Top 30 Types of Business Models That You Can Adopt For Startup

So, no startups or businesses can start without a business model. I can say that it is the base for any business. 

A business model is a way an organization makes value and money. All the processes and business policies come under the business model. 

It is not just about making money but even about how to make a partnership or how to treat employees and much. In short, I can say that the business model is an all-rounder for any organization.         

But many of us get confused about which business model to go for. So to make you free from that confusion, here I’ve listed the top 30 business models that can help you to cherish your business.       

Types of Business Models

Let me take you to all of them and select the one which suits best for your business. 

1) Peer to Peer Business Model

As the name suggests, it is all about providing a platform for the business to buy or sell their product. Here you work as a third party between the different users and take the commission as per the decided percentage.  The best example we can give here is Airbnb. Wherein the Airbnb takes a commission of few percentages from the users. Another example you can consider here is UBER.      

2) Subscription-Based Business Model

We can define this model as your company sells the same product based on the subscription which is divided over time. The example we can take here is online courses or video streaming channels. Up to some extent, you get the free services but for the premium level, you need to pay some decided amount. The similar business model is followed by Netflix or Amazon Prime.      

3) Hidden Revenue Business Model

Let me start with an example to make you understand better. Facebook & Instagram follows the same business model. The users don’t need to pay anything here. They just enjoy the services. But how this huge platform makes money. The advertisement is the answer to it. You might have noticed the ads being played whenever you open Facebook or Instagram, this is where they generate the revenue. Charging for the ads which the businesses want to display.  

4) Multi-Sided Platform Business Model

This type of platform acts as invisible middlemen between the different users. Consider Linkedin here, the biggest social network platform. Here the hr gets the right candidate for their company and on the other side job, seekers get their desired job. With that learning courses are even part of this business model now. One thing to mark here is the cost of app development for such a platform is quite higher.  

5) One for One Business Model

This business model is like giving away a free product on every product sold. It is a non-profit gesture on every product being purchased. It will be directly given to the charity. The example of it is TOMS shoes, who give away shoes for kids to charity on every product sold. Over a long time, this company became much profitable as it improves the brand identity in the mind of customers.    

6) Freemium Business Model

We all are attracted to the term “Free”. The freemium model is something similar to it. Here, you are allowed to use a service for free up to some time and later it will be paid one for the lifetime. For instance, the anti-virus software is free for the first three months and later it is paid for the lifetime. There are a lot of applications built with a freemium business model.       

7) Affiliate Marketing Business Model 

In this business model, it is like you will get the commission when a product of the third party is sold through you. You can have a website where you can showcase the third party product and when the user clicks it, they are redirected to the original website. If the product is purchased through this click then you will get the commission. Amazon runs the biggest affiliate marketing business model.   

8) Consulting Business Model

Consulting contains major business revenue. Here, you need to hire talented people and make them work on various projects of your clients. The biggest consulting company across the globe is Accenture. Their consulting business model contains services from the financial sector to communication to even the government sector. The fees paid by the client can be on an hourly, daily or monthly basis.    

9) Direct Sale Business Model

It is one of the most common types of business models. Direct sales is still a choice of many of the huge companies across the world. Pharma industry is ruling the direct sales business model as they build a long term relation with the customers. Sometimes a human involvement is a must in the business rather than technology. It especially applied for the pharma industry.  

10) Razor and Blade Revenue Business Model 

Compare this business model with razor and blade, where we can say that razor is a one time purchase while the blade is a continuous purchase. Hence, the companies will ensure that they get constant revenue by charging the blade at a premium. This was just an example to make you understand the Razor & Blade revenue, business model.   

11) Reversed Razor and Blade Revenue Business Model

It is completely opposite to the above-mentioned business model. Here the business focuses more on Razor rather than a blade. To make it more clear let me give you an example of Apple, which charges very high for the products but a very low cost for iTunes. So, here the Apple which is the purchase of one type but is much more expensive than the normal prices.

12) E-commerce Business Model

We all agree to the fact that the term Amazon has become a synonym of E-commerce. It is the biggest example of e-commerce with $24 billion. The cost of app development for e-commerce is comparatively lesser and even avoid a lot of traditional costs. In this technological world, everything is getting online especially shopping. Hence, there is no wonder why Amazon became such a success with this business model.            

13) Agency Based Business Model

It is a project-based business model, where you hire an outside firm to complete a specific task. On the same way, businesses hire various agencies to complete a few tasks which the inhouse team is capable. Here agency means advertising, survey, promotion, marketing, developing, social media and much more.         

14) Franchising Business Model

Franchising is the one which is trending these days. Here all one need is capital investment. The biggest franchise around the world is McDonald, Subway, KFC and more. The business owners can adopt the business model of the franchise they buy and in return pay them the rewards. McDonald has 93% of the franchise worldwide.   

15) Privacy as a Business Model

Privacy has become the biggest need in today’s world. That’s why platforms like Facebook, Snapchat, Google are adopting the privacy business model. It allows users to control privacy as per their requirement. Another example that I can say here is Duckduckgo that allows users for private navigation.     

16) Attention Merchant Based Business Model

The business here will generate revenue with the help of human attention, thus it is called attention merchant based business model. It works on grabbing the attention of the users. The main aim here is to keep users engaged in an advertisement. In the same context, Facebook has now started displaying the video advertisement in between.        

17) User-Generated Business Model

This type of business model completely works on the user-generated the content. Here people come to your website or application to get the information or share the knowledge on various topics. The example you can consider here is Quora- A question & answer platform or a Wikipedia where the users can edit or read the article.   

18) Multi-Brand Business Model

Many businesses these days want to serve all the categories of people. And this is where the multi-brand business model came to the picture. For instance, not everyone can afford the Puma shoes, hence many retailers now keep multi-brand shoes. Few big examples of such multi-brands are Lifestyle, Shoppersstop, etc. In short, marketing more than two products is known as a multi-brand business model.      

19) Direct to Customer Business Model

Such a business model is about directly reaching to the customers without any third-party integration. It is followed by many big firms from a long time. These companies will plan a huge marketing campaign which evolves user engagement. Ultimately, this business model increases the brand value and visibility among the customers.     

20) Instant News Business Model

We all are always keen to know about what’s happening around the world. And that’s what instant news business model is all about. You can get a clear idea about it with the help of the example. Twitter is the most popular instant news business model you can think of. Here users just need to check the trending hashtags to know the current news.    

21) Educational Niche Business Model

It is a business model that is specially designed for the education industry. It charges a premium to the users who want to enroll in online courses provided by them. The most valuable startup which followed this business model is Byjus. Other examples are Udmey, Udacity etc. Many institutes have started following education niche business models to increase their brand value.     

22) On-Demand Subscription-Based  Business Model

Remember the time when we used to wait for our favourite shows to get telecasted on the TV. But with video-streaming apps like YouTube, we don’t need to wait to watch our favourite shows. In the on-demand subscription-based business model you need to buy a subscription for the TV shows you would like to watch. You can stop using it whenever you wish too.   

23) Blockchain-Based Business Model

The advanced technology of blockchain has completely revolutionized the way transactions happen these days. And many cryptocurrencies like bitcoin, litecoin, Zcash are using a blockchain-based business model.    

24) Distribution-Based Business Model

A distribution-based business model is where a company completely depends on the few key distribution channels. Here I can say that almost every company comes under this business model as no business can survive without distribution. You can understand this business model with a below-given image. 

25) Family-Owned Integrated Business Model

As the name suggests any business that is run by more than one family member comes under the family-owned integrated business model. Some of the examples of this business model are For, Walmart etc. 

26) Aggregator Business Model

It is a popular business model where a business collects information about a particular service and sell them under their brand name. The relevant examples of this OYO and Zillow. Most of the businesses will go for a single service while selling them under their brand name.   

27)  Pyramid Scheme Business model

This type of business model works on the sole principle where users get rewards in the form of the payment or services if they agree to involve more users in the same scheme. Here it is about involving the users in the scheme not about selling products. The example of the pyramid business model is Amway.  

28) Discount-Based Business Model

You can see such a business model in the giant supermarkets. Where the owner buys the products in bulk and sells them on the discounted rates. You might have noticed a similar thing when visiting any supermarket.      

29) Drop-Shipping Business Model

It is one of the best business models when you plan to start e-commerce with minimum upfront. The business model is cost-effective and really exciting to use. Here business owners contact so many suppliers and retailers in order to sell a product. Whenever an order is placed the products are drop shipped directly from the manufacturer to the customers.       

30) CrowdSource Business Model

CrowdSource business model is a process where the organizations will receive the ideas and services from relatively a large group of internet users. Some of the best examples of this business model are YouTube, Wikipedia, Kickstarter etc.  

Parting Thoughts

So this was all about the best business models you can opt for your startup

There are so many business models except the one mentioned above. But these are the most popular ones in the present time.

Hence, select the one which suits best for your business or startup.  

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