These days there are many ways of doing business and a bit that has lost its way because entrepreneurs do not have or do not know the necessary tools to create a business nor do they know what business models exist in the world today…
While it is true there is no classification of all business models exist, there are lists that help us visualize at least that is the way to go and experience which can draw conclusions to know which to choose. A business model is like a template which can be implemented in the new company and from it generates a custom business, to put it more clearly, a specific model tells us the way they do business to generate income by following a specific route.
Some types of business model with its advantages and disadvantages:
This business is a format in which a company or small business is related to a larger one to offer their products or services for a percentage of sales gains, although there is no control of it.
Advantages: No need a product or service itself, you just need to use techniques of affiliate marketing or referral marketing to attract customers.
Disadvantages: The payment requirements are very strict and it is necessary to reach a minimum amount each month to receive a payment in addition to expect . time set for the product warranty
Actually a franchise is not a model itself, what you do is use the successful business model of another company already constituted. It is an agreement between the franchisor and the franchisee to exploit a product activity or trade name, doubling the business elsewhere but following the same practices.
Advantages: You do not need to create a business from the start and received all the know-how of the main company, which includes training in all matters relating to the administration.
Disadvantages: You cannot make changes to the business model and have to pay a periodic fee for the use of the mark.
It is a model of very old business that was initially used by magazines and newspapers and now it is also exploited by businesses and websites where customers can access a product or service as long as they pay a fee each way time. Example: Subscribing to a business magazine.
Advantages: Only a single customer who then sell to pay monthly, annually or every so often previously agreed, payment is made in advance and through automatic discounts is also loyalty is created from customers to the brand.
Disadvantages: The client may unsubscribe at any time so you can not rely on an equal amount of income each month.
Much like a franchise, a company can give to another a temporary license to use its brand, logo, image, line of products or services for use limited by paying a percentage of sales.
Advantages: It’s a how to achieve high profitability, just, you have to get the best market licenses and know how to negotiate for a better deal.
Disadvantages: The products or services are not proper and it is not possible to make changes or adapt them to their own business.
It is well known and is a public sale organized to offer a product to the highest bidder, the initial price is set and then potential buyers make their bids. There are closed envelope auction, dynamic auctions and reverse auctions.
Advantages: You get the best prices for the offered good.
Cons: The downside is that you can also declare void with what to offer lower prices.
It is a model used by big multinationals that is usually the manufacturer who have arrived in the small customers, so hire an independent company to do the distribution of products or services to final consumers.
Advantages: Dining such businesses is so wide that you can make big profits with this system.
Disadvantages: You have to be experienced in inventory management and billing, also must care enough deadlines and prices agreed with customers and suppliers.
7. PRODUCTS TIED
– is a business model very criticized but not illegal, the idea is to sell a product at too low a price, even gifted, then offer services or related to fairly high prices that the “customer is forced to buy” products, to use the product base without problems. Looks much in razors and blades, smartphones and telephony and internet packages, or the most used it to free software to read certain files and then charge for the program that creates those files.
Advantages: All customers will like the deals and that this business model is based a hook or an offer to then charge for the product.
Disadvantages: . There is no guarantee that the customer purchases the bundle especially for the price product before using this model Business know that buyers are getting smarter purchases in August.
8. Catalog sales
This business model is based on showing the benefits of the first products through a magazine or copy, then get customer confidence after a while to see if the client is interested, finally making the sale.
Advantages: A Once the customer feel confidence in the brand, then sales can be secured for a long time. There are business networks where discounts, sales and training materials are obtained.
Disadvantages: . The profit margin is variable and must have high availability of time and money.
9. Vending machines
This is a model of auto business, you only need to invest in a machine of this type, look for a busy place, offer a specific product line and waiting for clients to deposit their currencies to gain in return a product as a drink, cookies, newspapers or music.
Advantages: If you have other businesses do not have much time and need additional income this is a good opportunity because the business does not need physical presence, 24 hours of every day of work year.
Disadvantages: The cost of machinery is quite high, you have to give the respective maintenance and must also be attentive to raise up products.
10. DIRECT SALES
They are also known as multilevel marketing and is a controversial business model where businesses support their distributors with royalties and discounts vendors not only sell their products but also by recruiting other salespeople who happen to be the bottom line of its structure which also earn at selling them.
Advantages: All people you recruit will be part of your business network and the more they sell the better the profits are up. One must know how to choose reputable MLM companies where the network scheme is not a pyramid.
Disadvantages: There is well accepted by the public because many scams associated with pyramid schemes undertaken by where only earn those at the party higher.
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