- Mar 10, 2010
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- 101,391
It is really easy for us to lose the vision that our online revenue streams are businesses. We can typically run our online enterprises from almost anywhere; many guys travel the world and manage their websites and serve their clients from various places as they enjoy the kind of freedom that you get to experience. Others bounce from one home they own to another and some just work when the Spirit moves them.
Running a business without physical limitations such as being tied down, or with hours that might be a bit unusual as an outsider would view it can tend to make a person miss out on opportunities and tried and true business models that have propelled companies into revenue brackets that can make a person's head spin. Some of those business models are easily transferable to those of us in the IM industry and we can be short sighted if we do not take advantage of them.
I thought it a good idea to bring up a few of those business models so that you can look at how you could implement them into each of your online enterprises.
Take General Motors and look at this particular business model. They have a family of vehicle manufacturers under their roof... you can buy a higher end vehicle from their Cadillac brand, something mid level like a Buick or their lower end brand which is Chevrolet. All are GM, all are under the same umbrella but they appeal to different people and thus they are able to get a market share in several different niches. And, inside of those brands they have built another level and made available higher end and lower end cars inside of each of those brands. The thinking is, in part I am sure, that if Joe car buyer likes the cheaper Buick he bought, he may be more inclined to buy a Buick again and if his income bracket is higher he may want a higher end Buick.
Many food companies package their exact product for other "competing" companies. In fact it is not unusual for one company to package the same product under several different labels for companies competing for the same dollar in the same neighborhood. In the USA, companies like Duke Foods packages for Publix, Bi-Lo, Harris Teeter, Piggly Wiggly and other big name supermarkets and many of those stores are in the same area competing for the same dollar. I experienced that on the manufacturing end when I first started in the bottled water business. I went to work for a little known company in central Florida in the sales end working their retail operations.
After a short time there I found out that the retail end was nothing more than a stepping stone to their real business; producing the product under more than 35 different labels and selling it on a wholesale basis. Their wholesale end made the retail end look like child's play. You would be surprised at how many different businesses use that as part of their business model. The money is not in making a name for them selves with Mr. and Mrs. Jones but in doing volume under a variety of labels and having someone else to the heavy lifting of "business to consumer".
One more effective way to build a business that is done the world over in similar fashion is in the advertising world. A lot of times you'll see a company advertising that they do XYZ service and use only "Brand A" components. They are not doing that so much because Brand A is the best in the field but because Brand A is paying for part of the advertising. Co-op advertising is an excellent way to cut way down on your advertising expense while still reaching your market AND getting the added in credibility of a nationally known brand. That is common practice in the trades here in the USA; Plumbing services advertise they use Kohler parts, Air Conditioning Companies will promote their use of Carrier Units, Roofers will use CertainTeed or GAF in their advertising... more often then not they are either getting a credit on their bill, a discount on future purchases or even a check in the mail.
I've done that with brick and mortar Business to Consumer businesses in several verticals and it is a great way to grow your business without getting kicked in the teeth with expensive advertising costs.
I'd be remiss if I did not bring up this business model, although it takes a different kind of mindset. That is where you actually partner up, or buy an ancillary business to the one you currently have yet keep the brand active. That is an excellent way to make sure that you have a piece of the market you would otherwise not have or a great way to just increase your revenue. Many times you can cross sell as well and thus impact your current businesses in a positive way. We have seen Facebook do that with WhatsApp to increase their client base; At&T bought out Direct TV and still offer their U-verse TV packages but now have the added benefit selling to those that may prefer satellite and I saw it just a few months ago with a Fitness Center partnering up with several others and keeping those new clubs open and not changing the name. They just increased their market share by a partial acquisition and still kept their core business.
Our businesses are not strange or exotic, they are just a little different than what you see when you walk down the main street and those business models can probably be implemented in your online activities in one fashion or another. To implement them in your specific situation can take some thought and some planning but I'd be real surprised if you did not end up with a huge uptick in your revenue and a much more solid business base that would withstand some of the extreme changes we have in our industry as well.
Running a business without physical limitations such as being tied down, or with hours that might be a bit unusual as an outsider would view it can tend to make a person miss out on opportunities and tried and true business models that have propelled companies into revenue brackets that can make a person's head spin. Some of those business models are easily transferable to those of us in the IM industry and we can be short sighted if we do not take advantage of them.
I thought it a good idea to bring up a few of those business models so that you can look at how you could implement them into each of your online enterprises.
Take General Motors and look at this particular business model. They have a family of vehicle manufacturers under their roof... you can buy a higher end vehicle from their Cadillac brand, something mid level like a Buick or their lower end brand which is Chevrolet. All are GM, all are under the same umbrella but they appeal to different people and thus they are able to get a market share in several different niches. And, inside of those brands they have built another level and made available higher end and lower end cars inside of each of those brands. The thinking is, in part I am sure, that if Joe car buyer likes the cheaper Buick he bought, he may be more inclined to buy a Buick again and if his income bracket is higher he may want a higher end Buick.
Many food companies package their exact product for other "competing" companies. In fact it is not unusual for one company to package the same product under several different labels for companies competing for the same dollar in the same neighborhood. In the USA, companies like Duke Foods packages for Publix, Bi-Lo, Harris Teeter, Piggly Wiggly and other big name supermarkets and many of those stores are in the same area competing for the same dollar. I experienced that on the manufacturing end when I first started in the bottled water business. I went to work for a little known company in central Florida in the sales end working their retail operations.
After a short time there I found out that the retail end was nothing more than a stepping stone to their real business; producing the product under more than 35 different labels and selling it on a wholesale basis. Their wholesale end made the retail end look like child's play. You would be surprised at how many different businesses use that as part of their business model. The money is not in making a name for them selves with Mr. and Mrs. Jones but in doing volume under a variety of labels and having someone else to the heavy lifting of "business to consumer".
One more effective way to build a business that is done the world over in similar fashion is in the advertising world. A lot of times you'll see a company advertising that they do XYZ service and use only "Brand A" components. They are not doing that so much because Brand A is the best in the field but because Brand A is paying for part of the advertising. Co-op advertising is an excellent way to cut way down on your advertising expense while still reaching your market AND getting the added in credibility of a nationally known brand. That is common practice in the trades here in the USA; Plumbing services advertise they use Kohler parts, Air Conditioning Companies will promote their use of Carrier Units, Roofers will use CertainTeed or GAF in their advertising... more often then not they are either getting a credit on their bill, a discount on future purchases or even a check in the mail.
I've done that with brick and mortar Business to Consumer businesses in several verticals and it is a great way to grow your business without getting kicked in the teeth with expensive advertising costs.
I'd be remiss if I did not bring up this business model, although it takes a different kind of mindset. That is where you actually partner up, or buy an ancillary business to the one you currently have yet keep the brand active. That is an excellent way to make sure that you have a piece of the market you would otherwise not have or a great way to just increase your revenue. Many times you can cross sell as well and thus impact your current businesses in a positive way. We have seen Facebook do that with WhatsApp to increase their client base; At&T bought out Direct TV and still offer their U-verse TV packages but now have the added benefit selling to those that may prefer satellite and I saw it just a few months ago with a Fitness Center partnering up with several others and keeping those new clubs open and not changing the name. They just increased their market share by a partial acquisition and still kept their core business.
Our businesses are not strange or exotic, they are just a little different than what you see when you walk down the main street and those business models can probably be implemented in your online activities in one fashion or another. To implement them in your specific situation can take some thought and some planning but I'd be real surprised if you did not end up with a huge uptick in your revenue and a much more solid business base that would withstand some of the extreme changes we have in our industry as well.
