The internet business model has distinct similarities and distinct differences from the non-digital business model. Nearly any non-digital business model can be translated to an internet business model.
An auction business model is translated to online auctions in the form of eBay and other less well-known sites. The same kinds of strategies apply with online auctions as in non-digital auctions, the auctioneers make a commission from the products sold and the transactions are taken care of by the auctioneers as well.
Another model taken from a non-digital source is multi-level marketing models, better known as pyramid schemes. In this model, a hierarchy is formed when salespersons bring new salespersons under them in the business.
Someone participating in a multi-level marketing model makes money from those below them in the hierarchy for a predetermined number of levels as well as their own efforts. Unfortunately, the downfall to multi-level marketing models is that they are commonly associated with internet scams where you are required to pay so much a month to receive the services offered by the company in question.
Multi-level marketing models sell products to make the commission to keep the business running. Unfortunately, the market has been flooded with scams that there is a lot of skepticism of this kind of internet business model.
The franchise style of non-digital models have translated to affiliate marketing sites where a company hires people to sell their products for them using a proven effective model. So as McDonald’s franchises will give new restaurants the business model to follow, an online business will provide their new franchisees the means to succeed by following a simple system.
A monopolistic internet business model can be seen with a provider like Amazon who has basically dominated the internet book selling business. The great and, in cases of competition, unfortunate thing about internet marketing is there are no international laws against internet monopolies. The consumers who will avoid a company because they seem more like a monopoly and want to avoid ‘feeding the machine’ so to speak largely regulate monopolies.
A huge internet business model emerging is the professional open-source model. This model offers a free service, such as a Spyware Bot that works remarkably well for free. Then the company who creates the Spyware Bot also offers an even better product for a marginal fee depending on the degree of protection a user might need.
This type of model can be likened to getting free samples at a grocery store then going back and buying the product because it works well. A downfall of the open-source model is that some of the programs offered in this way allow the user to do illegal things with the programs, such as illegal downloading of music and/or movies. The open-source community on the internet is huge and there is still room for growth by anyone who is in favor of free licensing of products and the free exchange of any and all information.