Last updated: December 27th, 2019
I’ve been involved in online entrepreneurship since 2012.
Since 2012, I’ve focused almost entirely on online business models.
I’ve had some major wins, some losses, and I’m still constantly testing everything and building internet business.
Going into 2020, I have a pretty good idea of what works and what doesn’t work in online business.
In today’s article, I guarantee you will learn a thing or two about building a cash-flowing and future-proof online business…
Let’s get started…
Online business model #1. Affiliate websites
I have some optimistic news for you.
Affiliate websites are still going strong in 2020.
However, the affiliate model has evolved quite a bit over the past few years.
Affiliate websites used to be seen as controversial or even deceptive.
Now, the affiliate business model is being used by major media outlets like CNN Underscored.
In 2020, it’s clear that the best affiliate websites are being built legitimately in an effort to help consumers make better buying decisions.
The best affiliate websites operate under a win-win model.
As long as you’re willing to build a legitimate affiliate website, it’s an online business model that’s still stronger than ever.
Online business model #2. Advertising websites
In the past, I haven’t been very keen on building websites just to advertise other people’s products with display advertisements. It didn’t really make sense to me.
However, my opinion on display advertising or programmatic advertising has changed quite a bit over the past few years.
In 2020, display advertising is going to emerge as one of the most lucrative business models on the internet.
Non-intrusive display ads make Google happy. Mainly because Google’s business model depends on advertising.
But most importantly, display advertisements create a clear separation between editorial content and commercial content.
This is why I believe building an advertising website is a pretty safe online business model.
Non-intrusive display ads keep Google happy, so your website can benefit from free Google SEO traffic.
And data shows us that consumers don’t seem to hate non-intrusive advertising as much as they claim.
Now to be fair, digital advertising is nothing new.
Digital advertising is already an enormous ecosystem.
According to the IAB, U.S. digital ad revenue reached a record-breaking $57.9 billion in the first 6 months of 2019. This was a 17% increase compared to the first half of 2018.
While Google, Facebook, Taboola and other massive digital advertising platforms reap a big chunk of digital ad revenue, there’s still a nice chunk of the pie available for publishers.
For example, Hacker Noon is one of my favorite profitable digital media publishers.
Online business model #3. Online courses (education)
Online courses are a beast.
On one hand, you can generate millions in revenue with online courses relatively quickly.
But it’s not easy.
The kicker is you’ll have to use your courses as a platform for delivering genuine results.
Otherwise you’ll be left with a bunch of p*ssed off customers (rightfully so).
Delivering legitimate results is stressful and time-consuming – as it should be.
Making millions is rarely ever easy…
As a course creator, you’re essentially a teacher who is responsible for coaching students.
Teaching students can be very challenging and demanding.
This is why publishing online courses is a long-term business model that requires plenty of careful consideration and a proven track-record of delivering results in a niche you understand extremely well.
Here’s the good news:
If you are capable of delivering results in a particular niche, the online course business model is definitely worthwhile.
When done correctly, it’s one of the best business models out there.
Online business model #4. E-books
E-books are the meme of the online business world.
In other words, E-books catch a lot of jokes and outright hate.
Probably because there are a lot of low-quality e-books floating around on the internet…
But I personally love publishing e-books because they’re relatively passive.
For example, E-books involve a ton of work upfront. But after you’ve invested time, energy and money into publishing your e-books, most of the hard work is done.
As long as your e-books are high-quality, helpful, and contain unique value – they’re a fairly passive income stream.
You can publish a single high-quality e-book and earn royalties for multiple years afterwards.
For rookie publishers, publishing e-books is a proven way to generate an extra $1000/month.
For top publishers, the sky is limit when it comes to selling e-books and similar digital products.
The best e-book publishers are millionaires. And they usually have a team of world-class ghostwriters churning out 5,000 to 10,000 words per day.
Online business model #5. E-commerce
I recently published an article on Online Heaven about the future of internet marketing.
In this article, I explained the reasons why I was launching a direct-to-consumer e-commerce brand.
I built a supplement brand from scratch, took it to roughly break-even profitability, and eventually decided it was not something I wanted to do long-term.
There are some things I loved and hated about e-commerce.
For example, I loved how quickly you can generate revenue with e-commerce.
It’s far easier to sell a physical product than a digital product for numerous reasons.
But after you’ve sold a physical product, you still have to fulfill the physical product. And that’s the part I really hated about e-commerce.
I don’t like dealing with physical products. It’s too messy, and there are too many different variables to deal with.
To be fair, it’s possible to hire a fulfillment company who can handle the entire fulfillment process for you.
But in my case, I was focusing on a particular niche in the supplement / health food industry that didn’t allow for third-party fulfillment or dropshipping.
Fulfillment is also an added expense that you simply don’t have to deal with when you’re selling digital products over the internet.
Now when I think of e-commerce, I think of how inefficient the entire e-commerce business model is.
Now…if you’re thinking about pursuing e-commerce, or if you already have an e-commerce business, I’m not here to insult the e-commerce business model.
For many people, selling physical products is going to be the best path forward. Because the actual process of generating revenue with e-commerce is extremely straightforward.
Anyone can sell a physical product relatively quickly, thanks to paid advertising or media buying.
Product fulfillment, cash flow management and bookkeeping are the real challenges of e-commerce.
At the end of the day, I personally saw too many red flags in the e-commerce industry and decided to abandon ship.
But e-commerce is still a potential goldmine if you want fast profitability and you’re OK with the “heaviness” of handling physical products.
On the flip side, if you value being able to travel the world with just a laptop and a backpack, I recommend sticking with the other digital business models on this list.
The other business models listed in this article don’t require you to touch any physical products at all.
Side note: I believe the dropshipping component of e-commerce can eliminate a lot of the problems that I experienced with e-commerce. If I were to try e-commerce again, I would definitely go the dropshipping route, and focus on driving paid traffic rather than messing around with product fulfillment. Unfortunately dropshipping isn’t always an option for certain niches or product offers.
Online business model #6. Digital marketing agency
The digital marketing agency is one of my all-time favorite online business models.
I can summarize a digital marketing agency for you in just 4 key points:
- Fast cash flow
- Big contracts
- Lots of work involved
- Outreach, outreach and more outreach
That’s pretty much what starting a digital marketing agency comes down to.
With a digital marketing agency, you’ll have the opportunity to generate life-changing cash flow relatively quickly.
But, you’ll spend most of your waking hours prospecting and building assets for clients.
That’s the trade off you’ll have to make.
I believe it’s totally worth it.
Especially if you only plan to operate a digital marketing agency for a few years or so.
Digital marketing agencies are major cash-flow boosters.
Online business model #7. Niche online services
This one is very similar to starting a digital marketing agency, but with a niche-oriented twist.
- Supplement label designer
- Real estate video editor
- Dallas photographer
Almost anyone can launch a niche service on the internet.
Launching a niche online service is incredibly advantageous because it immediately sets you apart from everyone else. It’s like highlighting a single strength that you can offer to clients at a premium.
I personally started out as a mobile app copywriter around 2014 or so.
This was my first real foray into online business.
I pretty much only wrote content for mobile app companies or software companies. And it worked incredibly well.
If you’re capable of selling a micro niche service over the internet, I highly-recommend you do so.
The software or SaaS business model is still pending…
Software or SaaS is the one business model I haven’t tried yet.
Based on some research and programmers I’ve spoken to, software is an incredible business model. But it’s also the most challenging business model to pull off.
I personally don’t have any plans to launch a software business at this time.
But I’m always jotting down software ideas for the future.
You never know what might happen…
So which online business model has the best outlook for the future?
The best online business model for you totally depends on your unique needs.
Everyone is different. People are at different stages of life.
For example, if you desire quick cash-flow, I recommend starting a digital marketing agency or selling a niche service via the internet.
If you’re ready to start building real digital assets, I recommend launching an affiliate website or advertising website.
Going forward, I will focus 100% on digital business models.
After experimenting with starting an e-commerce business, I don’t want to touch a physical product ever again.
Many of the readers on Online Heaven probably feel the same way.
Because at the end of the day, there’s nothing quite like being able to work from a laptop from anywhere in the world.
This is why affiliate websites, advertising websites, and digital marketing agencies probably make the most sense for most readers on Online Heaven.
You might also be interested in publishing e-books or digital courses. That totally works too.
This is a decision you will ultimately have to experiment with and choose for yourself.
Luckily, you still have time to experiment with online business models and figure out which business model works best for you.
You ultimately have to decide which online business model best aligns with the vision you’ve set for your life
There’s a reason people are flocking to digital nomad hubs like Davao and Bangkok.
You can make magic happen with just a laptop, a Wi-Fi connection, and a life vision.
The key is to figure out which online business model suits you best, based on what you want your future life to look like.
After starting a supplement company, I truly hated what my future life was going to look like. I would be tied down to a single location for a long time – weighed down by the heaviness of physical products I was responsible for fulfilling.
Now that I’m back to publishing content and building 100% digital assets, I’m finally back to my true self.
I hope you can learn from my experiences with starting multiple different online businesses.
But at the end of the day, nothing really compares to experimenting with different online business models on your own.
You have to get started as soon as possible, so that you can finally discover your true calling in online business.
Hopefully, you’ll quickly realize that your online business model of choice leads you to the future life you’ve always wanted.
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