Rank online business models in terms of scalability

4 replies
Hi all, according to your knowledge/experience, how would you rank the various types of online businesses in terms of scalability? Affiliate marketing / online store (physical/digital products) / services (SEO/web design/development), etc?
#business #models #online #rank #scalability #terms
  • Profile picture of the author kilgore
    You're right that some business models have greater potential for scalability than others. You just don't seem to know what a business model is.

    Affiliate marketing isn't a business model, it's a revenue stream. Revenue streams are naturally a crucial component of a busines model, but they are far from the whole thing. In fact, you can develop all sorts of business models that monetize (at least partially) with affiliate marketing, some large (such as Kayak.com or Goodreads.com) and some small (such as your typical, so-called Amazon review site).

    Online stores and services likewise aren't business models. They're business activities. Like revenue streams, business activities are crucial components of a business model; but again, they are far from the whole thing. And again, there are e-commerce sites and services with high potential for scalability (see Amazon.com) and e-commerce sites with low potential for scalability (see pet-racoons-with-rabies.com).

    The reason I'm being a little pedantic here is because you seem to be under the impression that you just pick out a business model as if you were ordering dinner off of a restaurant menu. But a business model isn't something you pick, it's something you develop.

    And what makes a business model scalable isn't just the revenue streams you have or the business activities you engage in. Scalability is also affected by your customer segments, your channels, your partners, your resources and everything else that makes up a business model. For instance if your primary customer segment is Blackberry phone enthusiasts under the age of 18, my guess is you'll have limited scalability prospects whether you use affiliate marketing, run an e-commerce site or provide a related service.

    The good (and bad) news is that you are developing your own business model there are things that you can do to make it more (or less) scalable. And fundamentally scalability is more about the interplay of the components of your business model than the characteristics of any one component on its own. This is where developing a business model gets creative -- and fun! Unfortunately, it's also not as easy or mindless as just making a blanket statement about which business activity or revenue stream is more scalable -- but if you wanted to do something easy and mindless what to do you would have bought a paint by numbers set, not decided to start a business, right?
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  • Profile picture of the author Steve B
    Originally Posted by andr3w84 View Post

    . . . how would you rank the various types of online businesses in terms of scalability?

    To me, there is no good answer to your question. Any and every business model can be scaled. The differences are not in the model, but in the person (or team) that's doing the scaling. The differences are in the mind, resources, and effort of the one (or several) growing the business.

    You seem to be assuming that we are all equal at scaling a business and the only variable is the business model itself. Really, the difference maker is the brainpower (that plans the execution), resources that can be directed to the scaling, and the effort that goes into actually doing the scaling.

    You are the business. The business model is not the business - it's only the way you attack the market and execute your plan. You are the key to success and the determining factor in how well you can scale any business model.

    Steve
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  • Profile picture of the author brettb
    My old software business was scaleable. I know quite a few people who sell stuff on etsy - this isn't usually scaleable unless you buy in the products.
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  • Profile picture of the author shmol
    Both if done correctly can be scaled to make you just about any amount of money that you want to make.

    The question you should ask yourself is.

    Which one do I like best?

    When you have your answer then go for it.
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