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Most used digital business models

POR Hispanic Entrepreneurs November 01, 2021
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The digital transformation opened a range of possibilities in the business sector that have been able to satisfy the demands of customers and the market. If you are thinking of starting a business Hispanic Entrepreneurs tells you what are the digital business models most used.

What is a business model?

It is the way in which a company creates, delivers and captures customer value. That is to say, is a tool that will allow you to define what you are going to offer to the market. How are you going to do it, who are you going to sell to and what will be the way to generate income.

It goes beyond making money because it also discovers who the customers are and talks about how to reach them. In addition to what things you have to do to give them your value proposition and the cost structure you will have. In short it is the total vision of the business.

It is defined by three elements, profitability, scalability (which conquers the market) and repeatability (which can be replicated). Determining your business model will help you to know how it is made, how it can be modified, polished or molded.

Meanwhile, digital business models are those that apply to companies that operate online and take advantage of technology to improve their services. To give value propositions and monetize.

Most used digital business models

With the changes in digital business we have seen the development of some sectors such as the media. As well as airlines, tourism or financial intermediaries, but which digital business models are the most used?

Here are some of the business models that stand out:

1-Enterprise

It is based on the sale of services or software to other businesses under a single use license. Contracts generally have fixed and temporary terms of use. They are renewed from time to time. An example of this type is KPMG and other large consultancies.

2-Subscription

It is one of the most developed after the popularity of the internet in the new millennium. It is about selling a product or service to customers for a recurring payment. If you do not cancel it, you will not have access to it. They target customers directly, not so much other companies as entertainment services: Netflix, HBO, and Amazon Prime.

You have a fixed customer base for a period of time and a continuous stream of predictable income because they are paid in advance. But to stay on top they must offer original content which makes them spend a lot of money to produce it.

3-SaaS (Software as a Service)

It is a variation of the subscription model, it is more associated with companies or startups. Customers also have to pay an amount for the service. Nor they pay for the software, but instead pay to use it. The supplier will be responsible for maintaining its proper functioning. Clear examples are Zoom, Shopify, Asana, Google Docs and Microsoft Office 365, etc.

4- Transactional

They are the ones that generate income through the billing of commissions for the use of their platform. These models are usually used by finance or banking companies.: PayPal, Skrill or Stripe, which charge a commission for each operation that is carried out.

5-E-commerce

It is the one that is dedicated to the sale of products online and that is increasing. Every day more successful online stores appear, a trend that the big brands have joined.

It's easy to implement and you don't need a large investment to get started. Use the website or social media to make transactions and reach the consumer. It is key for entrepreneurs. Amazon, Dell, eBay, and ThinkGeek are successful examples of this model.

6-Freemium

Offer a free product or service to get hooked and take their paid service giving additional advantages. I mean, it's a double offer, but good content is reserved by calling it Premium. This attracts a large number of users to use the service for free.  

It shows them through marketing strategies the benefits they can obtain if they hire the paid one. Google Drive, Candy Crush, Pokemon Go, and Spotify are Freemium models.

7-Marketplace

They are distinguished by putting in contact the parties (client and bidder) who will participate in the transaction of products or services. This contact occurs without an intermediary. You must be very attentive to the demands of the market. For example LinkedIn, Uber, Airbnb, Ebay, etc. Some are funded by advertising and others charge a commission for each transaction.

8-Open source

They distribute free software to create large communities composed mainly of specialists such as programmers and collaborating developers. They are seen a lot on mobile devices with free operating systems, cloud platforms, web servers, and educational platforms.

To make it profitable they offer products or services associated with said software and even by subscription like Red Hat.

Also famous are Talend, Hortonworks, DataStax, Cloudera, Elastic, GitHub, Databricks, and SugarCRM.

9-Online services

It offers professional services through the internet. Coach, consultant, therapist, instructor are those who are called to use this model. They must work on their personal brand, create a website and implement strategies to attract customers. A case of success is that of the celebrity and business coach Karen Hoyos with her company Dios Sabe Vender.

10- Dropshipping

It is a model that allows entrepreneurs to sell products without the need to have a stored stock. Through this, third-party products are offered on their own platform such as e-commerce.

The difference is that that third party will be the one that sends the merchandise directly to the customer. It is a kind of middle man that focuses only on marketing. AliExpress is based on this model.

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