I’ve written before about how important it is to choose a marketing niche, and why it’s better to focus on something that’s popular but relatively narrow, rather than something broad. After all, a niche, by definition, is “a shallow recess.” It’s something small, rather than something broad. That’s why I’ve suggested, for instance, that if animals interest you, picking a marketing niche around dog training would be a better choice than something relating to animals in general, or even dogs in particular.
Still, people tend to think in bigger terms than that, at least when they’re first starting out in online marketing. That’s why you’ll frequently see people in marketing forums asking questions such as “What is the best niche?” That would seem to be a straightforward question; the person asking simply wants someone to tell them what to do in order to make money. The problem is that a question like that actually brings about more questions than it does answers.
There are a number of things to consider when you decide that you want to work online from home. Finding a good marketing niche is one of them, and we previously discussed how you might go about doing that. Once you decide what your site and business is going to be about, you need to decide on a business model. If the marketing niche is the “what” of making money online, then the business model is the “how.” It represents the process that you’re going to use in order to generate revenue on your Website. Needless to say, choosing a business model is an important step in creating your online business and there is no right, wrong or “best” way to do it. Each method has its pros and cons and you need to find a business model that works best for you and your chosen marketing niche.
We’ll take a look at a few of the different options that are available and give you an overview of the advantages and drawbacks of using that particular business model.
Direct Retail Business Model
Selling physical products at retail – Selling retail products, packaging them, and shipping them to your customers is the oldest and the most traditional way of doing business. You will be, in essence, operating an online store. When someone buys one of your products, you will need to put the product in a box and mail it to them. There are some good reasons to use this business model including the fact that it’s one that most everyone understands right away. You list something for sale on your Website, someone buys it, and you send it to them. That’s pretty straightforward. On the downside, there are some issues to consider – do you have space to store merchandise? If not, where are you going to keep your inventory? There are companies that offer dropshipping, and they will warehouse merchandise for you and ship it to your customer. All you have to do is pay them the wholesale price and provide the name of the recipient. There are fees for dropshipping services, but it’s the best way to run a retail business from your home. The downside of dropshipping is that you’re buying from a large wholesaler who will be selling the same merchandise to lots of other retailers, so you’ll have lots of competition. A good workaround to that is to sell unique merchandise, and while that method is outside the scope of this site, we can recommend a great book on building an online store. While selling at direct retail is a well-established business model, it can be a lot more work than most people want to do, and there are ways of making money online that don’t involve packing and shipping merchandise.