business model a plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing. it describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts.
In this article, we will introduce The types of business model for entrepreneurs.
Types of Business Models
Manufacturer takes raw materials and creates a product. A manufacturer can also assemble pre-made components into a product. A manufacturer may sell its products directly to its customers, or it can outsource sales to another company. an example of this type is Dell Company.
Distributor is any business that purchases products directly from a manufacturer for resale either to retail outlets or directly to the public. The distributor’s main function is to route secondary, or high voltage, current from the ignition coil to the spark plugs in the correct firing order, and for the correct amount of time. an example of this type Tupperware.
Retailer purchases product from a distributor or wholesaler, and then sells those products to the public. the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit.an example of this type Macy’s.
Franchise can be a manufacturer, distributor or retailer, depending on what type of franchise you purchase. the franchisor licenses its trade name and its operating methods to a person or group operating within a specific territory or location, which agrees to operate its business. an example of this type Pizza Hut.
there are various other ways of structuring your business model.
- A company that integrates a physical and an online presence. An example would be a retailer who allows customers to order products online but lets them pick up their order at their nearest store.
- A company that deals with customers directly via the internet without engaging an intermediary.
- Direct selling to consumers making use of product demonstrations in the person’s home, for example. There are several cosmetic and jewelry companies that use this model in SA.
- The Freemium business model works by offering a basic Web service or product, for free, while charging a premium for advanced or special features.
- Online auctions, which are held over the internet.