Creating Your Online Business Model: Products and Services

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Creating Your Online Business Model: Products and Services

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By: Meylah Blog

Creating Your Online Business Model: Products and Services

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Coming up with the right line of products is hard. Building the right business model for the products is even harder. A business model is a plan that creates an ecosystem for the business to take place in such a way that it generates profit. It takes into account various aspects such as brand, product positioning, target customers, margin and volume. According to Investopedia, business model is “the plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.”

Why is business model necessary? Well, before that, let us ask why, for example, it is important to wear clothes. At a basic level, they are important to cover up our body and to keep us comfortable in different climatic conditions.

Similarly, a business model gives the comfort of a ready-made and smartly chalked-out plan. It protects your business from different market forces and environments that may affect your revenue and profit. It is the cemented base for executing all your present and future business activities.

Every line of product needs a different business model. A toothpaste-selling business cannot have the same model of a car selling business. The process of product development, demand for the product, mode of transaction, method of distribution and delivery, promotion policy, etc. need to be chalked out for each type of business.

The e-commerce business models fall into a sphere that is different from the traditional ones. They leverage two types of operations: B2B (business-to-business) and B2C (business-to-consumer). They can be further categorized into different types such as deals websites, online subscription, retailing, marketplace and exclusive brand stores.

You need to chart out a model based on the type and size of your business. A large organization will have different lines of products and services and various business models will support each of them. But it is fairly simpler when it comes to smaller businesses that generally revolve around just one line of customizable products and services. A well-defined target audience, lesser processes, simpler operations and strategies are the advantages with small businesses. A good business model can make good money and earn loyal customers.

How to create a business model for small businesses? A few basic points need to be followed:

A market-driven goal

Every business starts with a goal and with an awareness about its market potential. All the specifics of a business model should be oriented towards that goal itself and the market. For example, if it is a handicraft business and your goal is to promote jute products, the strategies should be to dig out all the aspects that deal with jute in the fabric market and to evolve a specific business model, be it for buying or selling.

Have quality

The strategies, procedures, functions and services your business involves should adhere to high quality standards. For, the customers benefit not just from money saving alone but also from the quality of products and services they buy as well. Attaching importance to the quality aspect is more important for small businesses as their products are either crafted or customized or have a personal touch to them.

Money management

Surely, small businesses won’t have the advantage of huge funding. How much of money needs to be invested in the beginning and what kind of continuous financial support is needed along the way should be strategized in the business model. Your model should have only those ways of doing things that fall within the budgetary constraints.

Marketing techniques

A small business should define its marketing techniques clearly. The method of advertising and selling (low cost mostly) is a major part of any business. For small businesses, the usual cost-effective marketing methods are:

a)      Use of social media and also selling through big online portals.

b)      Creative flyers, consumer guides and brochures.

c)      Selling in local markets - Setting up stalls in fares. 

d)      Coupons, discounts, free gift-wrapping, complimentary goodies, bonus points, contests, etc.

e)      Using internet to reach a large number of customers to send newsletters, information about extra benefits, etc.

 

After-sales service: Providing value to customers

One of the metrics of providing quality is the after-sales service. Your selling does not end after a consumer makes his first buy. In fact, it starts from there. Create a model that automatically prompts the customers for feedback through mails, request for ratings and suggestions apart from making after-sales call. This will retain the customers and improve the goodwill of the business. A good model will strategically use various kinds of after-sales services. It is not the end sale. It is a part of the sale.

The importance of evolving a creative business model may get lost in the urge to make the business a money machine. Never lose sight of the creative aspects, as they can be a force multiplier to your business model.

Related articles:

 

Image source: http://blog.tifwe.org/wp-content/uploads/2014/01/Economic-Growth-819x1024.jpg

 

 

 

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At Meylah, our goal is to help independent sellers succeed in building their businesses online.  We know it can be tough, but with our online storefronts, marketplace, entrepreneurial advice and social networking know-how, you’ll be one step closer to success. We know how hard and time consuming being an entrepreneur can be, but with the proper skills at hand, we believe anyone can succeed!

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