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7 Proven Business Models For Your Website

Ever wondered what are the most popular online businesses? How do I choose a business and revenue model for my online content? 

Here are listed and explained seven business models and monetization strategies to ensure that you are choosing the right one(s) for your website or online business.

E-business models and monetization strategies

When you start an online business or you’re interested in acquiring one, you have to carefully evaluate your options to find the one that best fits your skills, experience, time requirement and risk appetite.

To help you successfully go through this decisive phase, we have detailed the seven business models and monetization strategies that come being profitable methods.

2Affiliate Marketing
4Lead Generation

1. Advertising

> Producing content for AdSense or Direct Ads

Business model: The web advertising model is one of the simplest and most popular online business models. It is the internet’s digital extension of the traditional media broadcast model.

Websites applying such a model provide content, usually for free, interspersed with advertising messages in the form of banner ads or other ad placements.

Webmasters of these sites have a range of advertising payout models to adopt, including:

  • Pay-Per-Click: advertising revenue is generated by users clicking on the web advertisement
  • Pay-Per-Lead: advertising revenue is generated when users click and sign up through a web advertisement
  • Pay-Per-Action: advertising revenue is generated when users click and purchase something through a web advertisement (the site owner receives an agreed % commission of the sale value)
  • Pay-Per-Impression: advertising revenue is generated by users viewing the web advertisement. This is usually paid per thousand impressions (CPM).

Monetisation: Content sites come in many forms including blogs, forums, news and informational sites etc.

There are two main options for monetising content via advertising:

  1. through an automated advert delivery platform;
  2. via direct adverts (Google AdSense is by far the most common ad-delivery network and generally speaking is one of the best paying for the average webmaster);
  3. Advertising relationships directly with relevant product/service sellers: This more hands-on approach requires some time investment from the site owner but often translates into improved advertising terms.

Metrics: Advertising businesses should focus on the volume of traffic that the site has, the demographic of visitors and usually the niche it is in.

High-quality content sites with a strong traffic profile are typically very attractive as they offer relatively secure income with low maintenance requirements.

Simple monetisation model 
Very low maintenance 

⛔ Earnings are highly sensitive to traffic

⛔ Need continual supply of fresh content

2. Affiliate Marketing

> Selling other’s products online

Business model: Websites exclusively selling other suppliers’ products and services in exchange for a commission payment that is an agreed percentage of each sale.

Affiliate marketers are effectively independent sales entities that are paid on a performance basis (i.e. when an actual sale is made). Websites use tracking codes which identify who referred the sale to them.

Monetisation: Some of the major affiliate programs include ClickBank, Amazon and Commission Junction. In some cases affiliate marketers can receive 50% of a sale (especially with digital products) but this usually ranges from anywhere between 5% to 75% depending on the product and the niche. There are often higher tiers for those who send a high volume of sales.

Metrics: Successful affiliate marketing sites are ones that have become an authority product referrer, usually through building high-quality content around the product or the service being sold.

High margin
No product/service creation required

Relatively low risk

⛔ Careful product selection required

⛔ Takes time to build authority
⛔ Reliant on third parties

3. E-Commerce

> Selling your own products online

Business model: By definition, e-commerce is buying and selling products and services via internet.

E-commerce has been a dominant online business model for the last decade and is one of, if not the most common e-business model. There are different types of e-commerce sites depending on the approach to inventory and distribution taken.

  • Store approach: This approach requires the site owner to hold inventory, ship the product and effectively take control of the entire supply chain.
  • Dropship approach: Generally favoured as physical warehousing and responsibilities for logistics can for many outweigh the natural benefits of owning an online business. Recently becoming more common is the dropship model where the e-commerce store acts as an online platform for selling goods but outsources the storage and shipping of the products to the original supplier. Naturally, there is some margin reduction in a dropship model but it also cuts out the logistical burden of running a retail store and allows the owner to focus on internet marketing which is typically their core competence.
  • Brokerage model: Somewhere in between those two is the brokerage model which brings buyers and sellers together, facilitating but not actively participating in the transaction. Marketplaces like eBay and Fiverr are good examples of this.

Metrics: E-commerce businesses should focus on product margins, owner time involvement as well as traffic sources, trends and sustainability.

Easy to understand for offline investors
Dropshipping = no logical responsibilities

Flexibility as you don’t get with reliance on third parties

⛔ Generally time consuming

⛔ Relatively high costs compared to other models
⛔ Require constant attention

4. Lead Generation

> Selling information to those who need it

Business model: Website used to attract traffic and convert users into leads for a sellable service (e.g. car insurance).

Typically the site owner creates a website of relevant content for the lead-type and then employs an internet marketing strategy to attract traffic to the site. User information is collected (usually through a customer form) and then the lead data is sold to companies interested in marketing to or selling to those collected leads.

Monetisation: The main focus with a lead generation business is establishing a higher revenue-per-lead (RPL) than the total cost-per-lead. Owners of lead generation businesses can arbitrage paid traffic well if their conversion rate and RPL is higher than the CPC of running AdWords (or equivalent). Lead generation businesses can be very high margin (80%+ net margins) and relatively hands-off once established.

Metrics: Lead generation businesses should focus on traffic sources and sustainability, owner time involvement and of course conversion rates for both leads and sales.

Very High margin
Relatively low maintenance

Low barrier to entry compared to offering product / service yourself

⛔ Need to maintain traffic and conversion rates

⛔ Keep updated with relevant content
⛔ Heavily vulnerable to commercial terms of lead buyers

5. Software

> Selling a product that solves a need

Business model: Software businesses often spring up from hobbyists looking to create a relevant product within their niche.

Monetisation: Usually, the developer has created a niche software product and either opted to sell through word of mouth and referrals or to employ affiliates to sell it via an established partner network such as ClickBank. Software businesses can be set up with either one-time or subscription-payment types depending on the nature of the product and the customer base.

Metrics: Software businesses should focus on the marketing strategy, traffic sources, quality and integrity of the software’s source code as well as technical requirements for future upgrades.

High margin and often stable cash flow
Relatively low maintenance

Can employ affiliate model very effectively

⛔ Software updates may require technical experience

⛔ Risk of piracy or copycats
⛔ Customer support can be resource intensive

6. Software-as-a-Service (“SaaS”)

> Leasing a product that solves a need

Business model: Software as a Service or ‘SaaS’ is a website revenue model where users pay a subscription to rent software hosted online instead of purchasing it outright and installing it locally on their computers.

SaaS is at the core of centralized or cloud computing with the aim being that users can run their computer tools as online rented products. All of the processing work and file saving is conducted on the internet with users accessing their tools and files using a web browser.

Users benefit from reduced upfront cost of ownership, quick and easy access with immediate upgrades, no need for additional hardware and often much better technical support as well as customer care.

Monetisation: SaaS businesses are becoming increasingly popular for online acquisition as, like subscription businesses, they typically employ a monthly or quarterly billing model and enjoy a strong amount of recurring income.

Metrics: Saas businesses should focus on the strength of the base, churn, CLV and customer acquisition costs. Often SaaS businesses are backed with a high amount of content marketing to get users into the conversion funnel and onto a subscription.

High level of recurring cash flow
High barriers to entry

Strong margins

⛔ Technical updates associated with the software

⛔ High level of content marketing required
⛔ Need a strong support system in place for customer care

7. Subscription

> Leasing a content offering

Business model: The subscription e-business model is where users are charged a daily, monthly or annual fee to subscribe to a service, commonly a content offering (e.g. Netflix,

A number of these businesses combine free content with premium (i.e. member-only) content, referred to as a “freemium” model. Often converting customers into long-term billing relationships requires time and effective marketing, so many successful subscription models have a well-refined internet marketing strategy and conversion funnel in place.

Monetisation: Subscription businesses are attractive for online acquisitions as they typically employ a monthly or quarterly billing model and therefore enjoy a significant amount of recurring (vs. ‘one-off’) income which is held in high(er) regard.

Metrics: Subscription businesses should focus on the strength of the customer base, churn rate, customer lifetime value (‘CLV’) and the associated customer acquisition costs.

High level of recurring cash flow
Strong margins

High barriers to entry

⛔ Strong marketing and conversion skillset required

⛔ Ongoing customer care / support requirements
⛔ Competitive product required to retain customers

To sum up

Several website revenue models are possible and many can fall into more than one category or be ambiguous with numerous definitions used by different people.

You should carefully evaluate your options to find the one that best fits your skills, experience, time requirement and risk appetite.

Hope the above will help you to decide what is best for you.


Mat is the founder of cashtipsandtricks and has been working in the financial sector in Luxembourg for the past 10 years and brings his insights as an investor and entrepreneur.

Cash Tips and Tricks 2020 - 2021