Choosing the Best Online Business

Nov 10, 2024

An Action-Based Guide

Choosing the right online business model is key to building a successful business that suits your skills, lifestyle, and financial goals. Whether you’re new to the online business world or seeking to pivot, this guide will help you make informed decisions. We'll cover the most popular online business models, provide real-life examples, and suggest actionable steps and resources to help you on your journey.


Step 1: Define Your Goals and Skills

The first step in choosing an online business model is understanding your goals and skills. Ask yourself:

  • What are my financial goals? (Side income, full-time business, or passive income?)
  • How much time can I commit?
  • What are my technical skills and strengths? (Design, writing, marketing, etc.)
  • Do I have specific passions or niche interests?

Action Step

Write down your answers to these questions. This process will guide you toward models that match your unique situation.


Step 2: Explore Popular Online Business Models

Once you know your goals and strengths, evaluate different models. Here are some popular ones to consider:


1. E-Commerce Store (Product-Based)

In an e-commerce model, you sell physical products directly to customers through an online store. You could sell on platforms like Amazon, Etsy, or your own website.

Pros

  • Tangible products with potential for high profit margins
  • Build a recognizable brand
  • Opportunities for scaling

Cons

  • Inventory management can be challenging and costly
  • Shipping, handling, and returns management
  • High competition

Real-Life Example

Consider someone passionate about camping who starts an e-commerce store, “CampingGrejor.se,” selling camping gear like tents, apparel, and mugs. They start with a niche, targeting outdoor enthusiasts in their region, which allows them to stand out from larger outdoor stores.

Action Step

Try brainstorming product ideas using a tool like Google Trends or Amazon’s Best Sellers to see what's popular. Explore how to set up a Shopify store, or consider using print-on-demand (POD) for minimal inventory.


2. Affiliate Marketing

With affiliate marketing, you promote other companies' products and earn commissions on sales generated through your unique links.

Pros

  • Minimal startup costs
  • No need for product creation or inventory management
  • Scalable with content creation (blogs, social media, YouTube)

Cons

  • High competition in popular niches
  • Earnings are often lower than direct product sales
  • Income can be inconsistent, relying on traffic and engagement

Real-Life Example

Let’s say you create a blog under the domain "Foodlover", where you review various health and wellness products, including supplements, workout gear, and recipes. By incorporating affiliate links to the products you mention, you can earn commissions on each sale. You’ll also have the flexibility to promote different products over time.

Action Step

To start, list topics or products you’re passionate about and research affiliate programs (e.g., Amazon Associates, ShareASale). Start a blog or YouTube channel focused on this niche and create valuable content around the products you’re promoting.


3. Digital Product Sales

Digital products include e-books, courses, design templates, checklists, or any downloadable item customers can use immediately. The appeal of digital products is their scalability and low overhead.

Pros

  • High profit margins
  • No shipping or inventory
  • Potential for passive income

Cons

  • Initial setup requires significant effort and time
  • Need to continuously update and improve products for competitiveness

Real-Life Example

Consider creating and selling digital checklists for motorhome users. You could compile information about maintenance schedules, travel checklists, or recommended gear, and market it to a niche audience of camper van enthusiasts. This approach focuses on creating something useful and reusable for customers.

Action Step

Create a list of digital products you could develop based on your skills or knowledge. You might use design tools like Canva for templates or Gumroad for e-books and checklists. Test ideas by pre-selling a digital product or collecting feedback through social media or online communities.


4. Online Course Creation

Selling online courses is ideal if you have specialized knowledge or skills. Courses can be in video, text, or interactive format, covering everything from coding to painting.

Pros

  • High profit margins
  • Passive income potential after setup
  • Builds authority in your field

Cons

  • Requires time investment to create high-quality content
  • Needs regular updates and support for students
  • Requires effective marketing

Real-Life Example

Imagine launching an entrepreneurship course aimed at helping beginners start online businesses. Your course could focus on the fundamentals, guiding students through business planning, marketing, and initial sales strategies. This model works well for creating lasting impact while generating revenue.

Action Step

Define a topic you’re knowledgeable about, then outline a course curriculum. Use platforms like Teachable or Udemy to publish your course. Test your idea by offering a webinar or mini-course for feedback before investing in full course production.


5. Subscription Boxes or Memberships

Subscription-based models provide customers with recurring shipments of products or access to exclusive content. This model offers predictable, recurring revenue, especially if your offerings have a high retention rate.

Pros

  • Predictable monthly income
  • Builds a community of loyal customers
  • Higher customer lifetime value

Cons

  • Requires regular content updates or new product curation
  • Complex logistics for product-based subscriptions
  • Relies on customer retention to be profitable

Real-Life Example

Consider a membership model for Happytaste, where members pay for access to exclusive health and fitness content, such as workout plans, recipes, and weight loss tips. This could create an engaged community, driving recurring income and brand loyalty.

Action Step

Brainstorm exclusive content or products you could provide regularly. Validate your idea by offering a “pilot” membership to a small group and gathering feedback. Test platforms like Patreon or Substack for easy membership management.

Conduct Market Research

After choosing a model that fits your skills and goals, conduct market research to ensure demand.

Actionable Tips

  • Keyword Research: Use tools like Google Keyword Planner or Ahrefs to find popular keywords related to your niche.
  • Social Listening: Check Reddit, Facebook groups, and Twitter for trending topics and discussions in your field.
  • Competitive Analysis: Study successful competitors. Look at their pricing, customer reviews, and social media presence. Tools like SimilarWeb can help analyze website traffic and sources.

Where to Find Sources

Explore resources like:

  • Trends.co for emerging business ideas.
  • Google Trends for keyword popularity.
  • Niche-related blogs and podcasts for insights on successful strategies.

Validate Your Business Idea

Validation is crucial to avoid investing in an untested idea. Here are some effective ways to validate:

  • Pre-Sell the Product: Offer early access to your product or service at a discounted rate to gauge interest.
  • Surveys: Use Google Forms or SurveyMonkey to ask your target audience if they would be interested in your idea.
  • Social Media Tests: Share your idea on LinkedIn, Instagram, or other platforms to gather reactions and interest.

Develop a Minimum Viable Product (MVP)

Create a simplified version of your product to test in the market. For instance:

  • For an E-Commerce Store: Launch with just one or two products.
  • For a Digital Product: Start with a free or low-cost version to attract customers and gather feedback.
  • For an Online Course: Run a “beta” version with a limited audience to get feedback and improve your material.

Resources for Building an MVP

  • Shopify or WooCommerce: For simple e-commerce stores.
  • Canva and Gumroad: For creating and selling digital products.
  • Teachable and Kajabi: For online course creation.

Market Your Business

Effective marketing is key to growing your online business. Choose a marketing strategy that fits your product and audience:

  • Social Media Marketing: Use Instagram or Pinterest for visually-driven products.
  • Email Marketing: Collect emails from your audience to build lasting relationships. Tools like MailChimp or ConvertKit can help.
  • Search Engine Optimization (SEO): Focus on keywords that your potential customers search for to drive organic traffic.

Conclusion

I myself know what it can be like to be a beginner in a completely new industry. I flew from flower to flower, not knowing where to put my energy.
For me, the rescue was Groove.cm. There I could try and practice all the above ways of making money online. I can write courses, build a webshop, and sell both physical products and digital products, try affiliate. I could test building an automated email system and much more.
Also, I don't have to pay for a bunch of different programs to use everything I wanted to test.

I think you should at least take a closer look at the collection of programs gathered in one place to get an idea of ​​this. Here's the link: Groove