Let’s get the definitions out of the way quickly so we can get to the actual list. The term “Business model” describes the framework that describes how an organization creates, delivers, and captures value. This includes target customers, value proposition, revenue streams, cost structure… “Business Model” is both an overhyped and over-used phrase, but defining one for one’s own business is a very helpful theoretical exercise (as long as the delivery behind it is rock-solid).
That definition of exercise becomes much easier when entrepreneurs understand that no idea is truly unique (we’ve been doing capitalism for a long time!). Key archetypes exist, and building on them can greatly help accelerate a business’ success. It is only once a concept has been mastered that it can be deconstructed to create something unique.
In this article, I introduce 85 business models that entrepreneurs should know about. From traditional models like the brick-and-mortar store to more innovative options like subscription-based models and peer-to-peer platforms, we’ll cover all the bases. By the end of this article, you’ll have a better understanding of which business model is the right choice for your company, and how to implement it effectively.
Pick what you want: the customer can select one, many, or all parts of a specific product or service. The customer enjoys the ability to have their needs better served while the company can learn more about their habits and preferences. This is especially useful if variable costs are low (as it is for digital offerings).
Control of the purchase is given over to the customer.
Examples: Skillshare, EdX, Hinge
Additional charge for extra: the main offer is priced lower than the market average, while numerous non-mandatory extras bring in a sizeable part of the total profits. Even though customers often end up paying more than they had originally planned to, they benefit from being able to adapt their purchases to their immediate needs.
Variable offer and low initial price.
If it’s free, you’re the product: the company offers a cheap or free product and subsidizes it by offering space for advertisers seeking to reach new customers. The customer benefits from a cheap product while the advertisers are able to target potential buyers. Not to be confused with “Freemium” (see below).
Examples: Google, Facebook
I make money when you make money: the company helps its partners make sales, usually getting a fixed fee or a percentage in the process. This is beneficial to said partners as they can benefit from extra reach or access to resources without over-relying on capital expenditure.
Easily create a nice side business.
Examples: Pinterest, influencers, MLMs
Convert competitors’ strengths to weaknesses: it is possible to gain a large customer base by actively doing the opposite of what other players in the industry are doing. This allows the company to attract customers that are potentially un-served by existing offers.
Product or service radically different from the industry standard.
Examples: BodyShop, Cirque du Soleil, Basecamp
Going once, twice… sold: an offer, whether it is a service or a product, is sold to the highest bidder. By applying this model, companies are able to sell at the highest acceptable price (given communication was broad enough), while the customer is able to match the offer to his or her own view of the product’s value.
Customers never pay more than they want.
Examples: eBay, Elance, Catawiki, Google (again)
No human interaction: as we automate more and more tasks, it has become possible to sell and purchase goods and services without ever interacting with a human. This automation has tremendous potential in reducing costs for companies and allowing for a wider flexibility to serve final customers.
Flexible and time-saving shopping.
Examples: All automated convenience stores
The razor is cheap, the blades are expensive: while the offer’s starting price is cheap (or even free), the products or services needed to extract value from it are expensive and sold at high margins. In fact, the initial offering is often financed by later purchases. This business model is usually used together with “Lock-In” to better bind customers to the initial product.
Cheap initial product with expensive necessary additions.
Examples: Gillette (after which the model is named), Nespresso
Tit for tat: exchange of goods or services for other goods or services without using money. The offers exchanged generally do not have a direct connection with each other and are likely to be valued differently by each party (ex: the Russians once traded an entire navy for some soda).
The customer gains more than they feel they give.
Examples: Aklamio, Procter & Gamble
Make more with less: a company makes one of its existing products or services using the minimum amount of parts to provide the core task the product or service was designed for. It is especially useful for manufacturing and borrows from the “bottom of the pyramid business model” as the new offering is often best suited for developing nations or lower ends of the market.
Cheaper products/services.
Examples: Arvind, Zendesk
Target customers at the base of the earning pyramid: a large part of the world is still at the bottom of the earning pyramid, especially in developing countries (though this is rapidly changing). By creating an offer that targets them, a company makes small profits per product sold but is able to sell it in incredibly high numbers. An added bonus is the possibility of establishing the company within rapidly developing places to lock in future customers.
Offer products that cater to the needs of this specific population.
Examples: Walmart, Lidl (though that is changing for both)
All you need in one box: make purchasing simple and more complete by packaging related goods/services together. The customer gets more for their money while the company is able to better manage its stock and supply chain. This often has better margins as customers get worse at assessing the value of many products together (psychology, baby!).
A handful of similar products at a price lower than their addition.
Examples: Apple, John Lewis
Doing good: providing an offer that values ethics over profits. Customers will find a possibility of self-actualization through the product, whether they seek to serve the environment, the company’s local ecosystem, or humanity in general.
Ethical/sustainable products.
Examples: Lush, serengetee (now sadly gone)… and countless others worthy of a dollar
1+1 = 3: Two (or more) companies partner to create a unique offer. The consumer benefits from the combined expertise, and both companies gain access to a new market.
Examples: H&M, F1 & Louis Vuitton
What do you think?: Prior to the launch of a product, potential customers can collectively define future retail price based on perceived value
Customers can have a say in the value they see in an offer.
Examples: N/A
If one million people invest a dollar, you get one million dollars: a project is financed by a group of untraditional investors (usually the general public). If a pre-defined funding point is reached, the project goes ahead, and the investors get project-specific rewards. These rewards are usually proportional to the amounts invested.
Customers get to participate in things they’re passionate about and are able to shape their creations.
Examples: GoFundMe, Kickstarter
Outsourcing to the crowd: information or input related to a task or project is generated by enlisting the services of a large number of people, either paid or unpaid, typically via the Internet. Actors are generally offered a small reward for their contribution.
Chance to participate in the creation process of a value brand, while satisfying entrepreneurial wishes.
Examples: Volition Beauty, PepsiCo
The curator knows best: a curator offers products or services to customers, based on previously acquired knowledge of the customer base and/or personalization. Data is particularly important but not mandatory. This is generally a high-margin business but difficult to scale as automation would beat the purpose. This model is fast disappearing due to progress in machine learning, but a human touch will always have some value.
Products/services tailored to the consumer’s individual needs.
Examples: StitchFix, Prose
Incentives for long-lasting fidelity: Customers are given rewards by a company (monetary or others) if they continue to make their purchases from said company. This ensures that customers remain bound to the company, helping ensure future revenues.
Discounted goods or gifts push the customer to come back.
Examples: Sephora, Starbucks
Making use of what you know: Value is created by collecting a processing customer data for either internal use or sale to a third party. Internal use includes personalization and/or prediction (now known as AI, but it has a long pre-2020s history). Note that new laws have made this business model more regulated.
Look at ChatGPT. No really, look at it. How cool is it?! That’s the value proposition.
Examples: StitchFix, OpenAI
Making the material immaterial: existing physical offers are transformed into digital versions of themselves. As such, they can be shared and reproduced much faster, at a much lower cost.
Drastically reduced purchasing efforts.
Examples: Dropbox, Netflix, Charity Water
Skipping the middleman: Products are sold directly from the manufacturer to the customers, without going through intermediaries. The company thus saves retailing costs (or any other cost associated with the middleman). These savings can be passed on to the customer. This model allows the company to control end-to-end processes while retaining a connection to its customers.
Examples: AliExpress
Killing two birds with one stone: offers from an external business are linked to the existing offer. This requires little extra costs, while more potential customer needs can be satisfied and additional revenue generated, as relatively few changes to existing infrastructure and assets are needed.
Customers who know the business will know they’re not taking a risk with a new product.
Examples: Ikea
The right price at the right time: the price for an offer changes depending on a variety of criteria (customer, time of day, weather…). This allows the company to charge a more exact fee to fit the value the customer has attached to the offering.
Prices are adapted to what the customer is willing to pay.
Examples: Uber, Amazon
Online business: offers are sold through a web portal only. This removes most of the costs associated with physically selling a product. Customers can acquire a product at any time and in any place, while the company is able to reduce costs, as well as integrate its sales and distribution processes with other digital processes within the company.
Examples: Glossier, Fnac-Darty, Asos/Boohoo/Pretty Little Things
Sell emotions, not products: The customer experience surrounding the purchase of an offer overshadows the offer itself, hence increasing its perceived value. As a result, the company experiences higher demand and can increase its prices dramatically. The experience offered must fit closely with the narrative developed by the brand.
Experience rather than mere functionality.
Examples: Louis Vuitton, Harley Davidson, Lamborghini, RedBull
Multiply competencies outside your core business: internally developed expertise, as well as any other high-value assets, are offered to other companies who could benefit from it. This allows the company to produce revenues from unused resources, thus diversifying revenue streams and enhancing the core value proposition.
Ability to use know-how or other resources.
Examples: AWS, BASF
Unlimited consumption at a fixed price: a specific price is asked for an offer, regardless of the use the customer makes of it. The company is thus able to better predict income (though demand is never a given), while the customer is able to manage expenses.
Cost-controlled unlimited consumption.
Examples: Netflix, Spotify
We’re all family: while the franchisor owns its brand, processes, and IP, it is able to lend them to independent entrepreneurs. The company thus limits its risks and is able to expand quickly, while the franchisee is able to benefit from an already well-known brand and the availability of know-how and support.
Access to a proven business model for franchisees as well as some expertise, meaning lower risks.
Examples: Body Shop, Sephora, Domino’s Pizza
Choosing between free basics and paid premium versions: basic services are provided free of charge while more advanced features must be paid for. This type of model typically occurs on the internet. The free offer attracts a high volume of customers, while revenue is generated by the (generally smaller) volume of premium customers.
The basic version is free of charge while the premium version is not.
Examples: Dropbox, Skype, Spotify, Hootsuite
Make your own league: By strongly specializing in one aspect of its value chain, a company is able to offer an impossible-to-beat value proposition. It is therefore able to sell its expertise to competitors who seek to copy its aptitudes.
An expertise related to the company’s primary model.
Examples: PayPal, Amazon, Communication agencies
Bring a friend: A company offers an increasingly reduced price when larger amounts of people purchase the product as a group. The customers get a cheaper product, while the company gains new customers through network effects.
Lower product prices the more people are brought to the sale.
Examples: Zola, Pinduoduo
You break it, we replace it: Similar to the “trash to cash” model, this model allows customers to systematically replace defective products. In exchange, it can collect those products and potentially sell them a second time, sell them for scraps, scavenge parts… As for the customers, they are more likely to stay loyal. This model is a great addition to the Razor & Blade model and has many parallels to guaranteed availability.
A product that will be replaced systematically.
Examples: Timberland, IQOS
The offer always works (T&C may apply): The providing company ensures that a product or service previously sold is always online. This becomes central to the business and impacts every part of the value chain.
Ensuring almost 0 downtime for machines and equipment.
Examples: Hilti, Otis
Seeking alternative sources: The business’ survival no longer directly depends on the customer. Revenues are instead provided by a third party who cross-finances the offer proposed to customers (generally making it cheaper). The most common use of this model is through advertisement: the customers so attracted are of value to the advertisers who then fund the offering.
Cheaper products as they are cross-financed.
Examples: Spotify, JCDecaux, Youtube
Do-it-yourself: The company sells ingredients that need to be assembled by the customer in order to create the finished product. The company reduces costs by exporting part of the value-creation process, while the customer is able to create something that will fit their needs.
Customers can make products as they see fit.
Examples: Mwamem, Aroma-zone
Brand squared: part of an offering originates from a specific supplier. Because of the supplier’s expertise/image/credentials, the offer is advertised as containing the “ingredient”. The positive association with the ingredient brand is projected onto the product and increases its attractiveness.
A more desirable product.
Examples: Intel, Starbucks
Involvement all the way down the line: An integrator has control over most of its offerings’ value creation process, including all resources and capabilities in terms of value creation. Efficiency gains, economies of scope and reduced dependency on suppliers result in a decrease in costs. These savings can then be passed on to customers. The company however loses out on specialisation and may incur numerous complexity costs.
By managing most operations internally, the company can pass savings on to customers.
Examples: Zara, Intel, Tesla
Benefiting from specialized know-how: the company provides a single value-adding offer to other companies’ value chains, across a variety of industries. The company benefits from economies of scale, while customers benefit from their expertise.
The company is able to serve many customer segments across industries.
Examples: AWS, PayPal
Pay for temporary right to use: customers rent the product instead of outright buying it. This model differs from shared use because the company receives the product back after each use. The company is able to get more regular revenues which last during the entire product life-cycle, while the customer enjoys the product for cheaper than it would have cost to purchase it. In fact, both parties benefit from greater efficiency in product utilization, given that time of non-usage, which unnecessarily ties capital down, is reduced.
The customer is able to use products they might not be able to otherwise, freeing up capital.
Examples: Rent the Runway, Blockbuster
Commercializing intellectual property: the company develops patents and other IP resources, which it then offers to other actors. As such, realization costs are low (if not 0), but the assets are nevertheless a source of revenue. Licensing gives a company the freedom to focus on R&D and allows the provision to third parties of knowledge that could otherwise be under-utilized.
An already recognized product.
Examples: Coty, L’Oréal
Don’t you want to be more like me?: A lifestyle brand is a brand that attempts to embody the values, aspirations, interests, attitudes, or opinions of a group or a culture for marketing purposes. Lifestyle brands seek to inspire, guide, and motivate people, with the goal of their products contributing to the definition of the consumer’s way of life.
An ability to be inspired, guided, and motivated through products and services.
Examples: Goop, Harley Davidson, Red Bull, M&S
Forcing loyalty with high switching costs: customers are “forced” to keep using a company’s offer because of high technological, economic, or legal switching costs. This means that most customers will not be able to / want to change to another provider. This is generally generated through product or service interdependency.
Low value for customers.
Examples: Nespresso, Microsoft, Canon, Kindle
Reverse Pareto: rather than concentrating on one offer that would make the bulk of its sales, a company chooses to offer a wide variety of niche products that attract a large number of customers (though they neither demand high volumes nor high margins individually). If a wide variety of these products is offered in sufficient amounts, the profits from the resulting accumulated small sales can add up to a significant amount.
Small quantities of a large number of products are sold, allowing for more choices for the customer.
Examples: Youtube, Itunes
Off-the-rack individualism: The company offers semi-personalized products without losing any efficiency thanks to an optimized value chain. As a result, individual customer needs can be met under mass production conditions and at competitive prices.
Customization according to customer needs for the same price as mass products.
Examples: Lenovo, Subway
Learn and consume at the same time: eliminate the boundary between media and commerce by offering products that are shown within media. This allows companies to insert their product organically, and customers to better understand them and see them at work.
Purchase products as seen in media.
Examples: iQiyi, Tasty
Sell to the seller who sells to the seller who sells to…: MLM is a strategy some direct sales companies use to encourage existing distributors to recruit new distributors who are paid a percentage of their recruits’ sales. Distributors also make money through direct sales of products to customers. The ethics of this business model is still under discussion.
Offers participants the opportunity to earn income both through direct sales and by recruiting new sellers.
Examples: Avon, Younique, Amway
Selling a product before having paid for it: the customer pays for a product immediately, while the company has negotiated generous terms with suppliers, which allows it to have more cash in hand at any given time. This results in increased liquidity that can be used to amortize debts or fund investments.
Increased liquidity for the seller (few benefits for the buyer).
Examples: Groupon, Amazon
Whatever, as long as it’s cheap: the company concentrates on providing the minimum necessary effort a customer is willing to accept for an offer. Said offer is thus a core proposition, with little around it. Cost savings are shared with the customer, ensuring a larger customer base, but lower margins.
The usual value proposition is reduced to its minimum, and savings are passed on to customers.
Examples: Aldi, Vaseline
Get it as soon as you want it: This model fulfills consumer demand on the basis of immediate access to goods and services. It is a business model driven mostly by technology
Products and services are available at all times.
Examples: GlamSquad, Stylelisted
Buy one / Give one: One for one is a social entrepreneurship business model in which one needed item is given away for each item purchased, appealing to socially conscious consumers.
Combine consumer purchasing with social impact.
Examples: Warby Parker, TOMS Shoes
Leverage collaborative value creation: Open business is an approach to an enterprise that draws on ideas from openness movements like free software, open source, open content, and open tools and standards. The approach places value on transparency, stakeholder inclusion, and accountability. Collaboration with partners in the ecosystem becomes a central source of value creation, thus benefiting all actors.
Leverage transparency, collaboration, and stakeholder inclusion to drive value creation. By embracing open-source principles, it fosters innovation through collective input and shared resources, benefiting all ecosystem participants.
Examples: Red Hat
Working together to create a free solution: the core of the offer (usually source code) is made freely available to anyone wishing to use it. As such, it can be contributed to (encouraged), or simply used as a customer would. A company can earn revenues by providing complementary services, such as consulting and support. However, it usually benefits more from becoming an industry standard, and the image boost that comes with it.
Freely available products or services created by collective brainpower.
Examples: Firefox, Wikipedia
Efficiency within the value chain: the company focuses on its strength within the value chain, while it outsources and coordinates those aspects that can be optimized by an external actor. It is thus able to reduce costs and benefits from the supplier’s expertise. Additionally, the focus on core competencies enhances performance.
Maximize operational efficiency by focusing on core competencies while outsourcing non-core activities to specialized partners. This approach reduces costs, leverages the supplier’s expertise, and enhances overall performance.
Examples: Nike
Pay as you go: The customer pays on the basis of what he or she effectively consumes, whether that is a product or a service. This can be in units of time or distance, for example. The customer is thus able to be more flexible about his or her consumption, though it may be priced higher than if the offer had been purchased outright.
Examples: Lime, AWS
Whatever it’s worth to you: clients pay the amount they want for an offer, sometimes going as low as zero should they choose to do so. A minimum amount may be set in order to avoid unethical behaviour a guarantee some revenue. Alternatively, a suggested price may be indicated by the company in order to guide the client. The client is thus able to control his other expenses, while the company is able to attract a large amount of customers while benefiting from publicity.
The customer decides how much to pay for a product or service, hence keeping control over their assets.
Examples: Radiohead, BrandAlley
Dealing from person to person: individuals interact to buy and sell goods and services directly to and from each other (or produce goods and services together). Though this model is by nature decentralized, an organizing company can offer a meeting point and communication service that connects these individuals. The company is then able to earn a fee through this service.
Transaction between individuals, similar to commercial interactions, with added social benefits and increased marginal utility.
Examples: PAP, eBay
Basing fees on results: This model is similar to pay-per-use insofar as the value of the offer is not based on its physical value. Instead of a fee per use, it is here instead tied to the outcome of the offer utilization. This leads the company to develop special expertise to ensure good performance, which benefits the client. Performance-based contractors are often strongly integrated into the value-creation process of their customers.
A precise output is paid a specified amount, allowing customers to control their costs.
Examples: Rolls-Royce, Government agencies
One step beyond mass customization: the rise of data, as well as digitalization and optimized processes, allows us to offer a different product to different customers in a simultaneous manner. The company is hence able to acquire a loyal following while the customer is pleased that his or her tastes are taken into account.
Maximum value from the product for a specific customer.
Examples: Spotify, Netflix, Asos
Sell next to your competitor: By aggregating a large number of companies, a platform is able to attract a large number of customers, hence creating an ever-increasing network effect that benefits all parties.
A wide offering.
Examples: FeelUnique, BeautyLish
Pay now, use later: Several units of a good or service are purchased in advance. The validity of these units can be limited in time or not.
Customers can purchase multiple units of a good or service upfront, often at a discount, providing them with convenience and potential savings. For the business, it ensures cash flow and customer retention
Examples: AWS, WeWork
Own brand strategy: a product is manufactured or packaged for sale under the name of the retailer rather than that of the manufacturer. The same product or service is often sold to a variety of brands. In this way, various customer segments can be satisfied with the same product.
The product is sold by a different company than that which manufactured it.
Examples: Schwartz, Tang Frère
Finding all you need at the one-stop shop: Every needed products and services for specific offers are bundled to a specific point of contact. As such, customers can benefit from relevant expertise, while the company adds revenue streams, locks customers in, and gain close contact with its customers, hence creating a virtuous circle.
Single source for a specific offer so customers can concentrate on their core activities.
Examples: Amazon, Apple
Come will they and it build: The value chain is decentralized and made flexible in order to become more customer-focused. This generally means higher costs but higher perceived customer value, leading to higher margins.
The customer is king.
Examples: Zara, Toyota
The customer knows the offer is good: the company is able to ensure the quality of its offering is on par with consumer expectations, hence improving its image and attracting potential new customers.
A promise to customers that the offer will not meet certain expectations.
Examples: Label AB, Label Rouge
Win-win with symbiosis: Revenues are shared with all who participated in the ecosystem’s health, be they suppliers, or even competitors. This is usually because the presence of more than one actor is beneficial to all the others through a higher potential customer base or higher customer satisfaction.
All participants in the ecosystem share the revenue.
Examples: NFL, Medium, Spotify
Going twice, Going once…: Roles of sellers and buyers are reversed. Sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid.
Examples: N/A
Taking lessons from competitors: this pattern refers to the reproduction of another company’s product following a detailed examination of its construction or composition. As this system requires little investment in research or development, the ensuing products can be offered at a lower price than the original one.
A product that is either as good as the original or appeals to a new customer segment.
Examples: Pelikan, Denner
Learning from good-enough solutions: Simple and cheap offers developed for emerging markets are imported and sold in developed economies. These offers are often innovative as they were created in a world largely untethered by complex infrastructures.
Offer innovative solutions to customers.
Examples: Nokia, TVS
The opposite of Gillette: Offer low-margin offers tied to an original product at a very low price to encourage the sale of the much higher-margin original product. This means customers have less resentment towards the company while the company enjoys high margins.
Enjoyment of a product once the initial payment has been made.
Examples: Amazon, Apple
Take from the rich, give to the poor: an offer is priced differently depending on the buyer’s income so that most of the profits are made from richer customers, who effectively cross-finance the offer for poorer customers. Similarly to the Bottom of the Pyramid model, this way of doing things generates little initial profits but creates economies of scale that other providers cannot achieve. Additionally, it has a positive effect on the company’s image and recruits potential customers for the future.
Offer a product the disadvantaged might not otherwise be able to afford, while richer customers have a better conscience.
Examples: Warby Parker, TOMS Shoes
“Hurry up, we’re almost out of stock”: Producing a few products infuses it with rarity in a world where everything is limitless. This enhances the company’s image and increases revenue due to perceived value. This however means missing out on economies of scale. Note that scarcity can be in product units, but also in time.
A product that gains in perceived value due to rarity and demand.
Examples: Pat McGrath, Starbucks, Booking.com
Putting the customer to work: the customer is (knowingly or unknowingly) tasked with producing part of an offer’s value creation process. In exchange, the company is likely to reduce the offer’s price. This is particularly suited for process steps that add relatively little perceived value for the customer, but in fact, incur high costs. Customers are able to save time, as is the company: as in some cases the customer is able to execute a value-adding step more quickly than the company.
Lower price, as well as time savings.
Examples: Ikea, McDonalds
Timeshare makes for efficient usage: Assets are shared by a group of owners. The assets linked to this type of model are typically capital-intensive, yet required on a regular basis (though not consistently). The customers are able to own and fully utilize a needed product, while the company is able to make a sale it might not otherwise have been able to make.
Ability to purchase products that one may not be able to otherwise afford, and more efficient use of said product.
Examples: HomeBuy, Blablacar, OuiCar
Piggybacking: a company integrates an already existing commercial space instead of creating one from scratch. The hosts can benefit from a larger number of customers and a constant revenue in the form of rent, while the hosted company gains access to cheaper resources such as space, location, or workforce.
Extra products and offers in the same convenient space.
Examples: Starbucks, Superdrug
Put the community to use: Customers use media to share and purchase products, abandoning entirely the confines of the brand control environment. The company benefits from potential virality and network effects while customers is able to receive targeted messages tailored to their interests.
Lower prices thanks to a social purchase component.
Examples: Weishang, Mogujie, L’Oréal
Buying a season ticket: the customer gains access to a product or a service by paying a regular fee (usually monthly or yearly). The company is thus able to generate a steady income while customers benefit from low usage costs and consistent availability.
Customers save time, money, and energy. The price of the offer is often lower than that of a repeat purchase.
Examples: HelloFresh
Large selection and small prices under one roof: a large number of products (or services) are offered under the same roof by a company. This attracts a large customer base, which keeps the prices generally low. The price is also kept low thanks to economies of scales.
Sell a large variety of products under one roof for a low price..
Examples: Carrefour, Sephora
More for More: By providing the best possible products, along with the best possible services and branding, the company is able to target the richest customers. As systematic differentiation is key, the costs are high but are met by a very high margin due to the small customer pool.
Great service… and feel like a Star
Examples: Lamborghini, Rolex
Turning old rubbish into new cash: used products are collected by the company and either sold for a profit or transformed into new products. This is generally a profitable endeavor, as collection costs are generally extremely low. In addition to removing some resource costs, it also assuages some customers’ consciences with regard to their environmental impact.
Goods that give a good conscience.
Examples: GameStop, H&M
Attracting indirect network effects: similar to platforms, a two-sided market model operates on the basis of connecting and serving more than one group of customers. The value of the platform increases as more groups or individual members of each group use it. The two sides are frequently different types of entities: businesses on one side and NGOs on the other, for example.
Network effects for both providers and consumers.
Examples: Facebook, Groupon
Give the client more choice: unbundling is the idea of removing the ties between products to offer them as stand-alone rather than as part of a package.
The ability to not be tied down by un-extracted value.
Examples: Netflix, Google
This only works here: Unique format is a form of the lock-in business model, which has been pushed to render switching to another product impossible. Instances are rare, and legal ramifications are possible.
A product that works perfectly with specific products and services, creating an entire ecosystem.
Examples: IoS
The customer is an inventive entrepreneur: the customer is the designer behind an offer (not to be confused with the manufacturer). The company provided consumers with all the necessary support and produced the product once designed. As such, it is able to benefit from customer creativity, while the customer is able to benefit from pre-established infrastructure. Revenue can be earned by design, or by sale.
Customers realize their entrepreneurial dreams without having to create any infrastructure
Examples: TeeSpring, Lego
Larger waves mean lower prices: The price of an offer changes based on a specific variable. This is very similar to dynamic pricing, but less specialized and reliant on algorithms. It is better understood and better for marketing purposes.
Help customers understand why they are paying the price they are paying.
Examples: Alaskan Airlines, Asigra
This is a long read, but hopefully, budding entrepreneurs will learn something new; there is an infinity of ways to make money. What matters is figuring out the right business model for one’s business… and for oneself.
Good luck out there.