The 10 types of Business Model

Also known as the “economic model”, the business model describes the means by which a company plans to generate earnings. Among the types of existing business models, thanks to a marketing study, each company will find the solution best suited to its activities in order to transform its project into a success. Here are ten of them.

  • Business Model Private Sale/Flash Sale

In e-commerce, the private sale business model is a process by which an intermediary reserves a stock of goods that an industrialist wishes to sell. The intermediary does not buy the products directly, but puts them on sale on his site. He announces the sale 2 or 3 days before the publication of the offer and the products will only be put online for 3 to 4 days. The principle of this economic model is therefore to create a virtual store for the products of a brand and to sell as much stock as possible in a very short time.

Also limited in time, the flash sale business model consists of selling products from an end of stock or stimulating the sale of a product when it is launched. Just like the private sale model, potential customers will be informed of the period during which the exceptional offer will take place.

  • insurance business model

Today, the new digital players working in the insurance sector are better able to meet the demands of policyholders with regard to risk management. Thus, traditional distribution channels tend to lose up to 25% of their profits. The parade involves new digital business models that optimize customer engagement.

Working in partnership with new players in the field is therefore one of the ways to convert competition into opportunity. This new insurance business model will allow traditional establishments to offer a new offer in line with customer demands and to assess new risks in order to better respond to them.

Another good way for insurance companies can also be to offer new products adapted to future needs to cover new risks.

Another solution for modernizing the business model of insurers is to become a privileged trusted partner for customers: personalized advice, extra services for companies and families, etc.

  • e-commerce business model

A company that wants to acquire customers and boost its turnover in e-commerce must put in place an effective business model. Starting by analyzing the profile of its potential customers and studying the best way to seduce them with its products and services. Its merchant site must also have a very attractive design. In other words, the home page of the site must include a call to action and offer easy and clear navigation. And the company must ensure that the content of its site is optimized by a good SEO tool. It can also improve sales by giving consumers the opportunity to share their experience of purchases made on the site with their relatives and friends on social networks. Finally, it is essential for the company to have a mobile version of its e-commerce site. Learn more about the e-commerce business model.

  • Business Model MLM/Tupperware

The Business Model MLM or Multi-Level Marketing, translated by multi-level selling or step selling, is a door-to-door or door-to-door sales technique for an industrialist’s products, as part of a loyalty, sponsorship and ambassadors. It is therefore the latter who become the sellers of the brand’s products in exchange for remuneration (in kind or financial). The recruitment of ambassadors or sellers is the key to MLM since this economic model is based on the “snowball” effect according to which a convinced person can convince 5 others and so on. It is a business model used by Tupperware, a major American firm specializing in the production of plastic boxes and kitchen utensils.

  • Business Model Referral Fee

The business referral commission business model is a simple and effective solution for developing a company’s turnover. It consists of a contract by which a business introducer will have the mission of seeking buyers, suppliers or possible potential partners on behalf of a company. As a matchmaker, the business bearer is therefore obliged to deploy all means and in particular to use his address book, so that the connection between the two parties takes place. However, it will not be held responsible for the failure of the case between the company and its client.

  • Business Model Auction

The auction business model consists of selling a product or service by letting customers bid for a limited period. The company should preferably set a floor price to start the auction. At the end of the sale period, the buyer who has offered the highest price will win. This economic model must also allow consumers in a hurry to make an immediate purchase. In this case, the company must determine in advance a fixed price for the product or service offered.

  • Low Cost Business Model

The low-cost business model consists of attracting consumers by offering basic products at very attractive prices. To generate maximum profits and reduce production costs, the offer must include the essential minimum. In other words, if the consumer wishes to benefit from additional options, they will be charged for them. This economic model then allows a company to sell a maximum of services and products and to maintain its leading position in a competitive market.

  • Business Model Freemium

Freemium is a widely used business model on the internet. It assumes that a free service must be offered to potential buyers to encourage them to benefit from an additional paid service called “premium”. It is then a question of finding paid functionalities which will hinder the use of a service when they are no longer free. For example, a well-known online music service offers its users to listen to music playlists online, interspersing each piece with advertisements. To remove advertisements during listening, users are invited to subscribe to the paid offer.

  • Cashback business model

The cashback business model is also widely used in e-commerce. It allows a buyer to acquire a product from a partner seller of the merchant site he has visited. In return, he will receive from the site a refund of 0.5% to 5% of the purchase price. The cashback business model is mainly used by large online retailers who collaborate with many brands or e-commerce sites.

  • Affiliate Business Model

The affiliation business model offers the same principle as the business owner’s economic model. The affiliate offers its services to the affiliator, that is to say the supplier of the products, in order to direct potential buyers of the products to the site or the blog of the affiliator. Regarding remuneration, the affiliate can receive his commissions on the sales made, be paid by the number of leads generated, or by click. Of course, if the affiliate does not report anything, he will not be paid.