businesses are considered low traffic.  A sales site such as an ecommerce store is a high traffic business because the volume of traffic has to be high in order to make money.

Examples of high traffic business models includes low price products, the sale of merchandise, ebooks, videos, webinars, online courses or a combination of all of those.  It also includes paid subscriptions to newsletters, ezines, community membership sites, affiliate marketing, adsense sites and blogging.

Low traffic business model examples include mid to high priced products or training courses, coaching, consulting, freelancing, speaker services, and higher priced services, membership sites and others.

As you can see, there are similar types of models in both the high and low traffic categories – the higher priced your service or product, the less traffic you need to make money.

Let’s take a look at the six most popular models of online businesses.

1.     Blogging

A blog is simply an online journal of sorts.  You decide how many times a week you are going to post a new article, then write something to post on your blog.  Through Google you can add advertisements to your page, called AdSense.  The idea is that you drive traffic to your blog and they click on the ads and you make money.  The drawback is that for you to make money doing this, you have to really understand SEO and Google rankings, or hire someone that does.

My blog is a page on my website where I post articles relating to empowering teens and young adults to become entrepreneurs.  The majority of my articles are geared toward this topic.   I do not use Adsense though.  My blog is an addition to my online business rather than a business itself.

Right now I am not consistent with how often I post an article because I’ve been busy creating a new program.  However, I participated in several blog challenges where you post a new blog every day and other people comment and share your blog with the goal being to increase awareness of your business and traffic to the blog.  I used the posts from two of the challenges to write this book and my first book, 31 Powerful Lessons Empowering Teens and Young Adults to Develop an Entrepreneur Mindset.

2.      Affiliate Marketing

Affiliate marketing is where you make money through commissions from selling other people’s products.  This works if don’t have a product of your own to sell.  However, be aware that affiliate marketing is a high traffic model.  The person whose product or services you are selling has all the systems in place, you sign up with them, get your personal affiliate code, then hit the internet to promote their product.  I am an affiliate for the Word Press Store and for several coaches who sell expensive programs, or what’s commonly called big ticket products.

Once you drive traffic to their business, it’s up to them to make the sale and you receive whatever commission they are offering.  I earned two $1000 commissions when two people signed up for an online course that cost in excess of $3000 and I receive commission from time to time when someone uses my link to purchase the Word Press Estore, the Affiliate Software or other products.

You can do affiliate marketing through Clickbank as well.  They have a large database of products to choose from.  Find several that interest you, sign up and start promoting.

3.     Information Products

People that create and sell information products are often called Infopreneurs.  This is where you are selling information products that teach people how to do things.  For example, “How to Market Online,” “How to Buy a Car,” “How to Cook Chicken.”  The topics are only limited by your imagination.  You can also sell information products that are created by others if they have the resell rights attached.  Make sure you have permission to sell someone else’s work before you do.

You need to develop some skills to be an infopreneur.  You need to be able to either create or locate products with great content that people want.  You need to be able to drive traffic to your site in order to make sales, and you need to have some sales ability in order to convince people that this product is a good investment and will help them either solve a problem or learn how to do something.

Once you have these skills, you are in a position to make a nice income as information products are the top selling products on the internet.

4.     Ecommerce Sites

An ecommerce site is online retail store.  You can create your own store front of buy one from a company that is already set up.  This is called a “turn-key business.”  A turn-key business is like an online franchise.  The person you buy they store from usually has additional fees aside from the purchase price so do your homework before deciding to go this route.

Ecommerce sites are more difficult to position in terms of ranking in the search engines because they don’t often have fresh content.  You might want to add a blog to your ecommerce site so you do have fresh content and are consistently updating.  You can sell your own products if you have them to sell, like shoes, or car products, musical instruments, jewelry and just about anything that is legal.  You have choices here too.  You can keep your own inventory, or use a drop-shipper.  A drop-shipper is a company that stores the product and ships it for you.  You receive the order from your customer along with payment, you send an email with the order to the drop-shipper and they mail it out and charge you their price for the product.

I don’t recommend ecommerce as a way to start online if you aren’t already experienced in retail sales.  This type of business has a large learning curve and there is a lot involved, including returns, replacing broken items, knowing if there are restrictions to shipping certain items to certain states and a lot more.

5.     Provide Services

Providing services through an online site is known as freelancing.  You have to have a skill that you can promote in order to be a freelancer.  If you can write, do graphic design, know programming code, design games or be a virtual assistant (an online secretary or business manager), you can build a successful business as a freelancer.  You can also coach other people if you have the know-how and experience in a particular area to do.

There are drawbacks to freelancing such as having deadlines to meet.  If you aren’t disciplined and can’t meet deadlines, then this isn’t for you.  I used to freelance my writing services and believe me, it was a struggle sometimes to meet a deadline.  I never missed one, it just isn’t professional and you won’t get repeat business.

There are many places where you can list yourself as a freelancer.  I used to use and  Now there’s Fiverr as well where you provide a service for $5.  That gives the customer an almost risk free way to use your service and if they like you, you will have repeat client at full price and perhaps some referrals as well.

6.     Membership Sites

Membership sites seem to be trending as a business model right now.  Basically, they are a community that you provide an online site for, that people pay a fee to be a part of.  They are a lot of work because you have to continually update your information, add new content and keep up with your subscribers.  People can cancel their subscription at any time so your income could be inconsistent.

My business is going to have a membership site soon; however, there will be no charge for the site, at least in the beginning.  I will start the site as a Facebook group.  Membership will be limited to those people who have completed the certification process to coach my new program, Monetize Your Passion: Empowering Young Entrepreneurs to Start a Business, as well as their teen and young adult clients that have completed the coaching program.  The group will offer a place where both coaches and clients can make connections, network, find answers to their questions, marketing ideas, mentors and further learning opportunities.  Through this site, I hope to provide the support that is required long after the coaching program is complete.

I hope this helps you on your journey to choose the type of online business model that will be right for you.  As you can see, it can be complicated and require a lot of research and work on your part.  Are you willing to do whatever it takes to get a business up and running?

Do you have a clear picture of the areas of your life and business where change is required?  It might be time for a reality check so you can discover those areas where you are incomplete or could improve.  If are subscribed to my blog, then you already have Julia Neiman’s 2 Step Reality Check to Discover and Overcome the Hurdles That Stand Between You and Your Dreams.  If you don’t have a copy of the Reality Check, simply enter your name and email in the box at the top right side of the page and it will be on it’s way to your inbox in seconds.


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Maggie Lukowski - January 9, 2013

A very interesting post. I have been interested in affiliate marketing for products that I use and love. – Maggie
Maggie Lukowski recently posted…Simple Pleasures…My Profile

    Julia - January 9, 2013

    Thank you reading and leaving your comment Maggie. Affiliate marketing is best if you have a large list. I do not have a large list at this time but it’s growing. I just hit it right with that coaching program. I was shocked that two people used my link to sign up. You have to work at it though.

Kyna Baker - January 9, 2013

Great explanation of the options available for anyone interested in starting a business.
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    Julia - January 9, 2013

    Thank you for your comment Kyna. There’s so much to know and consider before starting an online business, isn’t there?

Nanette Levin - January 9, 2013

What a great post, Julia. Thanks for providing such a comprehensive and interesting perspective on high and low traffic internet business models. I’ve found adding some affordable products to a low-traffic model can increase visibility and revenue. Kindle, in particular (I get paid subscriptions to my free blog through here and also sell books – curiously, making print books available as Kindle Editions has actually helped increase print book sales)provides some great marketing juice while also adding to the company coffers. This happens not only with product sales, but also by introducing prospects to higher-priced services. I suspect the future will shine on those that incorporate the best pieces of both models.
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    Julia - January 9, 2013

    Interesting comments Nanette, thank you. One of the articles I read did talk about integrating both tiers. I think I’m going this by having a high ticket program and selling the books. There will be other programs and products in the future as well. I’m glad it’s working for you, that gives me hope :-).

Alyssa - January 9, 2013

You can also do a combination of one or two of these, which is what I do.
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    Julia - January 9, 2013

    As I said to Nanette, I did read that in one of the articles I read for research. I am doing that as well with my high priced coaching program and my low cost books. Thank you for reading and commenting Alyssa.

Alisha Robinson - January 9, 2013

Loved this article, full of some really great information thank you!
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    Julia - January 9, 2013

    Thank you Alisha, I appreciate your positive feedback.

Chef William - January 9, 2013

I really enjoyed reading this but now I’m no longer sure what business I am in, with regards to making a few dollars. Notice I didn’t say get rich, I read yesterdays blog also. I kind of combine 1, 2 and 3 with plans to add 6, but as you state, it is a lot of work with a big learning curve. I’ve been at it for a little more that 3 years and I just “found my voice” It has changed from the time we did the 31 day challenge last year to the way I write now. I’m more at home because I have injected some of my personality into my blog posts. Great article.
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    Julia - January 9, 2013

    Some of these business models are interchangeable Chef William, so I wouldn’t be concerned. I’m also combining the various models. One article I saw had a map of high/low income models and it struck me that it was “as above/so below.” Meaning all the models at the top were the same as the bottom with the prices of the products and services differentiating them. I love your articles, I always learn something and find great recipes. And your personality is what we want. Without his personality, Guy Fiery would not be on the Food Network :-).

    Thank you for your continued support.

Cher - January 9, 2013

Hi Julia, this is a great post/article, I wish I had seen something like this when I started, it is clear and easy to understand. I think Internet Marketing is like learning a foreign language, it’s good to see it put clearly.
Best Wishes
Cher 🙂
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    Julia - January 9, 2013

    Well, keep in mind Cher that I write for teenagers and twenty-somethings, most in the at-risk category. It has to be simply stated or they wouldn’t read it.

    Thank you for reading and leaving a comment.

Liz - January 9, 2013

Good overview. I hadn’t really broken down high vs. low traffic models before. Thought provoking – thank you!
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    Julia - January 9, 2013

    Thank you for your comment Liz. I found it thought provoking myself. I had to re-examine my own ideas about business models.

Retha Groenewald - January 9, 2013

Great post. Your book is going to be very interesting. I am sure you have seen it already but if not – There is a letter R missing in your third paragraph of Blogging.
Retha Groenewald recently posted…The Woman in room 2My Profile

    Julia - January 9, 2013

    Thank you for your kind words Retha. No, I missed that R. Even did spell check and grammar check. I’ll fix it right now.

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