There are many different types of business models for a company to choose from brokerage model, advertising model, infomediary model, merchant model, manufacturer model. Affiliate model, community model, and subscription model. “A business model is the method of doing business by which a company can sustain itself ” (Anonymous, business models, Ã?Â¶2). With all the different models, it is important for a company to select the one or ones that will be best suited for their organizational plan.
The brokerage model is used to bring buyers and sellers together, they help with business-to-business, business-to-consumer or consumer-to-consumer markets. There are a couple of different brokerage models. A marketplace exchange which handles the entire transaction process, it is a model which can operate independently. A Buy/sell fulfillment which is like a contract for products or services which can be bought or sold and includes prices. There is also demand collection system, transaction broker, distributor, search agent, auction broker, which is very similar to eBay, where sellers are charged a listing fee, but their product or service is placed on a worldwide auction for bidding. Virtual marketplace is the last type of brokerage model.
The next business model is Advertising, this “is an extension of the traditional media broadcast model” (Anonymous, Advertising Model, Ã?Â¶ 1). This model is important where visibility is high. Like the brokerage model, there are many different types of advertising models. A good example of a Portal model is yahoo, where the search engine includes many different services. This allows for high visibility and makes advertising profitable. Other models in the Classifieds model can be listed for sale, examples of these advertising models include Monster.com and Match.com. There are also user registration models, Query-based paid placement, Contextual advertising, content-targeted advertising, infomercials and ultramercials.
Infomediary Model help different organizations understand a given target market. They help to analyze information about consumer habits. Different infomediary models include Advertising Networks, which is able to launch large marketing campaigns and banner ads. The results from these campaigns are used for analyzing market effectiveness. Other forms include Audience measurement services, incentive marketing, and metamediary.
The Merchant model are models where the “sales may be made based on list prices or through auction” (Anonymous, Merchant Model, Ã?Â¶ 1). There are different types, which include catalog merchant model, where sales are a combination of mail, telephone, and online ordering, a good example of this is Lands’ End. Other types include Click and Mortar model, bit vendor, and virtual merchant, this type of merchant sells their goods directly and only over the internet.
“The manufacturer or ‘direct model’, is predicated on the power of the web to allow a manufacturer to reach buyers directly” (Anonymous, Manufacturer model, Ã?Â¶ 1). The four types of models include Purchase, Lease, license and brand integrated content. Purchase is used for the sale of products where the ownership of the item is switched from the seller to the buyer. In the lease model, the buyer has the right to use the product for a set amount of time after paying a set fee for the use of the product. The license model includes using a product where the ownership of the product still belongs to the manufacturer of the item.
The Affiliate model offers purchase opportunities by offering financial incentives. The buyer does not have to develop a product only pick one from the merchants that are available. The banner exchange model allows the company to place their ads on other sites. The pay-per-click which pays the site where the ad is housed every time a user clicks on the ad. Revenue Sharing offers a percent of the sales for the user click as long as the consumer purchases a product.
The community model is based on user loyalty. Open content community model allows accessibility to a global community, a good example of this is wikipedia, an online encyclopedia where users may log in and submit information. An open source is similar to open content, however in this model “software [is] developed collaboratively by a global community of programmers who share code openly” (anonymous, Community Model, Ã?Â¶ 2). The Community model also includes Public Broadcasting and Social Networking services.
The last model is the Subscription model. This model charges consumers a charge for their services. These charges may be daily, monthly or annual depending on the subscription. Content services, such as listen.com or netflix, offer users audio or video content for a fee. The Person-to-person networking service allows users to search for other users in the database. The Subscription model also includes trust services and internet services providers.
By looking and researching each one of the models the business Amazon.com uses a couple of different models to promote marketing. Amazon.com uses the virtual marketplace brokerage model as one of their e-business models. The virtual marketplace is like a mall. Consumers can log on to the site and view items from online merchants. Amazon.com offers products from target, office depot, shutterfly, fidelity, tire rack and weightwatchers. By using the virtual marketplace model amazon.com can also offer automated transactions and in-store pickup. Along with using the virtual marketplace, they also use the merchant model of e-business in the form of a virtual merchant. This is because Amazon.com operates solely over the internet. The only way for customers to access the store is through the internet.
4 P’s of Marketing
While business models help companies plan the best way to generate revenue there are other factors which must be considered. The 4 P’s of marketing, price, promotion, product and place also contribute to the overall success of the company. In order to help Amazon.com there are some technologies which can be used to promote sales. Some different types of marketing technologies should be banner ads or pay-per-click ads offered on the websites of the companies whose products they sell. Other technologies may include pop-ups on their website informing the consumer of special deals or discounts for items. Another option Amazon offers is a discount on one item when a second item is purchased.
With all the different options available for business models it is important to choose the best ones to promote sales and generate revenue. Amazon.com is a successful internet business, they utilize the best business models and offer a variety of products.