Which product sales are most profitable today
The 55 most innovative business models to imitate
Did you know that today's most successful companies pursue at least one of the following business models?
In this article you will find out which business models have the greatest chance of success, including examples of how they can be implemented.
I promise you that at least one of them can be applied to your business idea! Ready? Well then go!
Business model # 1 ADD-ON
- Separate billing of extras
The main product in this model is sold comparatively cheaply. However, there are many additives that drive up total sales per customer. The advantage for the customer is that he only buys what he really wants, and that can be a bit more expensive.
Ryanair, an Irish low-cost airline, sells the flights themselves very cheaply. However, if you want something to eat during the flights or book additional luggage at short notice, it can be quite expensive. You can find out what else makes the airline very successful in this video:
Business model # 2 affiliation
- Success of the partner = own success
In this model, the companies sell their products through affiliate partners. This enables the company to operate very efficient (because low-risk) marketing through success-based remuneration. It also opens the way to customers that the company might never have reached itself.
Amazon, the largest retailer in the world, has its own affiliate program through which a large part of the sales is initiated. Another example of this model is the Teezily company, whose infrastructure you can use to build your business with relatively little start-up capital.
Business model # 3 Aikido
- Convert the opponent's strengths into weaknesses
The Aikido model comes from a Japanese martial art and one tries to conquer the market with a similar product but with a completely different value proposition.
This model attracts mainly customers who are not satisfied with the mainstream.
Swatch, the Swiss watch manufacturer, has followed precisely this model with its moderately priced designer watches. Swatch clearly stands out from the traditional watch industry, which focuses primarily on luxurious movements with precious metals. The clocks have a plastic frame and do not look like the typical 0815 clock, even with the bright colors.
Business model # 4 auction
- Three, two, one ... mine
Auctions are a very old system that has been revolutionized by the Internet. The highest bidder gets the product, regardless of the price.
With this approach, eBay became one of the largest online marketplaces in the world. In other words, to a company with sales of $ 8.6 billion in 2016.
Business model # 5 barter
- Co-products as a bonus
With the barter model, the customer does not pay with money but with another service that is of value to the respective company. This service does not always have to be direct, so the Barter model can also be used as a marketing tool, for example.
A good example is Procter & Gamble, one of the largest US corporations with countless billion-dollar brands. The diaper brand of the company “Pampers” initially advertised, among other things, with free articles at maternity wards. This concept is based on reciprocity, which you can use for networking or manipulating people, for example.
Business model # 6 cash machine
- Liquidity through negative current assets
In this model, the customer buys the products before the company even owns the products.
Amazon is arguably the most popular cash machine, and while the company now stocks products, many of the items are sold through an on-demand system. So if you buy a physical book from Amazon that has been published via Amazon, it will only be printed after you have bought it. Another example of this business model is dropshipping, which is done in a similar way.
Business model # 7 Cross Selling
- Two birds with one stone
With this model, the customer is motivated to buy other products that have nothing to do with the original product while buying a product.
A well-known example is the company Tchibo, one of the largest German international consumer goods and retail companies. When I go to a Tchibo store to buy a pack of coffee, many other exciting products await me, such as sportswear or kitchen appliances. So buying one product is the sales strategy for the next product. This partly enables a profitable first contact, but in any case increases the customer lifetime value:
Business model # 8 crowdfunding
- Crowd finance
In this model, which most of you are already familiar with, a product or service is financed by many individual investors who are interested in the product. However, they do not invest for shares or money but because they want to use the product themselves.
Pebble Technology is a prime example of a company that was only financed by crowdfunding. When the company ran a crowdfunding ad for $ 100,000 for a smartwatch in 2009, it had $ 10 million in funding in just two hours.
Business model # 9 crowdsourcing
- swarm outsourcing
One method that is gaining more and more importance, especially through the Internet and global networking, is crowdsourcing. With this model, companies with problems turn to their own customers or other interested parties. They are usually somewhat rewarded for solving this problem, although it is often the case that there is a great price that the participant with the best solution gets.
Netflix, the American streaming service, presented a prize of one million US dollars for the participant, which can improve the accuracy of the Netflix algorithm by 10%. The algorithm means the method behind recommending new films to customers. Obviously, to the company, such an improvement is worth much more than $ 100,000,000. Incidentally, one team was actually able to improve the algorithm by 10.6%. You can find a video on the company's history and the company's success factors here.
Business model # 10 customer loyalty
- Incentives for long loyalty
Customers are encouraged to remain loyal to the company - as the name suggests - through incentives for long-term loyalty. You can do this, for example, by rewarding the customer with “gifts” after a certain number of purchases or after a few years.
Lufthansa has implemented this model - just like most other airlines - through the so-called Miles & More program. For every mile you fly you get points and these points can be redeemed at the end of each season.
You often get small gifts for this, but if you fly a lot, you can get a free flight.
Business model # 11 digitalization
- Digitization of physical products
Digitization is an almost self-explanatory business model and also one that has produced countless very large companies in the last decade. Amazon, for example, digitized the retail business, e-mail the normal mail and Wikipedia traditional encyclopedias. A very current example is the banking world, which is currently being revolutionized by blockchain technology. Which industry has not yet been (sufficiently) digitized?
A good example of the digitization of an industry that was usually more offline is accounting.
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Business model # 12 Direct Selling
- Leaving out middlemen
One model that has been gaining popularity, especially in recent years, is direct selling, in which companies switch off wholesalers and retailers and sell them directly to consumers. Which results in lower prices for the customer and a better relationship between company and customer.
Especially if you are a podcast listener (also like to listen to our podcast), you have probably heard of the start-up "Casper" - a very innovative US mattress manufacturer that does not sell traditional mattress stores as usual sold, but directly to consumers via their own online shop.
Business model # 13 e-commerce
- Transparency and cost reduction through online trading
E-commerce, or the digitization of retail, enables retailers to reduce costs, which ultimately leads to low prices for the customer. In addition, the model offers the customer a wider selection and reduces the entry barriers so that you can be active in e-commerce with little money (which can be more difficult in traditional retail).
When we talk about e-commerce, of course, we cannot ignore Zappos. This is an American e-commerce company that specializes in the sale of shoes and fashion and was bought by Amazon in 2009 for $ 850 million.
Business model # 14 Experience Selling
- Emotionalization of products
This model could also be called brand building.
Customers don't just sell a product or service, they sell brands and experiences.
You have to use Red Bull as the best example. The Austrian company, which produces energy drinks and is still owned by the founders, has managed to build a brand, if not a lifestyle, through very intelligent marketing. So when you buy Red Bull you are not buying a really good drink but an experience - and that's what we mean by Experience Selling.
Business model # 15 flat rate
- Unlimited consumption at a fixed price
With this model, you pay a fixed fee for a product and can use this product indefinitely. The user can benefit from the low regular costs and constant improvements and extensions while the company is happy about the constant turnover.
This model is becoming more and more relevant in the course of digitization and, for example, the software provider Adobe is implementing this business model with products such as Photoshop, InDesign, Illustrator, Premiere Pro and many more.
Business Model # 16 Fractionalized Ownership
- Efficient use through partial ownership
This shared ownership model focuses on the principle of efficiency. Many of the assets a company owns, such as delivery trucks, stores, etc., are often idle for hours or even days. But not only companies but also private consumers often own things that often stand around unused for a long time. Especially when these assets are very expensive it makes sense to share them so that everyone can use them when they are just standing around the other.
A group of passionate car enthusiasts started the company ecuire25 in the UK in 2005. The principle behind the company: Nobody has to take the high costs of purchasing a Lamborghini, Bugatti or Ferrari into their own hands.
The members pay a monthly fee in the local clubs that allows them to rent a luxury car for a few days - the number of days depends on the amount of the fee.
The members have the advantage of not having to raise all the money for the car, nor do they have the task of bringing the car to the workshop and maintaining it, since ecuire25 takes care of everything.
To join the club you pay an initial fee between $ 15,000 and $ 100,000 and a monthly fee between $ 1,800 and $ 2,500.
Business model # 17 franchising
- One for all, all for one
With this model, there is the franchisor who owns a brand and a product. This trademark or the rights to use it are handed over to the franchisee - usually for a franchise fee. In this way, the company can lower its own risk and even very capital-intensive ventures can scale quickly.
Franchising is a well-known, but also well-tried system, from Mcdonalds to StarBucks, huge corporations are repeatedly built on a franchise model. Even if it sounds very easy and tempting, there are a few things to consider when it comes to franchising:
Business model # 18 Freemium
- Free basic and paid premium version
With the freemium model, which is usually only used for software applications, the basic version is free. This usually has a quite extensive package of functions, but is a bit too slimmed down, especially for professional use.
Exactly for this user there is a paid premium version which has an all-encompassing function package.
This model is particularly popular with apps and software products, as users are generally reluctant to pay for apps. A well-known example of such a model is LinkedIN, the social network for professional contacts is basically free. However, if you want to see who, for example, has visited your own profile - then you have to pay.
Business model # 19 From Push to Pull
- Customer suction as the center of value creation
This concept is about using decentralization to achieve a higher level of centralization. The company's decisions are decentralized in order to achieve more flexible processes and to be able to react faster to customers. By decentralizing the decisions, the customer is put at the center - centralized.
Bershka, a clothing retailer and one of the companies of the richest European and his company Inditex, works very intensively with the push to pull model. It reacts incredibly quickly to new trends in the industry in order to always offer what customers currently perceive to be trendy. Bershka has perfected this model and always manages to identify new trends before everyone else and thus use what makes the chain so successful.
Business model # 20 Guaranteed Availability
- Guaranteed availability of the products
Every entrepreneur, whether an Amazon dealer or a carpenter, knows that when the resources you need for your own work don't work you have a big problem. And it doesn't matter whether an Amazon retailer's Amazon account is blocked or the carpenter's machine is broken. This can often cost a lot of money and pretty much every entrepreneur is willing to pay for the guaranteed availability of resources. And this is where the Guaranteed Availability model comes into play.
You not only pay for the product itself but also for the constant maintenance. For the customer, this means less effort and for the company itself, regular sales.
The Swiss group ABB, which is one of the leading companies in energy and automation technology, has used this model in its Turbo Systems division. The company offers turbochargers for diesel and gas engines, which are used, for example, on ships, in power plants and on generators, on diesel locomotives and on large all-terrain mining and construction vehicles. When these turbochargers fail, customers have a big problem and are willing to pay a decent price for maintenance. It therefore makes sense for the company to apply this model.
Business model # 21 Hidden Revenue
- Separation of income and customer
This model refutes the theory that whoever uses the product is responsible for the company's sales. The users of the product are not the real customers but the real product.
This model is currently being implemented by the second largest company in the world, Alphabet (or Google). Google users are all those who search for something in the Google search engine or use one of the other Google products. The data of these users (i.e. the users themselves) is the product through which the company generates sales - which at Google mainly happens through marketing. You can find out how you can use this fact for yourself in our guide to new customer acquisition.
Business model # 22 ingredient branding
- Brand within the brand
Ingredient branding is a very exciting, albeit somewhat less known, model. Many products, especially when it comes to technology, consist of many individual parts. Often many of the parts do not come from the actual producer, who usually only buys them.
If he buys very high quality parts from companies that are themselves brands, he can advertise his product with this and that part of the XYZ brand, whereby the customer assesses the product as very high quality.
You have certainly noticed that many advertisements relating to laptops or tablets advertise which Intel processor they contain. This is due to the fact that the American semiconductor manufacturer with its almost 100,000 employees is itself a brand that is viewed very positively by consumers.
Business model # 23 integrator
- Added value through integration
With this model, companies declare war on outsourcing and integrate all parts of the value chain into their own company. If implemented correctly, this can lead to increased efficiency, better control options and more flexibility.
A well-known example is the Spanish textile trading company Inditex, through which Amancio Ortega Gaona became the richest person in Europe and the second richest person in the world. Companies such as Zara and Bershka belong to Inditex and the company takes care of everything itself, from production to sales.
Business model # 24 Layer Player
- The shift specialist
Every value chain consists of different parts or layers. A shift specialist is a company that masters a shift extremely well and uses it in many industries and various value chains. This leads to the fact that the company becomes much more efficient due to scaling effects and the overall quality of the added value increases due to the high quality of this one layer.
PayPal is a real shift specialist and takes care of the payment processing shift in a wide variety of industries. You can find out what makes the company so successful in this video:
Business model # 25 Leverage Customer Data
- Multi-sided use of customer data
The value is gained by collecting user data and preparing it for internal use or interested third parties.
Revenues are usually generated from the sale of this data to third parties. Sometimes the data is only used internally to advertise better.
Probably the best-known company with such a model is Facebook. The company uses the user data both to be able to design the advertising placements more efficiently, but also forwards some of them directly to customers. There are now companies that could only be built through Facebook advertising.
Business model # 26 License
- Commercialization of intellectual property
This model focuses on creating intellectual assets that can be licensed to other companies. This allows companies to focus only on developing intellectual assets. If this model did not exist, the company would have to apply the intellectual assets to its own products, which would again waste a large part of the money in expenses related to this product.
IBM, the US software giant, has built its business around this model and has done so very successfully, as can be seen from its almost 400,000 employees and sales of 82 billion dollars. The company licenses its software and is known for a very complex licensing model.
Business model # 27 Lock In
- Compulsory loyalty due to high switching costs
With this model, the customer becomes - similar to the Customer loyalty Model - motivated by incentives to remain loyal to the company. In contrast to the CL model, these incentives do not exist in the form of a reward for loyalty, but rather a punishment for a lack of loyalty.
Nestle - more precisely Nespresso - is a perfect example of a lock in. Customers buy a coffee machine that works with coffee capsules. Each supplier produces different capsules - the capsules from Tchibo do not fit in a Nespresso machine and visca versa. This means that the coffee suppliers have, so to speak, a coffee monopoly over all the users of their coffee machines. This gives them the opportunity to increase their own prices and customers will not jump off up to a certain level - otherwise the coffee machine would no longer be usable.
Business model # 28 Long Tail
- Small cattle make crap too
Instead of focusing on large one-off sales, these companies earn most of their sales from many different small one-off purchases of niche products.
The best example is You-Tube, a company you may have heard of before. With a video or the advertising that is placed on this video, the company hardly makes any sales. Also, individual videos are usually not clicked many millions of times because most of the videos are niche products. But if your users upload around 400 hours of video material to your platform every minute, then small cattle also make crap (and not too little).
Business model # 29 Make more of it
- Multiplication of competencies outside of the core business
A company's assets are often only used for the production of its own products. Often, however, the cooperation with companies in completely different areas - i.e. the multiple use of one's own assets - can lead to major additional sales influences.
Amazon used its knowledge in dealing with huge amounts of data and created the Amazon Web Services business unit from this, which incidentally is growing even faster than the original retail business of Amazon. We have already presented other reasons why Amazon is so successful in a podcast.
Business model # 30 mass customization
- Individuality off the shelf
One model that has become increasingly popular, especially in the last few years, is mass customization. With this model, customers can adapt products to their needs without having to buy large quantities or the like. Innovations in production technology with which it is possible to individualize the individual products in a mass production, this model can be scaled and implemented at reasonable prices.
A well-known example of the mass customization model is MyMuesli, a German company. As an online shop, the company started offering the individualization of muesli and already has shops in various department stores and cities. I also use this principle for my individual CrossFit T-shirts.
(The phenomenon of mass customization can also be seen in advertising. While TV advertising is switched on so that every customer sees the same thing, Facebook advertising can, for example, be tailored precisely to individual target groups.)
Business model # 31 no frills
- Anything but expensive
This model is about simply offering the product cheaply, even if the quality suffers. With this model, one primarily addresses a large mass market.
Kik, the retailer that mainly focuses on clothing items, is a typical no frills (frills) company and offers the products incredibly cheaply, which is also the company's USP.
Business model # 32 Open Business Model
- Leverage effects through collaborative value creation
In this model, a major source of value is building synergies through partnerships. Companies that use this model are always looking for new ways to add value to work with suppliers, customers or other actors in order to strengthen their own company.
Valve Corporation, an American IT company with a focus on software development, which, among other things, is the company behind Steam (one of the largest digital game publishers), is based on an open business model. For the company's first game called Half-Life, the company brought out a free “program” with which game-loving programmers were able to program new content for the game right from the start. For the users this was the chance to help shape the game according to their wishes and for Valve there was free software development.
Business model # 33 Open Source
- A free solution together
With this model, everyone can freely use the product - which is mostly software - and usually also work on it. Such companies often generate their sales through consulting services or other services that are offered as a complement to the free product.
A very exciting if not very well known company that uses this approach en masse is the US company Local Motors. The company uses crowd-sourcing for the design of its own vehicles and the resulting vehicle plans are published open source. The company only redesigns the outer components, i.e. the body, and uses parts from established automobile manufacturers for the rest.
The company currently produces around 50 cars per year in a small workshop. The founder's vision is to build up a network of small workshops in which customers assemble their cars themselves, with the help of the company's specialist staff.
Business model # 34 Orchestrator
- Directing the value chain
This concept is in stark contrast to the one discussed earlier Integrator-Model. With this model, the company focuses on only one core strength and sources the rest, with the outsourced layers of the value chain being actively coordinated. The purpose of this model is to reduce costs through specialization and thus benefit from economies of scale. In addition, by focusing on just one step in the value chain, this one step is perfected.
Nike brought this model to perfection. The basic idea of the company was to simply import shoes from Japan and sell them in the USA. Based on this basic concept - which was then as now based on outsourcing - the founder Philip Knight built the largest sporting goods manufacturer in the world with a turnover of 32 billion euros in 2016.
Business model # 35 Pay per Use
- Usage-dependent remuneration
This model is primarily aimed at customers who value increased flexibility. Instead of fixed amounts that you have to pay in order to be able to use a product indefinitely, you only have to pay when you actually consume it. Although this is often more expensive than a flat rate with high consumption, if you only need a product very irregularly, a pay per use model is worthwhile for the customer.
Car2Go is the perfect example of the pay-per-use model. After a one-time registration with a small fee, you can use the Car2Go cars in any city, but you pay for every kilometer you drive. But the advantage is - if you don't drive you don't pay anything.
Business model # 36 Pay what you want
- Pay how much it's worth to you
This model, which is still very much in its infancy, is becoming more and more popular, especially among young start-ups. With this model, the reason only has to pay what is worth the service to them. While one would generally believe that with such a model one would go bankrupt immediately, it works surprisingly well.
One of America's most famous economic podcasts called Freakonomics is based on exactly this model. The host of the - by the way very recommendable - podcast Stephen J. Dubner offers the listeners to pay an amount into the company's account at regular intervals, namely the amount that the listener perceives as appropriate to performance.
Business model # 37 Peer to Peer
- From human to human
Another model based on humanity is the Peer 2 Peer model. This model is based on reviving the old principle of direct barter. Consumers offer their products to other consumers and not companies as is normally the case. This model is usually much cheaper than traditional business models and increases the efficiency of the economy.
The best example of a P2P company is Airbnb. The start-up, founded in 2008, is a platform on which private users can rent their homes (whether rented or bought) to strangers for a short time. This replaces the hotels and instead of the situation where a company sells accommodation to a consumer, another consumer does it. You can find a video about the creation of AirBnB here:
Uber, the US taxi company that is transforming the transport industry, is also based on a P2P principle and with a valuation of around 70 billion is valued higher than BMW.
Business model # 38 Performance-Based Contracting
- Results-based remuneration
In this model, the product price is not based on the physical value, but on the performance and the value that the product brings to the customer. Companies with such a model usually work very closely with the customer and can often charge quite high prices, with both the customer and the company agreeing.
When you think of Rolls Royce, luxury sedans first come to mind, but in fact Rolls Royce is also and above all an aircraft engine manufacturer and has a very exciting business model in this area. In normal industry contracts, it is common for the engine manufacturer to be paid if there is a problem with the engine after it has been repaired. Rolls Royce has a completely different system and that is, the company is paid to ensure that the engines are never left idle and that they are constantly maintained. This better combines the interests of the customer with those of the manufacturer and strengthens the customer relationship.
Business model # 39 Razor and Blade
- hook and bait
Hooks and bait, coffee maker and capsules or razors and razor blades - all of these things are based on the same system. The customer buys a machine / device from a supplier at an amazingly low price. In order to use the product, however, he must regularly buy operating supplies from the provider.
The cheapest Amazon Kindle device costs less than 50 euros. The intention behind the low price is not to promote reading culture. No, in order to read a book on Kindle you have to buy it first from Amazon (with a few exceptions) and Amazon earns money with each of these purchases - which brings us back to the small-cattle-do-shit-model.
Business model # 40 Rent instead of buy
- Paid, temporary right of use
A model that is ubiquitous in real estate is also gaining ground in other industries - the rental model. Especially if you don't have the time to mess around with the maintenance and safekeeping of property or you simply have no money - then this model is very suitable for customers. Companies have the advantage of earning much more in the long term with this model than if the customer simply bought.
When you think of renting, real estate, cars or maybe even sports equipment come to mind, but most likely no pets. But that's exactly what you can rent from the US company Flexpetz in Los Angeles and San Diego. For example, very busy dog lovers can register with the club for 39 euros a month, paying an additional fee per day with a dog. Sounds crazy - but it works - at least if the founder Marlena Cervantes has her way.
Business model # 41 revenue sharing
- Symbiotic profit sharing
This model is about important stakeholders of the company, such as suppliers or companies with which one is otherwise in a partnership, to motivate further cooperation and to strengthen the relationship through a share in the turnover.
Apple has implemented this model in its app store, for example. When developers make money with an app for iOS, Apple owns 30% of the revenue. This is also completely logical for the developers, as they would never be able to address so many users without the platform. For Apple, the developers again offer free content that makes their own product more attractive. Both companies benefit from this so you can really speak of a symbiosis through merger - one of the many reasons why Apple is so successful.
Business model # 42 reverse engineering
- Rapid learning from the competitor
With this model, companies do not focus on new innovations, but on copying the competition. This model can even create added value for the customer. Since the companies only copy and do not have to invest money in their own research and product development, they have the opportunity to sell the products at a lower price than the company that originally developed the product.
One company that has made a name for itself for copying ideas is Rocket Internet. The German internet company founded by the Samwer brothers often just goes about setting up new start-ups and finding new ideas, implementing the ideas that work in one country in another.
Business model # 43 reverse innovation
- Learning of the simplest solutions
This reverse innovation model is about adapting products developed for richer countries and regions such as Europe and America to lower standards.In this way, the products are developed more cheaply and efficiently in order to make them affordable for people in developing countries.
The Finnish mobile phone company Nokia is not exactly the reflection of a successful and innovative company. But it should not be forgotten that before the evolution of smartphones, the company was one of the leading mobile phone providers in the world. And even if the company has meanwhile sold its mobile phone division to Microsoft, it has done a lot right. Among other things, it has developed a 5-dollar mobile phone for India under the reverse innovation model. It was one of the first companies to venture into such poor countries in the mobile phone sector.
Business model # 44 Robin Hood
- Take it from the rich and give it to the poor
This model offers exactly the same products at different prices. The product is a little more expensive for rich customers than for poorer customers. As a result, a large part of the turnover comes from the richer customers who subconsciously support the poorer. A system in which companies make profits, the poor are supported and the rich can feel good because they support poorer ones.
The US company TOMS Shoes, founded in May 2006, helps people in a poor country such as India or Honduras with every product they buy. For example, the company gives away a pair of shoes for every pair you buy yourself.
Business model # 45Self service
- The working customer
Basically, customers are lazy and everything that makes life easier for customers is a positive plus point for any company. There is only one exception and that is the customer is not lazy when it comes to money. So if you offer a product cheaper than the competition, but with a slightly poorer service, it is often very well received on the market.
If I had to get the food myself at a posh restaurant, the company would have seen me for the last time, but at McDonalds I don't care. This is simply because I eat ten times at McDonalds for the money I need once in a posh restaurant.
Business model # 46 shop in shop
- Symbiotic piggyback
In this model, the operator of a physical store uses its remaining capacity to get a subtenant on board. This gives the sub-tenant affordable retail space and the company no longer has to bear the cost of the store on its own. In addition, further synergies can arise if, for example, the customer comes into the business of one company and quite accidentally comes across an offer from another company.
The Austrian clothing brand Vresh has integrated a tailor in its showroom branch, which on the one hand can save costs and on the other hand creates synergies in the form of customers who come across the tailor through Vresh and vice versa.
Business model # 47 Solution Provider
- "Everything from a single source" provider
If you take everything from one source, everything goes into one source - and that is exactly the advantage you have when you are active as a solution provider. A solution provider is a company where you can get all the products you need for a specific purpose. As a result, the company has an enormously high customer value and the intensity of customer loyalty increases.
Steve Jobs, the notorious founder of Apple, was convinced of the solution provider's system. This can also be seen in the products for which Apple was the only provider with its own charging cable connection for a long time. The message behind it: The customer buys everything from us, the hardware, the software and also the charging cables.
Business model # 48 Subscription
- Subscribing to services
The subscription model has become increasingly popular, especially in recent years. The reason for this: Customers are lazy and encouraging this laziness is well received.
This gives companies the advantage of a steady flow of sales and strong customer loyalty. In addition, the model, especially with regard to software, has the advantage that the company is constantly improving the product and the customer's product is constantly being developed without having to pay more.
The American company Dollar Shave Club, founded in 2011, has revolutionized the shaving industry with the subscription model. The company sends you new razor blades and accessories every month. The money is automatically debited from the account and the customer never has to worry about his shaving utensils again.
Business model # 49 Supermarket
- Large selection, small prices
This model should be familiar to pretty much everyone. The companies offer a huge selection at reasonable prices, which is made possible by economies of scale across the entire company, which are usually several hundred branches in size - which usually allow hundreds of branches.
Aldi is one of the most successful retail chains in Europe (and meanwhile also on other continents) and manages to offer products from mangos to laptops cheaply and with good quality through economies of scale.
Business model # 50 Target the Poor
- Customer at the foot of the world income pyramid
In this model, the target audience for businesses is not the people with the most money, but those at the other end of the food pyramid. Although the company generates a low turnover per customer, it has all the more customers.
Bharti Airtel, an Indian telecommunications company, has focused on services for the lower classes of society since it was founded in 1995.
Business model # 51 Trash to Cash
- Monetization of waste
Resources in the economy and this world are limited, which is why it is important that they are recycled. This is exactly what companies do with this model and can thereby eliminate their purchasing costs to a minimum or often even completely. Used products are collected and either sold in other parts of the world or processed into new products. Companies often even have the advantage that customers pay more if they know that a product is made from recycled material.
Emeco, a US company that focuses on designer furniture, especially chairs, manufactures its own chairs from recycled material and then sells them for prices of up to more than 1000 euros per chair.
Business model # 52 Two-Sided Market
- The attraction of indirect network effects
The bilateral market model can boast of having produced three of the 5 largest companies on earth. With this model, the company - which is always some kind of platform - becomes more attractive to customers when there are more providers on the platform and more attractive to providers when there are more customers on the platform. Once you get the stone rolling, growth is almost unstoppable, which is also illustrated by the statistics mentioned above.
The more people use Facebook, the more attractive the platform becomes for people who create content such as texts or videos. The more people or companies create content, the more attractive Facebook becomes for normal consumers. An increasing number of customers then in turn triggers an increasing number of advertising partners and content providers and so on and so forth.
Business model # 53 Ultimate Luxury
- More than more strategy
With this model, companies focus exactly on the opposite of the target the poor method and thus on the top of the global wealth pyramid. The exclusivity and reputation associated with the company's brand are the main reasons that customers buy the product. With such a model, astronomical prices can be charged and, in turn, very high margins can be generated.
Lamborghini is the perfect example of the ultimate luxury company. Anyone who buys one of the hundreds of thousands of heavy cars is not buying a car but a status of unbelievable wealth. This enables the company to achieve unbelievable sales and profits in the millions, even with small quantities. The problem with the model is that scalability is lacking from a certain point, so a company like Lamborghini earns a lot of money but the turnover of around 10 million euros is very small compared to other well-known car manufacturers.
Business model # 54 user designed
- The customer as an inventive entrepreneur
With this model, companies allow customers to set their first entrepreneurial initiatives and to get a taste of self-employment. The company benefits from the creativity of the users and becomes more attractive with every new successful product. Users have the advantage of being able to take their first steps into entrepreneurship easily and at virtually no cost. The suppliers have to produce the products and make the sales platform available, but they can earn a few percent on every sale and, as we have already learned: small cattle also make crap!
Many in the entrepreneur channel community were the first to design T-shirts on the Teezily platform, and they did so very successfully. Some have built up a nice extra income and others have tasted blood for the first time with this project and are already active in completely different areas. You can find out more about the method in this video.
Business Model # 55 White Label
- Private label strategy
A white label producer allows other companies to sell their own products under their own brand. Customers can sell their own branded products and white label producers can sell their products in a wide variety of industries.
The Foxconn Technology Group is the largest white label manufacturer of technology products worldwide with its 1.3 million employees. The company is based in Taiwan and has been selling a wide variety of technology products to its customers since 1974, which they can then print with their own brand. The result is probably right in front of you (your laptop) or you are holding it in your hand (mobile phone / tablet). By the way, you can find out how you can do this for yourself in this playlist.
Source (book): Develop business models: 55 innovative concepts with the St. Gallen Business Model Navigator by Oliver Gassmann, Karolin Frankenberger and Michaela Csik
Which model do you think has the greatest chance of success? Write it in the comments!
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