How to Choose an Online Business Model

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Having an online business means you have different ways to make money than you otherwise would in a brick and mortar business. Yes, you could still list the products and services you regularly sell in person to your usual customers, but what if you could do something completely different? Here are a few ways people on the internet are making money as their sole business model, or in addition to, their current offerings.

Affiliate Marketing

Affiliate marketing is a very simple way to make passive income directly on your website and/or platforms you share content to. The basic idea is promoting other businesses’ products and services online, and receiving a commission for each sale you make.

On your website

When website visitors are looking for resources on your website, they may click around from page to page. If you have a page, or a series of pages, that list out companies you partner with and the products they offer, you could charge that company a commission every time you send someone to their website. You could also charge them a monthly fee to be listed on your website, or list their products on your online store. Regardless of how you do this, the biggest factor will be the amount of traffic you get on your website. If you rarely get traffic, another company probably would opt out of a monthly fee to be listed on your website. If you get a lot of traffic, but not many of them go to your partner’s website and end up buying, they may not be willing to pay as high of a commission to you.

On content you produce

If you produce a blog, podcast, or some other type of content, and share it on social media, you could also become an affiliate marketer. Have you ever heard of Social Influencers? People who have followings on social media platforms promote different products and services to their followers. If their followers make a purchase, the influencer will receive a commission check. This may not be suitable for most companies wanting to get into affiliate marketing, as they would need to amass a large social following and/or website visitors every month.


Have you, in your day-to-day job, obtained a skill that you could offer to customers outside of the company you work for? Or perhaps you own a business that focuses on a particular type of writing, advertising, or designing, but you would like to work on other projects outside of the scope of your current business model? Consider freelancing your skills out to the many customers online. Platforms such as Fiverr and Upwork allow you to make money writing, designing, editing, voice-overs, programming and more.

Coaching and Consulting

Similar to freelancing, offering coaching and consulting services to customers is another way to advertise your services. If you are an expert in your field, and can confidently offer advice and guidance to customers, you can make money providing coaching and consulting services on a one-on-one or group basis.

Information Products

Perhaps you want to sell your expertise in other ways. Selling ebooks, worksheets, templates, and online courses may very well be a great option for you.

Software as a Service (SaaS)

Are you skilled at creating software or applications? Or perhaps you just have a great idea for a new program or app companies or individuals could use? Software as a Service, or SaaS, is essentially providing a platform or service to individuals or companies and charging them a fee by way of a recurring subscription. Microsoft Office (Word, Excel, Powerpoint, etc.) products are an example of this. These products may offer a free trial period, after which you would pay a monthly or annual fee to continue using the application(s). Websites like Facebook are also a SaaS website. However, there isn’t a dollar amount paid to these companies by users. You as the user provide Facebook with data on their platform and across the web that they then sell to advertisers on their platform. However you do it, the premise is still the same. Provide software and collect fees for usage.

Third Party Platforms

Do you have products to sell but don’t want to create your own store to sell them? No problem! There are plenty of platforms out there, like AmazonFacebook Marketplace, and eBay, where you can list your products and sell them without the hassle of designing your own website and integrating your own shop and payment gateways. Keep in mind that there will be additional fees associated with selling your products on these platforms. In the case of Amazon, you may have to ship products “free” and eat the cost to do so. However, the traffic these sites bring in are enormous, and it may be the right business model for you.


If you are just looking for a way to increase your revenue to supplement in person sales, starting an Ecommerce business might be the route for you. See our step for selling products and services online for more details.

Frequently Asked Questions

Do you have questions about what business model you should choose for your online business? You should consider checking out our Resource Navigator. It houses the contact information of 400 of our most helpful partners from across the state who provide free to low-cost assistance to Iowa entrepreneurs and small business owners.

Q: Do I have to choose only one business model for my website?
A: No! You can have a variety of products and services offered by your company on a single website. For example, you could offer your in-house software as a SAAS product to customers. You could then use that same SAAS, and with a few tweaks, create a new product that is “white labeled” and can be sold to a completely different kind of customer.

Q: If I am selling my product on a third part website like Fiverr, do I have to worry about sales tax?
A: That depends. Some websites require you to have your own sales tax number and will collect and remit the taxes on your behalf to the respective state(s) the customer purchased your product from. Make sure you check all rules and requirements of the website before you begin selling on it.

Q: Is there an online business model that works better than others?
A: Technically, yes. This depends entirely on the product/service, customer, price, and problem. With this in mind, really ask yourself if the problem you are solving fits the business model you want to offer. If it does, go with it. If it doesn’t, make complete or slight changes until you find a model that works (sells).

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NOTICE: The information included on this website is to be used only as a guide. It is not intended to cover all provisions of the law or every taxpayer's specific circumstances.


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