It can be said that choosing a business model is one of the important conditions to help your brand have a clear direction and develop in the most effective way. So in fact, what is a business model and how many business models are there? Let’s find out together with Sapo.vn in the sharing below.
1. What is the business model?
The business model is what helps the brand to position itself and start entering the market based on the right conditions. This is the basis to ensure the ability to plan appropriately as well as take a longer and more sustainable step in the market.
Setting up the right model is also an important factor to help your brand reduce costs, increase profits and develop comprehensively. Because in fact, products and services are elements that can be easily copied, but the business model is characteristic of each brand.
2. Popular business models today
2.1 Online business model
It can be said that the online business model has been and is an extremely popular model. This is considered a form of business through social networks, websites and online channels, … With online business, you can completely promote your products and services on online channels.
In fact, online business helps sellers optimize a lot of costs as well as not being limited in space and time. Along with the development of technology 4.0, online business is definitely the business model that brings the most potential and opportunities for development.
However, this model also has some limitations that customers often hesitate and consider buying because they can’t see the product directly and have doubts about the actual quality.
Along with that, delays, damage or loss of goods during delivery are also considered limitations of this business model, causing customers to hesitate in purchasing.
See also: Guide to successful online business for beginners
2.2 Affiliate marketing model
This business model is also known as Affiliate concept, this is the model where the business will be done when a customer makes a purchase when clicking on a link.
For example, you are an influencer on social networks, media channels, you can completely use websites, social networks and attach links to buy products in your articles. When a customer buys a product or service, you will receive a commission.
See also: Harmful mistakes when using Affiliate and how to fix it
2.3 E-commerce business model
This business model can take advantage of the Internet, every individual and business can sell and profit from this model. In fact, the e-commerce business model will include:
- B2B (Business To Business) model: This e-commerce business model is understood as a model of providing products and services from one business to another via Internet platforms. Common B2B models can be mentioned as: Alibaba, Amazon, …
- B2C (Business To Consumer) model: This is a business model in which businesses sell to individuals and end consumers on an online platform.
- C2C (Consumer To Consumer) model: This business model represents the activities of buying, selling and exchanging via the Internet between individuals and consumers. Some platforms and websites operating under the C2C model can be mentioned as: Ebay, Cho Tot, Shopee, Sendo, …
2.4 Profit model from accompanying products
One of the prime examples of this model can be mentioned is Apple with its strategy of creating platforms like the App Store and iTunes to sell new apps, songs, and movies at reasonable prices to sell with products. The main ones have quite high prices such as iPhone, iPad, Mac, …
However, in order to use iTunes or the App Store, they must buy key products. This inadvertently makes customers feel trapped in this ecosystem of Apple.
2.5 Franchise business model
For this model, the franchisor will provide the franchisee with a business license, trademark, training materials, etc. The franchisor will be allowed to sell the franchisor’s products and services . Depending on the policy, the franchisee will pay a franchise fee or a percentage of the revenue depending on the agreement.
One of the most successful examples of a franchise business model is McDonald’s, where franchised restaurants account for 93% of the total number of restaurants.
See also: Are you learning about franchising in retail?
3. Notes when choosing a business model
Understanding the potential and size of the market is a factor that helps you understand the number of customers and market segments. From there, make a decision to hit the niche or the main market, while clearly defining the characteristics of your target customers, shaping the important elements of your business model.
Understanding who your competitors are and what they are doing is important to differentiate your products and services in the market. This is the basis for identifying competitive advantages and attracting customers to choose you over other competitors.
Choosing the right distribution channel will determine the revenue and profit of your store. Because in fact, this is a factor for you to bring your products to potential customers as well as increase revenue and profit most effectively for your business.
Cost, revenue, profit
Choosing the right business model needs to depend a lot on the financial potential as well as the brand’s ability to bring in revenue and profit. At this point, you’ll need to list all of your expenses, as well as calculate your potential revenue and profit potential.
This is considered one of the bases for your brand to come up with a clear, appropriate and effective business plan.
The above are important factors about the business model that Sapo wants to share with you, we hope that the above sharing can help you assess the suitability, thereby choosing the most suitable model. .
See also: 9 steps to create the perfect business plan