There are many business models that any prospective entrepreneur can adopt, but not all of them are proven to be effective and capable of generating significant revenue. As an entrepreneur, your goal should be to use a business model that will grow and thrive over time. However long you head the company before you turn it over to new hands and regardless of the circumstances, you want what you have made to stand the test of time.
Any business model you choose should be focused on how to solve a problem or satisfy a market more effectively than whatever product or service is currently available, or barring that, more cheaply. With that in mind, the following business models have been proven to be considerably profitable and experiencing sustained growth.
Reverse Auction Type Business Model
When Priceline started this business model, most business experts and industry leaders thought it a joke. Fast-forward a few years and the model has grown by leaps and bounds.
In this model, buyers get to choose how much they want to pay for services or products. If the provider or merchant is comfortable with the price listed by the buyer, they’ll include terms and conditions that the customer/buyer has to agree with before they can sell to them.
This is why Priceline is currently one of the leading accommodation, car rental and airline ticketing brokers in the world. Consumers love using Priceline because it offers convenience, ease-of-use, and affordability, all within a short time frame. And so far, the company is making a killing by recording 50% profit growth.
Create a Virtual Marketplace for Sellers and Buyers
No company has mastered this like eBay has. The company created the world’s largest auction website and populated it with millions of buyers and sellers. And the company continues to wax strong because of the strict user guidelines, transparency and tough criticisms.
This has the effect of encouraging most buyers and sellers to be well-behaved. And the integration of Paypal into the business as the payment option of choice has further made it difficult for fraud to happen nowadays –although that was a problem in the past.
So, with a tough rating system, an in-house payment platform, and millions of products available for auction through the bidding or buy-it-now process, eBay has gone on to become a household name.
Sell Tons of Merchandise at the Lowest Prices Possible
This is simply the idea behind Amazon’s business model. As the world’s largest online marketplace, Amazon has expanded from simply selling books to selling all kinds of merchandise.
They created a system where they could get the lowest prices from suppliers, deliver the products in record time and eliminate unnecessary baggage, thus ensuring that customer satisfaction grew to almost 100%.
These, plus the addition of a review system where buyers can detail their experience with the products they bought have made Amazon one of the world’s largest onlinecompanies. That has resulted in a 27% year-on-year growth over the last decade.
Provide an Online Task Management Platform for Businesses
Managing tasks in business can be pretty difficult when you have to manage many workers, and it’s not always possible to directly interface with every element yourself. Instead, try creating an easy-to-use platform that provides you with a bird’s eye view of pending and completed tasks, payroll management options, and collaboration tools. In this way, you can address time management and productivity concerns with the same efficiency you come to expect from your reports.This is exactly the gap that Scoro fills with its project management software, providing an integrated platform for generalized and tailor-made solutions.
While there are many more models, we outlined these business models so that you can get a broad perspective of models that have shown consistent growth and profits over time –we’re talking at least ten years. Smart entrepreneurs can take these models and tweak them to better suit their businesses.
Oscar King is a small business operator and freelance writer who shares his experience and opinions on the business world and current events through articles and editorials.
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