Business-Models-Almanac-The-Big-Book-of-Business-Model-Types-pobplo_141767_1666249900

BUSINESS
MODELS
ALMANAC
The Big Book of
Businesses Types and Their
Business Models
Over 200+ businesses explained
Licensed to Outis Nemo Ltd , barnabas@outisnemo.com

BUSINESS
MODELS
ALMANAC
The Big Book of
Businesses Types and Their
Business Models
Over 200+ businesses explained
BY DANIEL PEREIRA

© THE BUSINESS MODEL ANALYST
The Business Model Analyst is a website dedicated to

analyzing business model types, patterns, and innovations
using the business model canvas as its primary tool. The
site oﬀers a wide variety of free and premium content,
including digital products such as PDF tools, presentations,
spreadsheets, ebooks & guides, and much more. Check it
out here.
Daniel Pereira
The Business Model Analyst
Ottawa, ON, Canada
businessmodelanalyst.com

TABLE OF CONTENTS
Introduction 52
.99 Shops (Dollar Store) 53
Accreditation 54
Ad-Free Subscription 56
Add-On 57
Advertising 59
Adware 60
Affiliate Marketing 61
Agency 63
Aggregators 64
All You Can Eat (Ayce) 66
All-Inclusive 67
All-Pay Auction 68
Alliance Model 70
Art Dealer 71
Assembler 73
Asset Sale 75
Auction 76
B2b 78
B2c 80
B2c2b 81
Bait & Hook 83
Bargain Basement (Bargain Bin) 85
Bargain Subscription 86
Barter 88
Bidding Fee Auction 89

Bricks And Clicks Model 91
Bricks And Mortar 93
Broker-Dealer 94
Brokerage 95
Build To Sell Model 97
Business And Employment Cooperative 99
Buy & Sell 100
Buy One Give One (B1g1 Or Bogo) 102
Buying Clube (Worker Co-Op) 104
Car Dealership 105
Careware 107
Car-Sharing 108
Charity Crowdfunding (Donation Crowdfunding) 110
Charity Shop Model 111
Chemical Leasing 113
Classified Advertising Model 115
Clickbait 116
Co-Operative 118
Collaborative Business Model 120
Collective Business Model 121
Combinatorial Auction 122
Commission-Based Model 123
Community Commerce (Pyramid) 124
Community Model 125
Consignment 126
Consignment Sales Model 127
Consumables Subscription Model 128
Consumer Cooperatives 129
Content Community Commerce (Ccc) Model 130
Credit Card Model 131

Credit Union 135
Crowd Business Models 137
Crowd Renting 138
Crowd Creativity 139
Crowdfunding 140
Crowdgifting 141
Crowd Innovation 142
Crowd Knowledge 143
Crowd Labor 144
Crowd Learning 144
Crowdlending 145
Crowdsourcing 146
Cutting Out The Middleman 146
D2c 147
Daily Deals 149
Dealership 150
Debt-Bases Crowdfunding 151
Demand-Side Platform 152
Dematerialised Services 153
Department Stores 155
Destination Club 156
Digital Transformation 157
Direct Selling 158
Directory Model 159
Discount Clubs 160
Diy / Power To The People 160
Donationware 161
Double Auction 162
Dutch Auction 163
E-Procurement 164

Early Exit Strategy 166
Embbebed Finance 167
Embbeded Social 168
Employment Agency Business Model 168
English Auction 169
Equity Crowdfunding 170
Factoring 171
Fair Trade 172
Fast Fashion 173
Financial Intermediary 174
Flash Sales 175
Fractional Ownership 176
Franchising 177
Freemium / Free 178
Freeware 179
Full Stack Model 180
Generalized Second-Price Auction 181
Gift Card Business Model 182
Group Buying 183
Hire & Leasing 184
Honor System 185
In-App Purchases 185
Intermediation 186
Japanese Auction 187
Landlord Model 187
Lead Generation 188
Lending Club 189
Licensing 190
Litigation Crowdfunding 190
Loan Sharking 191

Long Tail 192
Low-Cost 193
Low-Cost Carrier 194
Loyalty 194
Made To Order 196
Mafia 197
Marketplace 198
Mass-Customization 199
Merchant Model 199
Metering 200
Micro Credit 201
Micro Loan 202
Microfinance 203
Microfranchising 204
Monopolistic Business Model 205
Multi Business Model 205
Multi-Level Marketing 206
Multisided Or Two-Sided 207
Multiunit Auction 208
Music Streaming 208
Name Your Own Price 209
Network Effect 210
No Frills Model (Discount Or Budget Model) 211
Omni Channel 212
On Demand Workforce Business Model 213
One Deal A Day 214
Online Business Models (E-Business Model) 215
Online Marketplace Business Model 215
Online2offline Commerce 216
Open 217

Open Innovation 218
Open-Source 219
Ott 220
Outsource Model 221
P2p 222
Pawn Shop 223
Pay Per Click 224
Pay Per Performance (Pay Per Result) 225
Pay What You Can (Pwyc) And Pay-What-You-Want (Pwyw)
226
Pay-As-You-Go Model (Payg) 227
Pay-Per-Use Model (Ppu) 228
Payment Gateway (Or Payment Intermediaries) 229
Paywall 230
Peace Of Mind Model 231
Peer To Peer Lending 232
Penetration Pricing 233
Penny Auction (Bidding Fee Auction Or All-Pay Auction)
234
Performance-Based Advertising 235
Pipe 236
Platform (Intermediation Or Marketplaces) 237
Pop Up Stores 238
Post Paid Model 239
Ppp 240
Premium 241
Prepaid Model 242
Price Discrimination 242
Price Skimming 244
Private Club Model 245
Private Label 246

Private Shopping Club 247
Product Bundling 249
Product Service System Model 249
Product Subscription 251
Produtized Service 252
Proof Of Payment 253
Pyramid Scheme 254
Razor And Blades Business Model 254
Rent Subscription 256
Rent To Own 256
Rental Business Model (Renting) 258
Retailer Cooperative 258
Revenue Share 259
Revenue-Based Financing 260
Reverse Auction 261
Reverse Factoring 262
Reverse Logistics 263
Ride Matching 264
S2p 265
Saas 266
Sampling Subscriptions 267
Scan Based Trading Model 268
Search Agent Model 269
Second Hand Business Model 271
Self Service 271
Service Subscription 273
Servicizing 274
Set It And Forget It Model 275
Shared Business Models 277
Shared Ownership 278

Shareware 279
Showrooming 280
Simplified Model 281
Sliding Scale Fees 282
Social Commerce 283
Social Cooperative 284
Sponsorship 285
Store-In-Store 287
Subscription 288
Supply Chain 289
Surprise Box Model 290
Swapping 291
Swapping For Products 292
Swapping For Services 293
Syndication 294
The Ad Unit Model 296
Three-Tiered 297
Time-Based Pricing 298
Timeshare 299
Tip Jar/Donation 301
Tripwire 301
Usage Fee (Metered Service) 303
Value-Added Reseller 304
Vickrey Auction 305
Virtual Business Model 306
Walrasian Auction 307
Warehouse Club Model 309
White Label 309
Wholesale 310
Work Cloud 311

Worker Cooperative 312
Conclusion 314
References 315
About The Author 316

INTRODUCTION
There are thousands of different businesses in the world.
They come in many different shapes and formats in a ever
evolving market.
New technologies and consumer behavior changes are

constantly forcing businesses to adapt and recreate
themselves.
The same can be said about their business models. Their

different types (or archetypes) are diverse and by combining
them, entrepreneurs have been able to create disruptions
never seen before.
After trying to classify business and its business models in

different categories for years, I decided to create one big list
(an almanac) of business types and its business models.
That's how this almanac was born. Use it as a reference

guide. Read one by one. Whatever way you choose, I hope it
helps inspire you to create the new unicorn in your market.

.99 shops (Dollar Store)
How Does the .99 Shop Work?
A .99-cent shop (also referred to as a dollar store) is a retail
outlet that specializes in selling inexpensive items, which
usually cost a dollar or less. However, some of these items
may cost several dollars.
They operate by selling a wide range of common and niche

items including toiletries, gift cards, balloons, and even
groceries. By offering such a wide range of items, they appeal
to a diverse customer segment.
Most of their locations are targeted at areas that are a

considerable distance from major shopping centers, offering
a much closer and more cost-friendly alternative.
How Does the .99 Shop Make Money?

.99 shops operate by selling smaller-sized items at
pocket-friendly prices (usually a dollar or less). However,
these items may not be cost-effective when compared to
larger packages purchased at normal retail outlets. Therefore,
.99 shops convince buyers that small packages at low prices
are better than larger packages at a higher price.
These types of stores typically have minimal employees and

small stores to minimize overhead costs. They prioritize long
shelf-life, off-brand, and small-sized packaged items to
maximize profits as well. They are usually located around
low-income communities that are a considerable distance
from other retail outlets, offering a more convenient option.

Companies That Use the .99 Shop Business Model
● Dollar General
● Dollar Tree
● Family Dollar
Accreditation
How the Accreditation business model works?
The Accreditation Business Model is based on the
certification process of competency, authority or credibility. It
ensures that people, businesses or institutions behave
ethically and employ suitable quality assurance.
Accreditation Businesses work by issuing or helping third

parties obtain credentials against official standards of
accreditation bodies. The accreditation types may include:
● Educational accreditation
● Email sender accreditation
● Personal trainer accreditation
● Professional certification
● Quality Management System Standard
How the Accreditation business model makes money?

Accreditation Business usually charge a certification fee and
an annual certification maintenance to guarantee that the
third party still comply with standards.

Companies that use Accreditation Business Model:
● AHPGS
● AKAST
● ACQUIN
● AQ Austria
Ad-free subscription
How Does the Ad-Free Subscription Model Work?
An ad-free subscription model is a business that offers a
service that offers a subscription-based package that does
not include digital ads. Usually, such businesses also offer
freemium models which allow users to access some or all of
the features of the product, albeit with ads.
The user can now decide on whether to upgrade to the

ad-free version of the platform by subscribing to their
services, or to continue using the freemium model. Since
most users find ads to be inconvenient, they may decide to
purchase a monthly or yearly subscription to enjoy the
product without disruption.
How Does the Ad-Free Subscription Model Make Money?

For users to gain access to the ad-free version of the service,
they will have to pay a monthly or yearly subscription to the
business. This regular customer subscription makes up the
bulk of revenue for most businesses that use this model.
This model is most popular among social media platforms,

especially those involved in content creation instead of

connecting people.
Companies That Use the Ad-Free Subscription Business

Model
● YouTube
● Hulu
● Amazon Prime
Add-on
How Does the Add-On Business Model Work?
The add-on business model works by charging users for
offering additional features or benefits to a basic service or
product. Therefore, in addition to the cost of the product or
service, users also pay for any additional accessories they
desire.
This works most successfully with products or services which

have a long Lifetime Value and a high degree of customer
retention. This ensures that customers will continue to use
the product and typically request more add-ons as well.
A good example would be a mobile game that users may play

for free or for a small charge and offers additional features
like bonus points, extra lives, and customization for a fee.
How Does the Add-On Business Model Make Money?

Add-on companies make money by charging customers for
purchasing additional accessories. They work best by
encouraging customer loyalty and offering high-demand,
high-margin benefits or accessories as add-ons to the basic
products or services they provide.

These benefits are also usually offered at only a fraction of
the cost of the basic product or service. This model is popular
among game developers, airlines, fast-food companies,
auto-dealers, and a wide range of other industries.
Companies That Use the Add-On Business Model
● McDonald's
● Apple
● United Airlines
Advertising
How Does the Advertising Business Model Work?
As the name suggests, the advertising business model
involves generating revenue by drawing consumer attention
to a commercial product or service to drive sales or
awareness. These advertisements are usually hosted on a
public medium such as television, radio, internet platforms
like websites, social media, and so on.
The first step in building a successful advertising business

involves building a dedicated audience by creating content or
encouraging interaction with your audience. Revenue is then
generated by commercializing access to this audience for the
purpose of advertising.
Many large businesses such as Google, Facebook, and Uber

make use of this strategy. Even smaller businesses like
independent bloggers and social media influencers make use
of this business model.

How Does the Advertising Business Model Make Money?
The advertising business model may generate revenue
based in several ways. It may involve a one-time purchase or
a subscription-based payment system, as commonly seen in
traditional advertising media such as radio and television.
Other popularly used monetization methods include

pay-per-click (for example, in digital ads using banners),
pay-per-view (typically, seen in video ads), and a
commission-based model based on the number of products
or services sold through the advertisement, and so on.
Companies That Use the Advertising Business Model
● Google
● Facebook
● Amazon
Adware
How the Adware business model works?
Adware, or advertising-supported software, is a business
model in which software is offered for free (or at reduced
price) for its users in exchange for receiving advertisement.
How the Adware business model makes money?

Software authors generate revenue by selling ads displayed
to its software users. Ads may be displayed in many forms,
such as banners, pop-ups, installation screens, etc.
Companies that use Adware business model:

● GenieToolbar
● appstrm.com
● Total Toolbar
Affiliate MARKETING
How the Affiliate model works?
Affiliate marketing is a type of online business model where
third-party websites indicate products or services of other
websites in exchange of a percentage of the cost of the
transaction.
This model usually have three different players: the seller

(usually a author or ecommerce website), the affiliate or
publisher (the website which contains traffic and potential to
be a referee), the affiliate network (which contains associated
affiliate websites and product offers with a payment
processing technology).
When a visitor clicks on a link at the affiliate website, this

referral link has a tag capable of tracking the sale.
How the Affiliate model makes money?

Affiliates and the Affiliate Marketing Network makes money
by charging a small fee (usually a percentage of the cost of
the transaction).
Companies that use Affiliate model:
● Ambassador
● Rakuten

● ClickBank
Agency
How the Agency business model works?
Agency is a business model where a person or a company
(the agent) is authorized to act and negotiate on behalf of
another (the principal) to bring commercial / contractual
relationship.
It's a very common business model in artistic and

entertainment areas (ex: band agents), employment (ex:
recruitment) and financial advice (ex: stock brokerage).
How the Agency business model makes money?

The Agency Business Model makes money by charging a
percentage of the dealt contract.
Companies that use Agency business model:
● Am Only
● Creative Artists Agency
● Paradigm Talent
● Robinhood
● TD Ameritrade
● Charles Schwab

Aggregators
How the Aggregators model works?
The Aggregator Business is a model in which a website
aggregates information from several online sources.
Although not very common, some aggregator business may

aggregate goods or services, instead of information.
There are many different types of aggregator businesses:
● Data aggregator
● News aggregator
● Video aggregator
● Smart Grid aggregator
● Affiliate Ecommerce Websites
How the Aggregators model makes money?

News aggregator makes money by monetizing ads (through
clicks or impressions).
Product or service aggregator makes money using an affiliate

marketing model (revenue share / commission from sales).
Companies that use Aggregators model:
● Shut up and take my money
● AllTop
● Flipboard

● Feedly
● TheSnug
All you can eat (AYCE)

How the All You Can Eat business model works?
The All You Can Eat Business Model works by letting
customer use a company service for as much as possible for
a fixed price.
The All You Can Eat Business Model works by offering the
unlimited use of a product or service for a fixed price
(one-time or recurring payment).
This model was first applied to restaurant buffet services at

schools, colleges, universities, hotels and casinos.
Although it is still very popular at the restaurant segment in

Asian Cuisine and Brazilian Barbecues (churrascarias), it has
become very popular in the digital world with subscription
plans.
How the All You Can Eat business model makes money?
In the physical products or services cases, the business
should charge more than the average consumption. If you are
a restaurant and people on average eat 500grams you have
to fix your price on the cost of 1kg.
When Netflix was created it would deliver DVDs through mail

and let you rent than as much as you wanted, limited to one
DVD in your possession (if you wanted another one you
needed to send back the one you had rented with you). The

monthly price charged would make Netflix cashflow positive
as long as people rented up to 7 DVDs per month. But their
customer base average was somewhere between 3 and 4
DVDs.
Companies that use All You Can Eat business model:
● Fogo de Chão
● Netflix
● Spotify
● Gym Centers (Pro-Forma)
All-inclusive
How the All-Inclusive business model works?
The All-Inclusive Business Model works the same way that
the All You Can Eat Business Model, but it's usually applied in
hotel & resorts industry.
All inclusive hotels or resorts includes meals, food, drinks and

many other services in its price.
How the All-Inclusive business model makes money?

The mathematics are the same of the All You Can Eat: hotels
charge more than the cost of the average consumption and
operational costs of guests.
Companies that use All-Inclusive business model:
● Club Med
● Hyatt

All-pay auction
How Does the All-Pay Auction Business Model Work?
The all-pay auction is a type of auction in which both the
person with the winning bid and all the other individuals
possessing losing bids are required to pay the amount they
bid for the item, even though only the winner receives the
prize.
Most times these bids are made in secret, so no individual is

aware of what the other is bidding. This is different from
traditional auctions, where only the winner has any financial
obligations at the end of the bidding process and most bids
are openly announced.
Though this may sound strange, this type of auctioning

process is actually quite common and is the business model
behind lotteries and raffle draws.
How Does the All-Pay Auction Business Model Make

Money?
The all-pay auction business model generates revenue by
collecting money from both the winning and losing bids.
Interestingly, since all bids are kept secret, most individuals
end up overbidding in an attempt to secure the prize.
A good example would be purchasing multiple lottery tickets

in an attempt to increase your chances of winning.
Companies That Use the All-Pay Auction Business Model
● The Lotter
● Lotto Agent

● Jackpot.com
Alliance Model
How Does the Alliance Business Model Work?
An alliance business model (also referred to as a
collaborative or joint-venture) is one in which two distinct
business entities pool together their resources in terms of
capital, labor, technology, intellectual property, and so on, to
achieve a substantial increase in revenue.
This allows them to leverage certain inherent advantages of

such a collaboration such as economies of scale, economies
of skill, economies of risk, as well as vertical and horizontal
integration. However, this form of business alliance requires
significant planning and a strong degree of mutual trust to
execute successfully.
Some popular examples of industries that rely strongly on this

business model are the agricultural and agricultural-allows
industry, electronics manufacturers, automakers, and so on.
How Does the Alliance Business Model Make Money?

Alliance business models can generate revenue in several
ways. They may range from product-centric to service-centric
businesses. Some popular monetization models used by such
businesses are one-time payments, commission-based
payments, subscription-based models, ad-revenue models,
freemium models, licensing models, and so on.
The main feature of such collaborations is that both business

entities substantially increase their profits by combining their
respective resources.

Companies That Use the Alliance Business Model
● Verily and GlaxoSmithKline
● Boeing and Lockheed Martin
● The Walt Disney Company, News Corporation,

Comcast's NBC Universal, and Providence Equity
Partners
Art Dealer
How Does the Art Dealer Business Model Work?
An art dealer is a term used to refer to an individual who is
involved in the buying and selling of artwork, or who acts as
an intermediary in the process. If the dealer is only acting as
an intermediary, they are typically paid a commission after the
sale of the piece of art.
The process of buying and selling art is typically done

through an art gallery, a place where artworks are displayed
for the purpose of sale. Art galleries can come in different
forms.
These may include a commercial art gallery (in which the art
dealer is an intermediary between the artist/previous artwork
owner and buyers), artist-run initiatives (where a group of
artists come together and split the cost of operating an art
gallery) or a non-profit gallery (usually, sponsored by charities,
grants, and donations).
How Does the Art Dealer Business Model Make Money?

Art dealers may be paid either through a one-time payment if
they are the sole owner of the art piece, or a

commission-based model if they are operating as an
intermediary. Private art dealers also charge a membership
fee, which allows members exclusive access to a wide range
of private high-end art collections. Public art dealers who
utilize art galleries may also charge an entry fee and also
make additional revenue through advertising as well.
Companies That Use the Art Dealer Business Model
● Gagosian
● Hauser & Wirth
● Pace Gallery
Assembler
How Does the Assembler Business Model Work?
An assembly line (also known as a progressive assembly) is a
popular manufacturing technique in which pre-fabricated
parts are added in a particular sequence to a semifinished
product as it moves from one station to another until the
finished product is achieved.
The modern moving assembly line was first utilized by Henry

Ford in 1913 at the Highland Park Ford Plant for the
manufacture of the Ford Model T. Since then, the concept has
spread to numerous other industries and has been
significantly improved upon in a variety of ways.
Nowadays, most assembly lines feature a mixture of both

people and robots working together to create a complex
finished product from a variety of pre-fabricated parts. The
assembly line has been said to be effective in terms of time
and labor costs.

Some key industries, which are closely associated with this
form of manufacturing, include electronics, auto
manufacturers, toy makers, certain types of food and
produce, and so on.
How Does the Assembler Business Model Make Money?

Assembler businesses generate profit by selling the finished
product to the consumer.
Companies That Use the Assembler Business Model
● Tesla
● Samsung
● Apple
Asset Sale
How Does the Asset Sale Business Model Work?
An asset sale is a form of financial transaction in which a
business entity sells some or all of its assets to an interested
buyer. The seller retains full ownership of the company, but
has no further legal ownership over the sold assets. It’s
important that asset sales do not include company stocks.
These assets may be tangible assets such as machinery,

buildings, and other forms of inventory. They may also involve
intangible assets as well which may include leaseholds,
intellectual property, goodwill, trade secrets, licensing, brand
rights, and so on.

How Does the Asset Sale Business Model Make Money?
During an asset sale, the seller receives some form of
monetary compensation during the sale. Most times asset
sales are used as a way to get rid of unproductive parts of the
business, raise funding, reduce legal liability, and so on.
Companies That Use the Asset Sale Business Model
● Wachovia
● Merrill Lynch
● General Motors
Auction
How the Auction business model works?
The Auction Business Model works as an intermediary
between buyers and sellers that promotes auctions that offer
goods for bid and then sell to the highest bidder.
In economic theory an auction is a method for determining

the value of a commodity that has an undetermined or
variable price. In some cases, there is a minimum or reserve
price; if the bidding does not reach the minimum, there is no
sale (but the person who puts the item up for auction still
owes a fee to the auctioneer). In the context of auctions, a bid
is an offered price.
It's one of the oldest business models dated before 500 B.C.
and very common in industries like antique and collectibles,
livestock and commodities businesses.

How the Auction business modelmakes money?
Auction Business receives a commission that ranges from
12-25% of the sales price (25% of the hammer price for items
up to $20,000, 20% for those at $20,000-500,000, and 12%
for items that sell for more than $500,000.).
But by offering sellers a guarantee (an agreement to buy a

work for a specified minimum price) they also make 50% of
commission if the hammer price exceeds the guaranteed
minimum price. A highly profitable.
Many of the great auction houses are now becoming art

dealers with what they call "private sales". Instead of inviting
clients to auctions and see them leave because there was
nothing that they were interested, houses are now
understanding client’s specific interests and offering specific
items privately. They are now capturing revenues for
themselves that were being lost.
Companies that use Auction business model:
● Christie's
● Sotheby’s
● Bonhams
● Phillips de Pury
B2B
How Does the B2B Business Model Work?
The business-to-business (B2B) business model is a strategy
that involves the sale of a product or strategy directly from
one business to another. Sometimes the buyer may act as

merely an intermediary and resell the product or service to a
final consumer. For example, the relationship between a
manufacturer and a wholesaler, or a wholesaler and a retailer.
Even though they are commonly associated with supply chain

businesses, they can also be applied to eCommerce,
information technology, communications, advertising,
financial technology, content marketing, health technology,
and so on.
There are several peculiarities associated with this type of

business interaction. They typically have a longer sales cycle,
with a higher-order value and recurring purchases. B2B
businesses also typically have more complex pricing
structures with the key focus being cost-reduction, fewer
buyers but with a long Lifetime Value, and a more intimate
relationship between the buyer and seller.
How Does the B2B Business Model Make Money?

Most B2B businesses generate revenue by selling their
products and services to other businesses. This process can
be monetized through the use of one-time payments,
subscription-based models, digital ad-revenue models,
Companies That Use the B2B Business Model
● HubSpot
● Salesforce
● Techstars

B2C
How Does the B2C Business Model Work?
The business-to-consumer model is the business model that
most people are familiar with. It involves the sale of a product
or service directly to the end-user (in other words, directly
from the business to the customer). It is also known as the
direct-to-consumer model since it bypasses all intermediaries,
such as retailers, wholesalers, or other third parties.
There are some key features that are associated with the
B2C business model. They typically cost the customer less
since costs can be reduced significantly by cutting out
middlemen and the increased fees, wage costs, and
operating costs associated with them.
They are also associated with a higher volume of clients, but

also a shorter sales cycle and lower revenue per client. There
is a lower risk of entry and lower initial investment, a clear
target market, and a mass media marketing strategy.
How Does the B2C Business Model Make Money?

Most B2C businesses generate revenue by selling their
products and services directly to consumers. This process
can be monetized through the use of one-time payments,
Companies That Use the B2C Business Model
● Walmart
● eBay
● Target

B2C2B
How Does the B2C2B Business Model Work?
The business-to-consumer-to-business model is an emerging
trend in the world of business development. It is considered a
hybrid of traditional B2B and B2C models, which is a product
of the increased complexity and innovation associated with
the business environment today.
At the most basic level, the B2C2B model involves

advertising your services to a potential client (in this case,
another business) through their customers or employees (the
“consumers”). These consumers act as internal influencers
who may knowingly or unknowingly market your services to
the target business.
A good example would be LinkedIn, providing vital

job-seeking services for a large number of employees of a
firm. This may in turn encourage the firm to use LinkedIn as a
reliable avenue for future job recruitment.
How Does the B2C2B Business Model Make Money?

Most B2C2B businesses generate revenue by selling their
products and services directly to consumers. This process
can be monetized through the use of one-time payments,
Usually, the initial consumers may be provided a basic or

freemium package, while the standard or premium packages
are aimed at the target businesses.

Companies That Use the B2C2B Business Model
● LinkedIn
● Slack
● Zoom
Bait & Hook

How the Bait and Hook business model works?
The Bait and Hook Model works by offering a product with
very low margin or at a loss (the bait) and profit from selling a
higher volume of specific and higher margin refills (the hook)
It's also known as Razor & Blade business model as a
reference to its use by Gillette. Many other companies such
as Nespresso, HP Printers and Cell Phone Carriers also use it.
The model uses a variant of a pricing strategy known as
penetration pricing.
How the Bait and Hook business model makes money?

The Bait and Hook model makes money by selling refills with
very high margins.
Companies that use Bait and Hook business model:
● Gillette
● Schick
● HP printers
● Nestlé
● Nespresso

Bargain Basement (Bargain
Bin)
How Does the Bargain Basement (Bargain Bin) Business
Model Work?
Traditionally, bargain basements (also known as bargain bins)
were a part of a large store where goods were sold at
reduced prices, typically in an underground cellar, hence the
name. Nowadays, it is used to refer to a part of the store that
sells merchandise at lower prices than the standard retail
cost.
These items may be sold at a cheaper rate for several

reasons. These may include off-brand items, small-sized
packages, promo products, items that were overstocked, last
season’s merchandise (especially, when new merchandise is
coming in), and items that are nearing their expiration date.
Therefore, in most cases, these items are not the main focal
point of the store’s business model, but rather a way to get
rid of unwanted merchandise and attract more customers
who will also purchase higher-priced items as well.
How Does the Bargain Basement (Bargain Bin) Business

Model Make Money?
Most bargain-basement stores also sell normal-priced items
and use the bargain-basement business model as a method
of getting rid of unwanted or old merchandise without
incurring a total loss, as well as a marketing tool to attract
customers to purchase their other more lucrative
merchandise.

Companies That Use the Bargain Basement (Bargain Bin)
Business Model
● Walmart
● Target
● Dick’s Sporting Goods
Bargain Subscription
How Does the Bargain Subscription Business Model Work?
A subscription model is a type of business strategy whereby
a business entity receives a regular, recurring income in
exchange for continually providing a service or product.
This income may be received on a weekly, monthly, quarterly,

or even yearly basis, determined by the agreement between
the buyer and seller. They offer a significantly longer lifetime
value and allow a business entity to anticipate its revenue
more accurately.
In terms of finance, a bargain involves the purchase of an

asset below what is considered fair market value. A bargain
subscription is when a subscription package is offered at a
price lower than what it may have normally been sold.
There are several reasons why a business may offer bargain

subscriptions. These include attracting new customers,
increasing sales, freeing up inventory, increasing brand
recognition and publicity, charity, and so on.

How Does the Bargain Subscription Business Model Make
Money?
A business entity that utilizes a subscription model receives a
regular, recurring income in exchange for continually
providing a service or product. This income may be received
on a weekly, monthly, quarterly, or even yearly basis,
determined by the agreement between the buyer and seller.
Companies That Use the Bargain Subscription Business

Model
● MagazineBargains.com
● Discountmags.com
● Women’s Health magazine
Barter
How the Barter business model works?
The Barter Business Model works by helping people or
companies exchange goods or services for other goods or
services without using money.
Although, it has been the first form of trade in human history

internet- based barter exchange companies have emerged as
a powerful segment with global barter transactions account
for approximately 23% of the total value of worldwide
business transactions (estimated at $15.9 trillion).
But barter goes beyond B2B and now starts to reach B2C
market with websites that help you exchange time with other
people (ex: 1 hour of Spanish lesson exchanged for 1 hour of
programming lesson).

How the Barter business model makes money?
There are lots of bartering websites that are free and make
money with ads display, but professional B2B bartering
business charge an admission, transaction or monthly fee.
Companies that use Barter business model:
● Miroma Ventures
● BarterNews
● BookMooch
● BzzAgent
● uSWAP
● Trade Away
● Swap Treasures
Bidding fee auction

How Does the Bidding Fee Auction Business Model Work?
The bidding fee auction business model is a type of all-pay
auction model where all bidders are required to pay a
non-refundable fee to gain the right to participate in each
round of bidding. Sometimes each round of bidding consists
of a predetermined incremental increase in the auction
instead of a price determined by the bidders themselves.
The auction time is extended each time a new bid is placed,

and the winner of the auction is the last person to place a bet

once the auction time expires. Therefore, the auctioneer
profits from both the amount bid for the item and the bidding
fees paid by the participants (which in some cases make up
most of the profit).
These platforms are also known as penny auctions because

the bidding fees are usually only a small fraction of the price
bid for the item being auctioned.
How Does the Bidding Fee Auction Business Model Make

Money?
In the bidding fee auction business model, the auctioneer
profits from both the amount bid for the item and the bidding
fees paid by the participants (which, in some cases, make up
most of the profit).
Companies That Use the Bidding Fee Auction Business

Model
● HappyBidDay
● Bidurway
● iBid2Save
Bricks and Clicks Model

How the Brick and Clicks business model works?
Also known as Bricks and clicks the Online2Offline Business
Model works when a company integrates both offline and
online channels. Some companies may integrate even more
than those two channels which is usually called Multichannel
retailing or Omnichannel.
Although we could say that this business model was born

with the appearance of internet in the early 90‚Äôs taking
bricks and mortar business models to the web with
e-commerce websites as a new channel.
How the Brick and Clicks business model makes money?

In the brick-and-click business model the company generate
revenue by selling products through a physical retali location
(offiline) and an e-commerce (online).
Companies that use Brick and Clicks business model:
● Argos
● Carrefour
● Clinique
● Disney
● Sephora
Bricks and Mortar

How Does the Brick-and-Mortar Business Model Work?
The brick-and-mortar business model is one of the oldest
business models in existence. It is used to describe a
business entity that generates revenue through face-to-face
transactions carried out at a physical location. This location
could be a store, office, or warehouse which is owned or
rented by the business.
The brick-and-mortar business model makes up most offline

businesses. It is the most common type of business model
seen in the retail industry, where it makes up 94% of retail

businesses, dwarfing the online e-commerce sector.
Brick and mortar businesses typically offer a greater degree

of customer interaction and targeted marketing. However,
unlike e-commerce businesses, they are plagued with the
constraints of limited shelf space and a customer segment
that stays within a convenient distance.
How Does the Brick-and-Mortar Business Model Make

Money?
Most brick-and-mortar businesses make money by selling
their products and services directly to consumers. This
process can be monetized through the use of one-time
payments or multiple payments, subscription-based revenue,
advertising revenue, licensing revenue, and so on.
Companies That Use the Brick-and-Mortar Business Model
● Walmart
● Trader Joe’s
● Home Depot
Broker-Dealer
How Does the Broker-Dealer Business Model Work?
Within the financial industry, a broker-dealer is a general term
that is used to refer to any entity, whether an individual or a
company, which is responsible for trading securities.
This service could be performed privately or on the behalf of

another individual (a client). A security is any tradable
financial asset such as bonds, stocks, derivatives, and so on.

While a significant number of broker-dealers are independent
entities, many also exist as subsidiaries of larger financial
corporations such as investment banks, commercial banks,
and other forms of investment firms.
How Does the Broker-Dealer Business Model Make Money?

Broker-dealers purchase these securities at a particular price
and sell them off at a higher price in the future. The
difference between the two prices is known as the spread,
and this represents the profit made by the broker-dealer in
that particular transaction.
A broker-dealer who facilitates these transactions on the

behalf of a third party is typically paid a commission. This
commission may be a flat rate, a fixed percentage of the profit
made, or a combination of both systems.
Companies That Use the Broker-Dealer Business Model
● Charles Schwab
● Fidelity Investments
● Interactive Brokers LLC
Brokerage
How the Brokerage business model works?
The Brokerage business model works by arranging
transactions between a buyer and a seller in exchange of a
fee or commission when the deal is successful.
Extensively used by industries like insurance and real estate,

usually as independent agents (brokers), the brokerage

model has many different forms in the digital world, such as:
● Marketplace (Orbitz)
● Buy/Sell Fulfillment (Carsdirect) q Auction Broker
(eBay)
● Transaction Broker (PayPal)
● Search Agent (Kayak)
How the Brokerage business model makes money?

The brokerage business model makes money charging a
fixed fee or commission (%) when the deal is successful.
Companies that use Brokerage business model:
● Marketplaces (Amazon)
● Christie’s
● Kayak
● Paypal
● Zopa
Build to Sell Model

How Does the Build-to-Sell Business Model Work?
The build-to-sell business model has seen increased
popularity in the age of digital commerce and the rapid
business scalability it supports. It involves building and rapidly
upscaling a business to sell the business for a profit later on.
The model is popular among e-commerce companies, social

media platforms, fintech firms, and other digital companies. A

key feature of such firms is that they can run independently of
the founder, since no investor is willing to purchase a
company whose entire operation is solely dependent on a
single individual.
How Does the Build to-Sell Business Model Make Money?

Most build-to-sell businesses generate revenue by offering
their products and services directly to the consumers. This
payments, subscription-based models, digital ad-revenue
models, freemium models, licensing models, and so on.
However, the endgame is to generate a substantial profit by

selling off the company or the rights to the use of the
company’s brand, image, intellectual property, and so on.
Companies That Use the Build-to-Sell Business Model
● Instagram
● WhatsApp
● Oculus VR
Business and employment

cooperative
How the Cooperative business model works?
The Cooperative Business Model is based on an autonomous
association of people who voluntarily cooperate for their
mutual social, economic, and cultural benefit.
Cooperatives are usually related to non-profit community

organizations, but has increasingly became a common
business model for businesses that are owned and managed
by the people who use their services (also known as a
consumer cooperative) or by the people who work there (a
worker cooperative).
There are also cooperative hybrids such as worker

cooperatives that are also consumer cooperatives or credit
unions.
In short, a co-op is defined as “jointly owned enterprise

engaging in the production or distribution of goods or the
supplying of services, operated by its members for their
mutual benefit, typically organized by consumers or farmers”.
How the Cooperative business model makes money?

The cooperative business model is by its legal nature a
non-profit organization. They usually charge an admission fee
to become a member (in order to buy shares of it) and a
monthly fee to cover operational costs. Some cooperatives
may also pay dividends to its members.
In some cooperative abusive cases, cooperative directors pay

incredibly high salaries and a wide range of benefits to
themselves (since they cannot pay themselves bonuses).
This model is also called co-op business model.
Companies that use Cooperative business model:
● Credit Agricole Group
● Rabobank Group
● CHS Inc

● Suma
Buy & Sell

How Does the Buy & Sell Business Model Work?
The buy & sell business model is probably the most popular
form of business interaction between merchants and
customers. It is an umbrella term that includes a wide range
of industries and sectors, but can best be understood using
the retail industry.
In this form of organizational plan, a business purchases new

or used items and sells them to a customer at a higher price.
Since it is one of the simplest forms of business it has a wide
range of applications such as department stores, grocery
stores, supermarkets, e-commerce platforms, financial
securities, and so on.
How Does the Build & Sell Business Model Make Money?
Most buy & sell businesses generate revenue through the
use of one-time payments for goods and services, or
sometimes multiple payments. They may also generate
revenue through licensing fees and advertising revenue as
well.
Companies That Use the Build & Sell Business Model
● Walmart
● Target
● Home Depot

Buy One Give One (B1G1 or BOGO)
How the Buy One Give One business model works?
The Buy One Give One business model works by selling
products with an embedded charity. For every product
bought another one is donated to those in need.
The B1G1 model has long been criticized by non-profit experts

saying that it does little to address the root causes of poverty
and may even reduce demand for locally produced products.
But it surely is popular along the public making consumption

seem less bad for the planet.
How the Buy One Give One business model makes money?
The Buy One Give One model makes money by cutting out
the middleman and going straight to customers. The products
donated are cheaper than the ones bought by customers.
Both strategies allow businesses to be profitable.
Companies that use Buy One Give One business model:
● Toms Shoes
● Warby Parker
● Soap Box
● Two Degrees
● Good Spread
● Everything Happy
● Smile Squared

● Baby Teresa
● Bogo Bowl
Buying Clube (Worker Co-Op)

How Does the Buying Club (Worker Co-app) Business
Model Work?
A buying club (also known as a worker co-op) is an
organization within which individual members pool together
their resources and purchase goods or services at lower than
retail prices.
They can get these products more cheaply due to the

economies of scale of such a deal and greater bargaining
power with the supplier afforded by their collective
purchasing power. In most buying clubs, the privilege of
membership is sold for a fee.
A significant number of buying clubs also operate as

worker-cooperatives. This means that every worker has a say
in how decisions are made throughout the organization and
the business is run in a more or less democratic manner.
Some good examples include hardware co-ops, agricultural
product co-ops, movie theaters, and food co-ops.
How Does the Buying Club (Worker Co-app) Business

Model Make Money?
Most buying clubs' members can purchase items at a cheaper
price due to the fact that these items are ordered in bulk.
These products can now be resold at retail prices which are
significantly higher and the difference in prices is considered
the profit.

This profit is then disbursed among the individual members of
the buying clubs in a predetermined manner.
Companies That Use the Buying Club (Worker Co-Op)

Business Model
● REI
● Ace Hardware
● Carpet One
Car Dealership
How Does the Car Dealership Business Model Work?
A car dealership is a retail business that sells new or used
cars, usually through a contract with a car manufacturer or its
sales subsidiary. It may also be involved in the sale of spare
parts, car accessories, maintenance services, and warranty
claim processing.
Multi-brand car dealers sell vehicles from different

manufacturers and may at times specialize in a particular type
of vehicle such as trucks, luxury vehicles, electric vehicles,
and so on.
How Does the Car Dealership Business Model Make

Money?
A majority of car dealerships make money by selling the
vehicles over the dealer’s invoice price, hence pocketing the
difference as profit. Also, these dealers make money by
selling vehicle spare parts, accessories, vehicle maintenance,
and warranty processing services. They may also generate
revenue through advertising for car manufacturers.

Companies That Use the Car Dealership Business Model
● Carmax
● Paragon Honda
● Bradshaw Automotive Group, Inc.
Careware
How Does the Careware Business Model Work?
Careware (also referred to as goodware, charityware, or
helpware) is a type of software that is specifically designed
for the benefit of a charity or any other form of philanthropic
activity. Many different types of careware exist, and they can
be designed to serve a wide range of purposes, ranging from
a simple website to a fully operational business model which
generates revenue for the charity.
The first use of the term was in 1988 by a Canadian

developer known as Roedy Green. One of the first practical
examples of a careware product was as a part of a
programming user interface library which was distributed by
Al Stevens in 1991. In return for this service, he suggested that
users donate a dollar, which would be given to a charitable
cause.
How Does the Careware Business Model Make Money?

Generally speaking, careware is divided into commercial and
non-commercial services. Commercial careware services are
usually paid a fee for their services, while non-commercial
careware services may provide these services as freeware or
ask the users to donate the proceeds to another charity. So
careware services simply request that the user shares the
careware with other users as well.

Companies That Use the Careware Business Model
● Peazip
● Product Red
● FireFTP
Car-sharing
How the Car-Sharing business model works?
The Car Sharing Business Model works by allowing people
rent cars for short periods of time, usually by the hour.
Car sharing companies are strongly based on technology.

Once the customer has signed up he or she can use an
website to book or a mobile app to find an available car, pick
it up, use and drop it off at a specific parking space (or any
available public parking space, depending on the company)
within a designated operating area.
This model offers great value to users who needs occasional

use of cars and has been boosted by the population’s
mindset shift about car ownership and increasing concern
with planet sustainability.
How the Car-Sharing business model makes money?

Car Sharing businesses charge an hourly fee which includes
the car with fuel, insurance and cleaning/maintenance taxes.
The hourly fee has to be enough to cover expenses and

generate profits above 35 to 40% of occupancy.

Companies that use Car-Sharing business model:
● BlueSG
● Car Next Door
● Delimobil
● EvCard
● Cambio CarSharing
● GoCar
● Greenwheel
Charity Crowdfunding
(Donation Crowdfunding)
How Does the Donation Crowdfunding Business Model
Work?
Crowdfunding is the process of raising funding for a business
venture using contributions from a large number of people.
Most crowdfunding ventures are hosted online.
There are basically four types of crowdfunding: rewards,

donation, debt, and equity. In this business model, we are
focusing on donation crowdfunding, also known as charity
crowdfunding.
In donation crowdfunding, an entrepreneur with a great idea

for a product or service but who lacks the required funds to
execute this project can solicit for funding from a large group
of people through a crowdfunding platform.

In this form of crowdfunding, there is no promise of
reimbursing the donors though they may be offered several
perks such as pre-sale, added product features, a lower
selling price, and so on. It is important to note that most
crowdfunding platforms take a percentage of the donated
funds as a commission.
How Does the Donation Crowdfunding Business Model

Make Money?
Donation crowdfunding companies take a percentage of the
donated funds as a commission.
Companies That Use the Donation Crowdfunding Business

Model
● Kickstarter
● Indiegogo
● GoFundMe
Charity Shop Model

How Does the Charity Shop Business Model Work?
A charity shop (which is also known as a thrift store or
opportunity shop) is a type of retail establishment that is
usually created and run by a charitable organization for the
purpose of generating revenue.
Most charity shops sell used items which were donated by

members of the charity or other well-meaning individuals.
These items are then sold at lower than retail prices to
members of the public, especially at-risk individuals who may
not have been able to afford new items at retail prices.

Due to the fact that a charity club does not spend money
buying these goods and a significant number of employees
work on a volunteer basis, they are able to keep operating
costs quite low. The money left over after covering operating
costs is then donated to a charitable cause.
How Does the Charity Shop Business Model Make Money?

Charity clubs generate revenue by selling the items which are
donated to the organization. Since these items are donated
for free, they can be sold at prices reasonably below the retail
cost and still generate significant profit. Also, low
maintenance costs mean that the recurring expenses borne
by most charity shops are generally lower than that of retail
outlets of comparative size.
Companies That Use the Charity Shop Business Model
● British Heart Foundation
● Salvation Army
● Goodwill Industries
Chemical leasing
How Does the Chemical Leasing Business Model Work?
The chemical leasing business model is an innovative
approach to the sale of chemical compounds which focuses
on a shift from a volume-centric model to a function-centric
one.
Therefore, in this system, manufacturers are encouraged not

to solely focus on selling larger amounts of product to
achieve higher profits. Instead, the products are sold as
functional units which are more concerned with the purpose

these chemicals are supposed to perform and act as the main
basis of payment.
The aim is to encourage more sustainable practices both

environmentally and in the aspect of public health by
promoting the efficient use of these chemical products. It also
focuses on a greater degree of mutual trust between the
buyer and seller, as well as a longer sales cycle due to the
extended quality management services offered by the
supplier as well.
How Does the Chemical Leasing Business Model Make

Money?
The chemical leasing business model still generates revenue
through the sale of chemical compounds to buyers. However,
as part of the global shift towards more sustainable practices,
they have shifted from a product-centric, volume-dependent
sales model to a service-centric, functional unit model which
focuses on the efficiency of the products.
Companies That Use the Chemical Leasing Business Model
● Coca-Cola
● Ecolab
● Airbus
Classified Advertising Model

How Does the Classified Advertising Business Model Work?
Classified advertising is a type of short-form advertisement
that was most popularly used in newspapers and periodicals,
but is now seeing increasing use on online platforms. They
are usually used to advertise businesses, items for sale, job

opportunities, and so on.
Initially, classified ads were mainly short-form text ads, since

they were priced per line. However, online classified ads are
not priced per line and offer longer text options with a
combination of display advertising as well. These online ads
are usually linked to other platforms as well.
Classified advertising is a low-cost and effective advertising

method. It is seeing increasing usage online, especially on
social media platforms, where social classifieds are
increasing in popularity.
How Does the Classified Advertising Business Model Make

Money?
Traditional classified advertising businesses such as
newspapers and periodicals usually charge per line of text.
Online classified advertising businesses may charge based
on other parameters which measure the level of engagement
with the ad such as the number of unique visitors who were
directed to the platform through the ad, pay-per-click,
pay-per-conversion, or pay-per-view.
Companies That Use the Classified Advertising Business

Model
● Craigslist
● Subito
● Adpost.com

Clickbait
How Does the Clickbait Business Model Work?
Clickbait is a type of online content that is purposefully
designed to attract attention and encourage visitors to access
a particular website through the link and increase traffic. It is
seen in somewhat of a negative manner these days due to
the fact that much of the so-called “content” offered by the
clickbait link typically does not fulfill the advertised quality.
Most clickbait headlines are sensationalist and the main aim

is to incur an emotional response from the reader or pique
their curiosity through outlandish statements or titles.
Some good examples of clickbait headlines would be articles

that make statements like “You Will Not Believe What
Happened Next After _____”, “Top 10 Celebrities Who
Were Rich But Are Now Broke”, and “He/She/They Did
_____ For 30 Days Straight, the Result Will Surprise You”.
How Does the Clickbait Business Model Make Money?

Clickbait business models are typically used by blogs or other
online platforms, which generate revenue by increasing traffic
to their platform and advertising. Clickbait businesses are
usually paid based on the amount of new traffic they can
direct to other platforms.
Therefore, the parameters used by such platforms are those

which measure the level of engagement with the clickbait link
such as the number of unique visitors who were directed to
the platform through the link, pay-per-click,
pay-per-conversion, or pay-per-view.

Companies That Use the Clickbait Business Model
● Buzzfeed
● BestBuy
● The Guardian
Co-Operative
How Does the Co-operative Business Model Work?
The co-operative business model (also known as a workers'
co-operative or worker co-op) is a term used to refer to
co-operatives which are collectively owned and managed by
the workers within the co-op.
This implies that decision-making within the co-operative is

done democratically, with each worker having a single vote,
irrespective of their rank or investment into the co-operative.
They may also decide to vote for a qualified governing body
of workers, which is in charge of managing the co-operative
and making such decisions on their behalf.
This type of business model was most popular during the

industrial revolution, but has fallen out of common use
recently. It is best seen in small-scale enterprises, where
workers typically have a more equal investment in the
business and decision-making is made on a smaller scale.
How Does the Co-operative Business Model Make Money?

Co-operative businesses generate revenue just the same as
any other business. The main difference lies in their style of
governance and the distribution of resources.
Worker co-operatives can generate revenue through offering

their products and services directly to the consumers. This
payments, commission-based payments, subscription-based
models, ad-revenue models, freemium models, licensing
models, and so on.
Companies That Use the Co-operative Business Model

● Black Star Co-op Pub and Brewery
● Equal Exchange
● Isthmus Engineering & Manufacturing
Collaborative Business Model

How Does the Collaborative Business Model Work?
A collaborative business model (also referred to as an
alliance or joint-venture) is one in which two distinct business
entities pool together their resources in terms of capital,
labor, technology, intellectual property, and so on, to achieve
a substantial increase in revenue.
This allows them to leverage certain inherent advantages of

such an alliance such as economies of scale, economies of
skill, economies of risk, as well as vertical and horizontal
integration. However, this form of business alliance requires
significant planning and a strong degree of mutual trust to
execute successfully.
Some popular examples of industries that rely strongly on this

business model are the agricultural and agricultural-allows
industry, electronics manufacturers, automakers, and so on.
How Does the Collaborative Business Model Make Money?

Collaborative business models can generate revenue in
several ways. They may range from product-centric to

service-centric businesses. Some popular monetization
models used by such businesses are one-time payments,
commission-based payments, subscription-based models,
ad-revenue models, freemium models, licensing models, and
so on.
The main feature of such alliances is that both business

entities substantially increase their profits by combining their
respective resources.
Companies That Use the Collaborative Business Model
● Molson Coors and SABMiller
● BMW and Brilliance Auto Group
● Microsoft and General Electric
Collective Business Model

How Does the Collective Business Model Work?
A collective business model is another form of business
alliance in which individuals, companies, and other forms of
business entities from allied fields pool together their
collective resources in terms of capital, labor, technology,
intellectual property, and so on, to increase their revenue
significantly.
Some popular forms of collective business alliances include

trade associations, trade organizations, franchises, worker
cooperatives, unions, and so on.
One of the key advantages of such a system is that it allows

individual business entities which may not have been able to
effectively compete in the market on their own to interact

with the market on a more even footing.
How Does the Collective Business Model Make Money?

Collective business models generate revenue in several
ways. Using franchises as an example, franchise owners
make money from the royalties and fees paid by their
franchisees. In return, the franchisees can increase their
revenue by leveraging on the brand, upfront investment,
lower risk, and increased technological aid.
Trade associations make money from association dues,

advertisements, events, fundraising, sponsorships,
merchandise sales, and so on.
Companies That Use the Collective Business Model
● Indego Africa
● FAIR
● Ethicando Stores
Combinatorial auction
How Does the Combinatorial Auction Business Model
Work?
A combinatorial auction is a type of auctioning system in
which individuals place bids on a combination of
heterogeneous items instead of individual items. That means
each bid is submitted as a bundle of items and the bid price,
with auctioneers having the option of submitting multiple
variations of bundles and prices.
This is commonly done in situations where the total of a

combination of items purchased together has a different

value than simply the addition of the individual items if they
had been purchased separately. In other words, it’s more
useful to the bidder to purchase these items together than
singly.
This auctioning style has been found to be quite common in

things like estate auctions, procurement of transportation and
logistical services, allocation of radio frequencies, and so on.
How Does the Combinatorial Auction Business Model Make

Money?
Combinatorial auctions run just like traditional auctions, and
the auctioneer makes a profit by selling the auctioned items
to the winning bid at a price higher than their invoice value.
There may also be additional revenue generated from entry
fees and advertising as well.
Companies That Use the Combinatorial Auction Business

Model
● Home Depot
● Sears
● Walmart
Commission-based model
How Does the Commission-Based Business Model Work?
The commission-based business model is one that is
well-known within the business world and quite popular due
to its simplicity. At its most basic form, a commission-based
business model is a business monetization strategy in which
a business entity is paid a predetermined fee in addition to
the cost of the service rendered or product provided.

This fee may be calculated in several ways, most popularly of
which include the flat rate, percentage, and tiered
commission. Building a commission-based business gives the
advantage of having an easily predictable revenue stream,
however, it also faces significant challenges with scalability.
Commission-based business strategies are quite common,

but are popularly seen in the service industry. This includes
financial services, real estate, sales representatives, travel
agencies, tax systems, and so on.
How Does the Commission-Based Business Model Make

Money?
Commission-based industries make money in several ways.
For example, their services may come at a flat rate. In this
case, a fixed sum of money is paid for every transaction. It
may also be calculated as a percentage of the total cost of
the transaction itself (e.g. 1%). Lastly, it may be a tiered
commission whose flat rate or percentage depends on the
volume of the transaction itself.
Companies That Use the Commission-Based Business

Model
● Airbnb
● Uber
● Ticketmaster

Community Commerce
(pyramid)
How Does the Community Commerce (Pyramid) Business
Model Work?
A community commerce business model is one that shifts
away from a profit-centered ideology and adopts a more
value-centered and people-centered model. It strongly
supports more partnership and collaboration between
different individuals and sections of the community. Most
community commerce models are hosted through various
social media platforms.
One of the key features of a community-based business

model is that it focuses on leveraging the resources it has
built through a strong community or following to build on
things such as marketing and revenue generation.
How Does the Community Commerce (Pyramid) Business

Model Make Money?
Community commerce business models can generate
revenue in several ways. The important defining feature is
their ability to leverage their strong sense of community, their
value-centric goals, and the fact that their goals are aimed
toward improving the community as a whole.
Companies That Use the Community Commerce (Pyramid)

Business Model
● TikTok
● Instagram

● Binance
Community Model
How Does the Community-Based Business Model Work?
A community-based business model is one that shifts away
from a profit-centered ideology and adopts a more
value-centered and people-centered model. It strongly
supports more partnership, collaboration, and co-creation.
Some people also refer to such a business model as a type of
social enterprise.
One of the key features of a community-based business

model is that it focuses on leveraging the resources it has
built through a strong community or following to build on
things such as marketing and revenue generation.
This community may be a physical community such as that

seen by a long-standing brick-and-mortar storefront in a
tight-knit community. It can also be a community of
professional affiliations and joint ventures. The community
may be a purely online community such as that seen in many
tech giants such as Facebook, Twitter, MySpace, etc.
How Does the Community-Based Business Model Make

Money?
Community-based business models can generate revenue in
several ways. Some popular monetization models used by
such businesses are one-time payments, commission-based
payments, subscription-based models, ad-revenue models,
The important defining feature is their ability to leverage their

strong sense of community as a tool to further enhance and

grow their business structure.
Companies That Use the Community-Based Business

Model
● MySpace
● Twitter
● Uniswap
Consignment
How the Consignment business model works?
The consignment business model works by selling goods for
an owner. Merchandise is brought to the store by the seller
and owned by the seller until the sale occurs.
This model avoids costly inventory purchasing costs

associated with most retail businesses as consignment stores
do not purchase any of the goods they sell.
How the Consignment business model makes money?

A consignment business model makes money by receiving a
percentage of the sale. Typically, it keeps 60 percent of the
sale price and gives 40 percent back to the original owner of
the item (percentages may vary).
If the item doesn’t sell in an agreed upon period, the

consignee returns to the store to reclaim the merchandise or
the item is donated according to a prearranged agreement
between the store and the seller.

Companies that use Consignment business model:
● Michael’s Consignment
● The Real Real
● 2nd Time Around
● Yoogi’s Closet
● Fashionphile
Consignment Sales model

How Does the Consignment Sales Business Model Work?
The consignment sales business model is a form of retail in
which personal goods are sold by a business entity (known as
a consignor) through a third-party vendor (known as the
consignee) to the final buyer. The ultimate ownership of the
goods before the final sale to an interested buyer lies solely
with the consignor. The consignee is paid a commission for
each successful sale.
In other words, all legal responsibility and risk are borne by

the consignor, with the consignee only being responsible for
the sale and distribution of these products. This offers several
advantages, the first of which is specialization. By focusing on
the part of the sale cycle they are most efficient at, both the
consignor and the consignee can rapidly upscale their
productivity.
Some popular examples of businesses that employ a

consignment sale business model as part of their structure
include franchises, second-hand goods markets, home sales
schemes, auction houses, art galleries, and so on.

How Does the Consignment Sales Business Model Make
Money?
The consignment sales business model involves the sale of
goods by a business entity to a buyer through a third-party
vendor, who is paid a commission for each successful sale.
Companies That Use the Consignment Sales Business

Model
● Poshmark
● Buffalo Exchange
● Mercari
Consumables Subscription
Model
How the Consumables Subscription business model works?
The Consumables Subscription Business Model works
offering regular deliveries of products that people naturally
run out in a subscription-based payment.
This model is mainly focused on consumable products:

diapers, razors, flowers and others.
It’s as straight forward as this: customers choose the best

frequency and volume of consumables they want to be
delivered to their door.
How the Consumables Subscription business model makes

money?
Consumable Subscription Model generate revenue by
offering a subscription to a product that the customer needs
to replenish on a regular basis, like a razor blade

(consumable product).
Companies that use Consumables Subscription business

model:
● Dollar Shave Club
● Diapers
● BirchBox
● PetFlow
● Amazon Subscribe & Save q Honest
Consumer Cooperatives
How Does the Consumer Cooperatives Business Model
Work?
A consumer cooperative is a term used to refer to a business
entity owned and managed by consumers for the purpose of
achieving a specific goal that is beneficial to its members, but
may not always be profit-centered. In many examples, they
are designed as a form of mutual aid instead of a
profit-oriented enterprise.
By pooling together their collective resources, many

consumer co-ops are able to purchase goods at significant
discounts by taking advantage of the large volume of the
orders they make. This allows them to negotiate better deals
with suppliers due to a higher purchasing power and take
advantage of the cost mitigating effects of economies of
scale.
Consumer co-operatives come in a variety of forms, but some

common examples include food cooperatives, credit unions,
farmer cooperatives, utility cooperatives, health cooperatives,
and so on.
How Does the Consumer Cooperatives Business Model

Make Money?
Even though many consumer cooperatives are not primarily
focused on generating profits, they do have several means of
generating revenue. This includes membership fees and
contributions, stocks, bonds, loans, donations, grants, and so
on.
Companies That Use the Consumer Cooperatives Business

Model
● Alliant Credit Union
● Navy Federal Credit Union
● Consumers Credit Union
Content Community Commerce

(CCC) Model
How the Content Community Commerce business model
works?
The Content Community Commerce business model is based
on the leverage of 3 C’s to help consumers make purchase
decisions: Content for inspiration and information; Community
for social validation and recommendations; and Commerce
for making the purchase.
How the Content Community Commerce business model

makes money?
Usually the Content Community Commerce business model
makes money from three revenue sources:
● ad revenue (banner displays)

● premium listing of professionals / service providers
● e-commerce commissions / affiliate (if it also offers a
marketplace of goods)
But some of them may sell their own goods and services too.
Companies that use Content Community Commerce

business model:
● Polyvore
● Motoroso
● Food52
● Purch
● Lush
● Citrus
Credit Card Model

How the Credit Card Model works?
A credit card is a thin rectangular-shaped piece of plastic or
metal issued by financial institutions to customers that allow
them to purchase goods and services with the condition that
they pay back the money, plus additional interests and fees
as per terms and conditions.

The credit card business model comprises five participants:
Customer, Merchant, Issuing Bank, Acquiring Bank, and
Payment Network.
Customer: The customer is the cardholder. The process

starts with the customer making a payment to an online or
offline merchant with their credit card.
Merchant: The merchant sells goods or services to the

customer and accepts payment with the customer’s credit
card.
Issuing Bank: The issuing bank is the bank that provides the
credit card to the customer. The issuing bank makes payment
to the acquiring bank for the purchases made by the
customer. The customer becomes liable to pay back the
money.
Acquiring Bank: The acquiring bank is the merchant’s bank,

and they are liable to make payments to the merchant. They
deposit funds into the merchant’s account after due
authorization.
Payment network: The payment network is responsible for

processing credit card transactions. They act as a bridge
between issuing banks and acquiring banks. Examples of
payment networks are Visa, Mastercard, and American
Express.
How the Credit Card Model makes money?

The issuing bank, acquiring bank, and payment processor
involved in the credit card business model make money in
different ways.

How credit card Issuing Banks make money
1. Interchange Fees: Every time a customer makes a

payment to a merchant through a credit card, the
merchant pays a processing fee, which is a
percentage of the transaction. Some portion of this fee
is sent to the issuing bank, and it is referred to as
interchange fees. It is often about 1%-3% of the
transaction;
2. Sign-up and Annual Renewal Fees: Some cards

charge sign-up fees to obtain their cards. They also
charge annual renewal fees;
3. International Transaction Charge: When cardholders

make a purchase outside their home country in the
country's currency, they pay a transaction fee on their
card at the conversion rate of the currency, and the
charge is levied to their account;
4. Interest Charge and Late Payment Fee: When

cardholders do not pay their monthly bill in full, the
unpaid credit card balance incurs interest rates of
varying amounts. A significant number of credit card
holders often pay less than the full monthly amount,
hence, issuing banks earn lots of money from them;
5. Cash Advance Fee: Issuing banks charge this fee

when cardholders use their credit card to obtain cash
at ATMs;
6. Reward Points Redemption Fee: Issuing banks charge

a small fee when customers make payments with their
customer reward points;
7. Interest on the conversion of outstanding amount to

EMI: Issuing banks often charge interest when
customers convert the outstanding payable amount to

equated monthly installment (EMI);
8. Balance Transfer Fees: When cardholders transfer

debt from one credit card to another to get a lower
interest rate, some cards charge a fee of 3-5% of the
amount transferred. Some issuing banks do not charge
this fee;
9. Co-branding and Marketing Revenue: Credit cards

sometimes offer their platforms to advertise other
businesses. They receive payments for such adverts;
10. Card Replacement Fees: If a cardholder’s card gets

lost, stolen, or damaged, some issuing banks may
charge a fee to replace such cards. However, not all
banks charge that fee.
How credit card Acquiring Banks make money
1. Acquirer Fees: Acquiring banks charge a commission

from the Merchant Discount Rate (MDR) for its role in
the credit card payment process;
2. Merchant Settlement Cycle Interest: The acquiring

bank settles merchants’ Point of Sale (PoS)
transactions at regular intervals. The bank typically
invests the money during the period when the money
resides with them. They earn interests from such
investments. Examples of such investments are
investment funds and bonds;
3. PoS Terminals: PoS terminals facilitate the card swipe

at purchase points. They are typically sold to
merchants for a one-time fee. Subsequently, the
merchant pays a commission per transaction, and it is
shared between the Acquirer, Issuer, and Payment
Network).

How credit card Payment Network make money
1. Service Earnings: Credit Card payment network

provides support services to financial institutions for
the delivery of their payment products and services to
customers. They make money by providing these
support services. Such support service includes
authorization, clearing, settlement, and network
access which facilitates transaction and information
processing;
2. International transaction revenues: Revenues are

earned from international transactions which entail
currency conversion.
Companies that use the Credit Card Model:
● Visa
● Mastercard
● American Express
Credit Union
How the Credit Union works?
A credit union is a member-owned non-profit financial
institution that provides banking services to members. Credit
union members can access the same kind of products and
services offered by traditional banks like loans, credit cards,
checking, and savings accounts. Credit unions are referred to
as Co-operative Societies in some countries.
Credit unions are owned by their members. Members save

with their credit union and pool their money together, which
technically implies that they are buying shares in the
cooperative.
The pooling of this money enables the union to provide

members with banking services and other financial products.
Income generated by the union is used to fund projects and
provide services for the benefit of members. Members
democratically elect the union's board of directors to manage
the union and ensure that interests are met.
Membership in a credit union was originally limited to people

who shared the same interests, such as a common employer
or resident in the same community. But recently, many credit
unions have relaxed their restrictions, allowing members of
the public to join.
How the Credit Union makes money?

Credit unions give loans to members. Interests are charged
on those loans to generate revenue for the union.
Money not lent to members is invested to yield a return for

the credit union.
Other sources of income include:
● Credit and Debit cards interchange and fees
● Mortgage sales, servicing rights, and real estate

lending fees.
● Mortgage sales
● Investment and insurance sales
Companies that use Credit Union:
● Consumer Credit Union (CCU)

● Alliant Credit Union (ACU)
● Pentagon Federal Credit Union (PenFed)
● Navy Federal Credit Union (NFCU)
Crowd Business Models

How the Crowd Business Models works?
Crowd-based business models are characterized by the
involvement of a community of contributors from outside the
traditional firm boundary, the use of digital peer-to-peer
platforms, and the transfer of value creation activities to a
crowd.
It typically entails external contributors having access to

resources and processes of the company, often resulting in
stronger interaction with these contributors and their
resources.
Crowd-based businesses like other businesses aim at value

creation. But for crowd-based businesses, their values are
co-created by their customers as co-producers in the
business modeling and implementation process.
The business grants open access to some of its resources

and processes so that customers or contributors can employ
their individual skills to create value in collaboration with the
company.
How the Crowd Business Models makes money?

Depending on the model of the Crowd-based businesses,
there are various means of making money applicable to such
businesses.

● Membership fees: There may be payable fees to
participate in the value creation model;
● Licensing fee: The business may sell licenses for its

products to be used by corporations;
● Product Sales: When the value created by the crowd

is hardware, then they might be sold to make money
for the company;
● Subscription: There may be paid subscriptions for

access to some high-value content like cloud-hosted
software.
Companies that use Crowd Business Models:
● Wikipedia
● Skillshare
● Quora
Crowd Renting
How the Crowd Renting works?
Crowd renting involves hiring a group of people to give the
immediate impression that a rally, protest, business, or other
public event is very popular and well-supported. Crowd
renting is commonly used by companies to promote new
products, by politicians to drive public interest in their
campaigns, as well as by interest groups to stimulate broad
public interests on issues they care about.
Crowds are hired by a crowd hiring company for a fee to give

an event the feel of being busy and popular. The
effectiveness of this is grounded on the herd instinct principle

— a behavior wherein people join groups and follow the
actions of others. People will often discard their own
judgment and join the bandwagon when it appears that a
multitude is following a trend.
How the Crowd Renting business model makes money?

Crowd renting companies provide rent-a-crowd services for a
fee, often charged at an hourly rate or per gig. This fee is
their major source of revenue.
Companies that use Crowd Renting:
● Crowds on Demand
● Crowds for Rent
● Easy Crowd
Crowd creativity
How the Crowd Creativity business model works?
The Crowd Creative Business Model works by reaching a
pool of designers and other creatives to develop original art,
media or content usually through a competition marketplace.
Once a customer buys a design service, the crowd creativity

website lists a design contest to thousands of designers
around the world who, if interested, starts to brainstorm ideas
and get customers feedback trying to get closer to customers
needs. Once the customer chooses a winner the ’prize’
money is transferred from the customer to the designer.
This model is mostly used in designer services platforms to

deliver graphic, logo or web design jobs but can also be used
to develop original products and concepts, including

branding, photography, advertising, film, video production,
apparel and consumer goods.
How the Crowd Creativity business model makes money?

The Crowd Creative Business Model makes money by
retaining a percentage of the money transferred from the
customer to the creative winner.
Companies that use Crowd Creativity business model:
● 99Designs
● Crowdspring
● Design the Crowd
● Arcbazar
● Tongal
● Zooppa
Crowdfunding
How the Crowdfunding business model works?
The Crowdfunding Business model works by helping projects
and new ventures get funded through money donations from
a large number of people in exchange of unique rewards
Crowdfunding websites allow a lot of people to each

contribute a small amount of money to off-the-radar projects.
This concept, created in 2009, has become a huge catalyst in
redefining how creative projects and new ventures are
funded.

How the Crowdfunding business model makes money?
The classic crowdfunding business model makes money with
commissions on funds raised.
Companies that use Crowdfunding business model:
● Kickstater
● Indiegogo
● GoFundMe
● Teespring
● Patreon
Crowdgifting
How the Crowdgifting business model works?
Crowdgifting is the raising of funds for a particular purpose
through donations from a large number of people (the crowd)
in small amounts over a short period of time.
The crowd gifting platform facilitates the interaction between

fundraisers and the crowd. A fundraiser starts a time-bound
fundraising campaign with the approval of the platform. Small
amounts of donations are made by the people via the
platform. By the expiration of the allotted time frame of the
fundraising, the money realized is paid to the fundraiser.
Some platforms operate an all-or-nothing funding model. This

means that, if you reach your target, you get the money and if
you don’t, everybody gets their money back — no hard
feelings and no financial loss.

How the Crowdgifting business model makes money?
Crowd Gifting platforms usually charge fundraisers a
percentage of the total amount raised, typically about 15%.
Companies that use Crowdgifting business model:
● Indiegogo
● GoFundMe
● KickStarter
Crowd innovation
How the Crowd innovation business model works?
The Crowd Innovation Business Model (also knows as the
Open Innovation Business Model) works by helping
companies solve problems and find innovation opportunities
using external contributors.
This business model has been increasingly popular within

large corporations as their bureaucratic and slow processes
put them in disadvantage position as innovators.
Similar to the Crowd Creativity the whole crowd innovation

system is based on contests and prizes.
How the Crowd innovation business model makes money?

The Crowd Innovation Platforms makes money by charging a
listing fee and a commission of the paid prize.
Companies that use Crowd innovation business model:
● Innocentive

● Chaordix
● IdeaConnection
● Innoget
● NineSigma
● Ideaken
Crowd knowledge
How the Crowd knowledge business model works?
The Crowd Knowledge Business Model works by leveraging
the wisdom or intelligence from a group of people in order to
help research or decision making.
Differently from the Crowd Innovation, crowd knowledge

does not work with contests and focus primarily on a
data-information-knowledge approach to extract wisdom of
the crowd shared in its online communities.
Also known as Distributed Knowledge, Collective Intelligence,

Collective Wisdom or Wisdom of the Crowd.
How the Crowd knowledge business model makes money?

Crowd Knowledge Businesses makes money by selling the
information gathered in its online communities without
exposing individual private data.
Companies that use Crowd knowledge business model:
● Patients Like Me

● Trend Watching
● Organized Wisdom
● Trend Hunter
● Cure Together
Crowd labor
How the Crowd Labor business model works?
The Crowd Labor Business Model is the most popular type of
crowdsourcing and works by leveraging a pool of on-demand
professionals.
How the Crowd Labor business model makes money?

The Crowd Labor Business Model makes money by charging
a small fee from the transferred money between the
customer and the service provider.
Companies that use Crowd Labor business model:
● Task Rabbit
● Elance
● Mechanical Turk
● uTest
● UpWork
● Crowd Flower
● Freelancer

● Crowd Content
Crowd learning
How the Crowd Learning business model works?
The Crowd Learning Business model works by allowing
people learn from the expertise of others. By connecting a
great variety of teachers with learners, the model benefits
from the long tail.
How the Crowd Learning business model makes money?

The Crownd Learning business model generate revenue by
offering the expertise from teachers (experts) to the end
consumer, so the end consumer will pay to learn from the
expert.
Companies that use Crowd Learning business model:
● Skillshare
● Duolingo
● Pow How
Crowdlending
How the Crowdlending Business model works?
The Crowdlending model allows individuals and businesses
to raise money through the small amounts of money
contributed by a group of people (the crowd) in exchange for
returns.
A borrower applies for a loan on the crowdlending platform.

The platform assesses the risks involved and sets guidelines

like interest on loans, terms of repayment, etc. The investors
agree to the terms of the loan and the transaction proceeds.
How the Crowdlending Business model makes money?
● The investor gets interested paid on the loan.
● The crowdlending platform gets commissions from the

transaction.
● The platform also makes money through

advertisements.
● Some platforms charge sign-up fees from users.
Companies that use Crowdlending business model:
● Mintos
● Swaper
● PeerBerry
Crowdsourcing
How the Crowdsourcing business model works?
The Crowdsourcing Business Model works by leveraging the
power of the crowd to deliver services or funding to
customers through an online platform.
The word comes from the combination of ’crowd’ and
’outsourcing’ and has been spreading in many formats and
different objectives.

How the Crowdsourcing business model makes money?
The Crowdsourcing Business Model makes money by
facilitating payments between customers and the crowd,
retaining a small percentage of the money transfer.
Companies that use Crowdsourcing business model:
● 99Designs
● Innocentive
Cutting out the middleman

How the Cutting Out The Middleman business model
works?
The Cutting Out the Middleman Business Model works by
removing intermediaries in the distribution network and
selling directly to the final customer.
Also know as ’Disintermediation’ strategy is an increasing

practice used by internet companies that wants to handle
distribution channels themselves and increase market
transparency.
The model makes great use of technology and economies of

scale.
How the Cutting Out The Middleman business model

makes money?
The Cutting Out the Middleman business model makes
money the same way retail makes money (by selling products
and charging a price to the final customer) but they do
increase margins (and consequently can have higher profits)
with less layers of distribution (intermediaries).

Companies that use Cutting Out The Middleman business
model:
● Tesla Motors
● Warby Parker
● Dell
● Bryght
● Crane & Cannopy
D2C
How the D2C business model works?
Direct-2-Customer (D2C) is an eCommerce model wherein
the manufacturer or producer sells directly to consumers.
This effectively cuts out the middlemen — such as third-party
wholesalers, distributors, and retailers —, thus allowing the
D2C company to offer its products at lower prices than
traditional retail businesses.
The D2C business model utilized eCommerce and the

internet to disrupt the traditional sales model. The traditional
sales model required a producer who sells to w wholesaler
who then sells to retailers who eventually offer the product to
the final consumer.
The D2C model has ignored this long chain and harnessed
the power of the internet and eCommerce to sell their
products directly to the final consumer.
This, however, does not mean that D2C companies engage in

all the sales tasks with their resources. They typically have
partnerships with logistics and delivery firms to ensure

seamless product delivery to the end consumer.
How the D2C business model makes money?

D2C businesses make the majority of their revenue through
product sales to end consumers.
They also earn through advertisements. They offer their

platform to other businesses to advertise their products and
collect a fee for the service.
Companies that use D2C business model:
● Apple
● Nike
● Revelry
Daily Deals
How the Daily Deals business model works?
Daily deals is an eCommerce business model wherein
businesses offer products for sale for a period of 24 to 36
hours at heavily discounted prices. It is often used by
businesses to reach new customers. Potential customers may
need to register as members to participate in the
deal-of-the-day offer.
Retailers market goods and services at heavily discounted

rates to customers of the deal company in the hope to attract
new customers, building brand loyalty, and selling surplus
inventory. The deal company often receives a portion of the
retailer’s profit.
Daily deal companies work frequently with online retailers

and local businesses to help them develop deals that bear

discounted prices in comparison to recommended retail
prices.
How the Daily Deals business model makes money?

Daily deal businesses make money through the commission
they receive on every sale made by businesses through the
deal platform.
They also generate revenue when they sell vouchers and

car-linked deals that connect local businesses and
consumers.
Some daily deal companies also sell products directly to

consumers to increase their revenue.
Companies that use Daily Deals business model:
● Groupon
● GroupPrice
● LivingSocial
Dealership
How the Dealership works?
The dealership business model works as a sales agent,
intermediary or distributor of products.
Dealers may have an authorisation/contract to sell products

from a specific company (usually a manufacturer) and it’s a
common business model in the following industries:
● antiques
● arts

● automobile
● finance (securities and derivatives) q gambling
● drugs
How the Dealership makes money?

The dealership business model makes money in numerous
ways. The most common are: i. from gross margins by selling
for a higher price than it has bought; and ii. from commission
or incentives. In car dealership both ways are possible and
can be combined.
Other sources of revenue come from add-on services or

products, such as maintenance, insurance or financing.
Companies that use Dealership:
● Toyota
● Dave Smith
● Grays Antiques
Debt-bases crowdfunding
How the Debt-bases crowdfunding business model works?
Debt-based crowdfunding is when a number of investors (the
crowd) loan money out to a business or individual with the
expectation of repayment plus interest over time. This
transaction often takes place over a regulated platform. The
process is often simpler than those of traditional bank loans.
It tends to offer lower interest, rapid approval time, more
favorable terms, and a simpler process in general.
The potential borrower submits a loan request to a

debt-based crowdfunding platform. The platform then

assesses the suitability of the request. If the application is
approved, the platform then offers the potential borrower
rates of returned and applicable fees in correlation with the
level of risk the loan poses to potential investors. The higher
the risk, the higher the rate of return expected by investors.
The offering is then launched on the platform, clearly stating

the amount and time frame. It closes once the time runs out,
and the money is then issued to the borrower.
Debt-based crowdfunding platforms provide a secure and

easy-to-use service.
How the Debt-bases crowdfunding business model makes

money?
Borrowers pay a percentage fee to debt-based crowdfunding
platforms if the fundraising campaign attains success.
Companies that use Debt-bases crowdfunding business

model:
● Funding Circle
● Zopa
● Lending Club
Demand-side platform
How the Demand-side platform business model works?
A demand-side platform (DSP) is an advertising technology
(AdTech) that uses an automated programmatic advertising
platform that allows advertisers to purchase ad space on an
impression basis from multiple ad sources via supply-side
platforms and ad exchanges. A DSP simply allows the
purchase of advertising with the help of automation.

Advertisers and ad agencies use DSPs to buy ad inventory
from publishers through the ad exchange, just in the same
way stockbrokers buy stock from companies through the
stock exchange.
Demand-Side Platforms enable real-time buying and selling

of ads through an automated system. Real-bidding implies
that ad placements are auctioned off in milliseconds.
An advertiser selects their target audience and sets up their
ad campaign in a DSP. Publishers equally up-load their ad
inventory on the DSP through ad exchanges and supply-side
platforms. These platforms offer the ad impression to the
DSP, which then analyzes the data about the user and
determines the user’s worth based on their relevance to the
targeting criteria. The advertiser competes with other
advertisers for the ad impression by placing bids in real-time.
The DSP buys the impression and the ad is displayed on the

publisher's site.
How the Demand-side platform business model makes

money?
DSPs charge a minimal monthly fee to cover the cost per mile
(CPM) for services rendered.
A percentage of an advertiser’s spend is paid to the DSPs.
Profit accrues to the DSP when they bid up to a predefined

CPM for buyers and take the difference between the bid and
the charge price.
Some DSPs also charge initial fees to use their platform.
Companies that use Demand-side platform business model:
● Basis Technologies

● Google Marketing Platform
● Amazon DSP
Dematerialised services
How the Dematerialised services business model works?
Dematerialization Service (DEMAT), is the conversion of
physical shares and securities into electronic form. DEMAT
accounts hold shares and stock certificates in electronic
format instead of paper form. This increases the safety and
security of shares and prevents their loss and forgery. It has
become the norm in the financial industry.
The Dematerialization process starts with the opening of a

DEMAT account. To open a DEMAT account, you need to
select a depository participant (DP), i.e, a financial institution
or brokerage service firm which offers DEMAT services.
In order to convert physical shares into electronic format, a

dematerialization request form (DPF) is obtained from the
Depository Participant (DP), filled, and submitted with the
shares certificate. The Depository Participant then processes
the request and shares certificates with the company,
registrars, and transfer agents simultaneously through the
depository. Upon approval of the request, the physical share
certificates are destroyed and confirmation of
dematerialization is sent to the depository.
The depository then confirms the dematerialization of shares

to the depository participant, and a credit in the holding of
shares will show up on the investor’s account electronically.
The process takes place within 15 to 30 days after submission
of the dematerialization request.

How the Dematerialised services business model makes
money?
Dematerialization service businesses charge an annual issue
fee from issuers as decided by the market regulator.
They charge a transaction fee on every transaction

conducted by investors.
Companies that use Dematerialised services business

model:
● CDSL Ltd.
● Central Securities Clearing System Plc (CSCS)
● Kotak Securities
Department Stores
How the Department Stores business model works?
Department stores are retail firms offering a wide range of
merchandise in different areas of the store. Each area
(department) specializes in a product category.
A departmental store is usually divided into various

departments, each dealing with a special range of goods or
targeting specific types of market segments.
They buy goods from suppliers on long credit terms. This

gives them enough liquidity to increase their inventory. They
also offer sections (departments) to manufacturers and
brands for advertising and branding.
How the Department Stores business model makes money?

Departmental stores make most of their revenue through the

sale of goods.
They also make additional revenue by holding major

seasonal sales. The product life cycle of some products is
short, hence, stores have inventory left over by the time they
have to replace old products with new products. Then, they
carry out a publicized sale for the leftovers at lower prices
than the original retail prices.
They also fetch revenue from advertising and branding

carried out by manufacturers in the store.
Companies that use Department Stores business model:
● Macy's
● JCPenney
● Bloomingdale's
Destination Club
How the Destination Club business model works?
A destination club also called a vacation club provides access
to an array of high-quality, luxury, spacious, and fully serviced
vacation homes in different locations. Membership in a
destination club offers lots of perks, such as access to the
club’s properties and vacation homes around the world.
Members pay a one-time membership fee and annual

membership dues to maintain their membership and gain
access to the club’s properties. This grants them access to
members' exclusive services. Members often have access to
a portfolio of luxurious homes in high-end destinations
around the world.

Club inventory is booked based on availability. Often, clubs
have different membership grades which offer different levels
of reservation priority, personalized services, and resort
facilities. Membership fees are used to lease or buy
properties. Members have no ownership stake in the
properties, and they receive a partial or no refund when they
resign their membership.
How the Destination Club business model makes money?

Destination Clubs earn income from vacation ownership
sales, rental, resort management, and other services.
Companies that use Destination Club business model:
● Inspirato
● The Hideaways Club
● The Ritz-Carlton Destination Club
Digital Transformation
How the Digital Transformation business model works?
Digital transformation is the use of computer-based
technologies to transform existing processes, goods, and
services, or create new ones to meet the ever-evolving
business and customers’ requirements. Its aim is the
remaking of management and operations of businesses and
how value is delivered to customers, with the intent to make
them more efficient, accessible, and scalable.
The digital transformation model follows an essential 5-step

process:
● Digitize documents: Convert paper documents into an

electronic filing cabinet version for digital archiving
and retrieval;
● Organize Documents: Obtain metadata with advanced

capture to be managed in centralized storage;
● Automate processes: Use electronic forms to digitize

processes;
● Streamline processes: Increase the efficiency of

cross-functional processes;
● Transform processes: Align processes with business

goals in order to drive innovation.
How the Digital Transformation business model makes

money?
Digital transformation increases the efficiency in acquiring
new customers through better-targeted ads, and revision and
extension of their existing portfolio of products and services,
therefore increasing sales of goods and services.
Companies that use Digital Transformation business model:
● Brick by Brick: Lego
● Delivery by Data: DHL
● Smart City through Sound Transit
Direct Selling
How the Direct Selling business model works?
The Direct Selling business model works by creating a
marketing and sales system directly to customers and away
from a retail store.

A common definition says that direct selling is based in the
direct personal presentation, demonstration, and sale of
products and services to consumers, usually in their homes or
at their jobs.
Usually direct selling businesses relies in a salesforce of

independent professionals enabling entrepreneurship and
opportunity for millions of people worldwide.
How the Direct Selling business model makes money?

The direct selling business model, generate revenue by
selling products or services, using salespeople, who sell
directly to customers.
Companies that use Direct Selling business model:
● Avon
● Natura q Amway
● Herbalife
● Mary Kay
● Tupperware
Directory Model
How the Directory Model business model works?
A directory is a registry or index of businesses that promotes
interaction and exchange of information between businesses
and consumers. Listings in a directory are grouped into
categories. They are just yellow pages.
A directory creates as many business profiles as possible.

The directory also gathers data on these businesses
themselves or from the companies that provide the data. The
directory owners then drive traffic to its pages through
different means like SEO so that consumers can easily find
them and use them in their search for businesses.
How the Directory Model business model makes money?

Directory businesses make money through a paid listing of
businesses, i.e., businesses pay to get listed in the directory.
Featured listings and special places for listings are placed in

prominent positions to attract more customers. This attracts a
special fee paid to the directory.
Directories use their platform to advertise other businesses

for a fee.
Collecting membership fees from listing owners is another

source of revenue for directories.
Companies that use Directory Model business model:
● Yell.com
● Whitepages
● Touch Local
Discount Clubs
How the Discount Clubs business model works?
A discount club is a business that offers its goods and
services at a discount to only its members. They usually have
a huge catalog of products to attract customers. Customers
have to pay a membership fee.

Customers who wish to shop in discount clubs purchase a
membership to access the store and make purchases.
Discount clubs offer lower prices than normal retail outlets.
They often buy directly from manufacturers, limit hours of

operations, and reduce labor by a more efficient storage
system. All of these help them lower their cost of operations.
How the Discount Clubs business model makes money?

Sales of products are a big source of revenue for discount
clubs. Membership fees also fetch big revenue for them.
Companies that use Discount Clubs business model:
● Aldi
● Costco
● BJ
DIY / Power to the people

How the DIY business model works?
Do-It-Yourself (DIY) means people doing something
themselves instead of paying someone else to do it for them.
They often sell products to Do-It-Yourself customers,
Do-It-For-Me customers, and professionals.
Companies using the DIY business model typically offer

products for sale to customers. They often organize regular
DIY workshops for customers, and customers can choose to
attend them.
They teach installations, repairs, and improvement tasks at

different skill levels. They also maintain expert customer
service to guide customers and provide knowledgeable

advice on their products to help them maximize the products’
benefits.
How the DIY business model makes money?

DIY companies generate revenue through product sales.
When customers need professionals to work for them, DIY

companies can provide professional services to them through
their vast network of professionals for a fee.
Companies that use DIY business model:
● Ikea
● Home Depot
● Lowe's
Donationware
How the Donationware business model works?
The Donationware business model is based in the offer a fully
operational and unrestricted software to the public for free
but requesting an optional donation to its developer
Also described as a ’variation of the freeware model’ it’s very

common between independent software creators and has its
efficiency questioned by specialists.
As it does not guarantee a revenue stream, those who

choose to go with donationware must have a lean cost
structure without.
This model may also be confused with crowdfunding.

How the Donationware business model makes money?
The Donationware business model makes money by asking
for donations from its customers. Some may ask for donations
in a very discrete way, some others may be very.
Companies that use Donationware business model:
● VLC Media Player q FileZilla
● AdBlock
● GetSocial
Double auction
How the Double auction business model works?
A double auction is a process of buying and selling goods
where buyers and sellers submit prices they deem
acceptable.
Potential buyers submit their bids, while potential sellers

submit their ask price. When a match is found between a
buyer’s bid and a seller’s ask price, the trade is executed.
Typically, a trade takes place when a buyer accepts a seller's
asking price and when a seller accepts a buyer’s bid.
How the Double auction business model makes money?

Sellers earn money by selling above cost, and buyers earn
money by buying below value. Auction houses earn their
money through commission on sales.
Companies that use Double auction business model:
● Christie’s
● Sotheby’s

● Beijing Poly International Auction Company
Dutch auction
How the Dutch auction business model works?
A Dutch auction is an auction process where the auctioneer
starts with a high asking price, and then, reduces it until there
is a bid for the item, or it reaches a predetermined reserve
price. It is frequently used to sell goods that need to be sold
quickly. e.g., flowers.
Prior to the commencement of the auction, information on the

items to be sold is presented to the bidders and publicly
displayed.
The auctioneer starts with a price offer that is typically in

excess of the amount the seller expects to receive. The price
is then lowered in steps until a bidder accepts the price. The
bidder is pronounced the winner and pays the price for the
item. The bidder accepts the price when it reaches an
acceptable level, and so that someone else does not bid for
it.
A Dutch auction is an alternative to a traditional auction,

where bids are placed in increasing value until nobody is
willing to bid higher.
How the Dutch auction business model makes money?

Revenue is earned from sales commission paid by buyers.
Auction houses charge a commission on each sale that takes
place.

Companies that use Dutch auction business model:
● Christie’s
● Sotheby’s
● Phillips
e-Procurement
How the e-Procurement business model works?
e-Procurement (Electronic Procurement) is the requisition,
ordering, and buying and selling of supplies, equipment,
works, and services online. e-Procurement centralizes and
automates interactions between all the value chain partners,
including the organization and customers.
e-Procurement works in 5 steps:
1. The user identifies needed goods or services on the

company’s website and submits their purchase
request with just a click;
2. Once the user needs have been recognized, the

system may obtain quotes or bids from potential
suppliers. Suppliers receive a request for quotation
(RFQ) inviting them to submit a bid for the purchase
contract;
3. After the bids have been received and negotiations

concluded, a supplier is selected, and the purchase is
authorized through the approval process;
4. The purchasing team carries out the electronic drafting

of a purchase order (PO) or purchase agreement. It is
then sent to the supplier in the form of an electronic
document or through a marketplace, mail, or fax;

5. The supplier then goes about preparing the products
for delivery.
How the e-Procurement business model makes money?

e-Procurement makes the purchase process easier for B2B
customers, thus they are more likely to buy more and the
company gets paid faster.
The automation process of e-Procurement affords the sales

team more time to pursue revenue-generating activities
instead of laboring over paperwork.
Automation also reduces the labor cost of companies, thus

increasing profit margin.
Companies that use e-Procurement business model:
● SAP Ariba
● Basware
● Jaggaer
Early exit strategy

How the Early exit strategy business model works?
An early exit strategy is an emergency plan typically used by
traders, investors, and venture capitalists to liquidate their
financial assets or dispose of tangible business assets in
order to safely exit from the market upon meeting certain
predetermined criteria. It is how an investor plans to leave an

investment.
Early exit strategies are often executed to maximize profits in

a successful business or minimize the loss in a struggling
business. For an early exit strategy to work well, there are key
steps that should be taken.
● Prepare your finances and put them in order;
● Speak with stakeholders about your decision;
● Transfer your responsibilities to others;
● Consider your exit options.
An exit option might be to sell to a new owner or liquidate,

and shut down the business.
How the Early exit strategy business model makes money?

Initial Public Offering (IPO) is a popular exit strategy used to
make money for business stakeholders.
An outright sale of the business will fetch revenue for

stakeholders involved in the business.
Through mergers and acquisitions, a bigger company could

pay to take over (merge with) a smaller company.
Stakeholders of the smaller company stand to generate some
income from the deal.
Companies that use Early exit strategy business model:
● Intel Acquires Mobileye
● Disney bought Some of 21st Century Fox's Assets
● Facebook IPO with US$16 billion raised (May 2012)

Embbebed Finance
How the Embbebed Finance business model works?
Embedded finance is the provision of financial services to the
public by non-financial providers. Such financial services
include payments, lending, and insurance. Embedded finance
makes it easier for the public to access financial services
anytime, and anywhere they need them.
Online stores that seemingly have nothing to do with finance

could integrate payments, debit cards, loans, insurance, and
even investment instruments into their platform such that
users do not need to visit other platforms to get these
services. And users can also transfer money or obtain loans
through applications that, seemingly, have nothing to do with
finance
How the Embbebed Finance business model makes

money?
Embedded finance helps companies to create new revenue
streams in payments, commissions, subscriptions interest on
loans, and improved customer retention and engagement.
Companies that use Embbebed Finance business model:
● Lendflow
● Hydrogen
● Paystack

Embbeded Social
How the Embbeded Social business model works?
Embedding refers to the integration of media content like
images, videos, and links into social media posts or other
Web media and platforms.
Embedding external content into a business platform can

increase engagement around your platform. Embedded
content has an appeal to users as it appears as part of the
platform, hence, it increases click-through and engagement.
How the Embbeded Social business model makes money?

The increased customer experience through embedded
social may lead to increased sales of goods and services for
businesses.
Companies that use Embbeded Social business model:
● Embed Social
● SmarterQueue
● Zoho
Employment Agency Business

Model
How the Employment Agency business model works?
An employment agency is an organization that helps people
to find jobs and helps companies to fill their staffing needs.
They simply help to matchmake jobseekers and companies.

Companies pay the Employment Agency to find suitable
employees for them. Jobseekers contact the employment
agency for jobs or simply apply for jobs of their choice
through the agency. The agency then conducts interviews for
the jobseeker and matches them with appropriate companies
to fill specific positions. The client company typically pays the
selected jobseeker through the employment agency. But if
they decide to hire the jobseeker permanently, then they will
pay the candidate directly.
How the Employment Agency business model makes

money?
An employment agency generates revenue by billing a
percentage of the annual basic salary of the successful
candidate hired as permanent staff, typically between 15-30%.
They also add some margin to the hourly rate of freelance or

temporary workers they provide for client companies.
Agencies get paid for on-demand recruitment. This is when

client companies hire agencies to provide support and
increase the capability of their internal recruiters.
Companies that use Employment Agency business model:
● Adecco
● Randstad NV
● Kelly Services Inc.
English auction
How the English auction business model works?
An English auction is a sales method on a single quantity of
product where different buyers place their bid for the product

at increasing prices and the highest bidder gets the product
and pays for it.
The auctioneer opens the auction by announcing a base

price set by the seller of the product. Then buyers place
increasing bids on the product. The highest bidder at any
point in time is considered the standing bid until a higher bid
is placed by another buyer. If no higher bid is placed within
the allotted time, then the standing bid is declared the winner
and the item is sold to the highest bidder at their bid price.
How the English auction business model makes money?

Auction houses retain a percentage of the proceeds from the
sale of merchandise. Auctioneers receive a commission or
fee from the seller of the merchandise.
Companies that use English auction business model:
● Sotheby's
● Christie's
● Phillips
Equity Crowdfunding
How the Equity Crowdfunding business model works?
Equity crowdfunding is a method of raising capital from
investors in exchange for a proportionate amount of shares in
a company. The shareholder is a partial owner of the
company, thus, eligible to profit if the company does well.
They can also lose if the company fails.
Equity crowdfunding is often regulated by the authorities.

Though it is not the same as selling shares on the stock
exchange, your company is still offering equity to investors in

exchange for capital.
This model is often used by startup businesses looking for

investments to achieve establishment. Investors give money
to them for some shares of the company. If the business
succeeds, then the value of the share goes up. The same
also applies if the business struggles.
How the Equity Crowdfunding business model makes

money?
The business generates capital from money given to it by
investors.
Investors get a return on their investment if the business

succeeds. They may later decide to liquidate their stake in
the business at a later time.
Companies that use Equity Crowdfunding business model:
● Wefunder
● SeedInvest
● CircleUp
Factoring
How the Factoring business model works?
The Factoring business model works by purchasing accounts
receivables at a discount from customers other businesses.
The sale of the receivable, usually an invoice, transfers

ownership of the receivable to the factor, indicating the factor
obtains all of the rights associated with it. The receivable
becomes a factor's asset, obtaining the right to receive the

payments made by the debtor for the invoice amount without
restrictions.
Although factoring is a type of a financial transaction offered

by many financial institutions (e.g. banks), there are many
factoring focused businesses and brokers/agents.
How the Factoring business model makes money?

Factoring Business Model makes money by charging a
discount fee which includes an interest rate and the credit
risk assumed and by offering supportive services such as
creditworthiness information and collection calls.
The factor's overall profit is the difference between the price

it paid for the invoice and the money received from the
debtor, less the amount lost due to non-payment.
Companies that use Factoring business model:
● Capital Plus
● Charter Capital
● American Receivables
● Crest Mark
● Factor Funding Co.
● Riviera Finance
Fair Trade
How the Fair Trade business model works?
Fairtrade is a system aimed at helping producers in the
developing world to achieve sustainable and equitable trade

relationships with their trading partners. It is designed to offer
better trade terms to producers.
Fairtrade gets producers to organize into cooperatives.

Fairtrade sets s minimum price producers are paid to sell their
produce to fairtrade. Additionally, producer organizations
receive the fairtrade premium. It is up to the producers to
decide how to use the premium. They could build schools,
and hospitals, or invest in better equipment.
How the Fair Trade business model makes money?

A license fee is paid by companies using the FAIRTRADE
mark. It is paid to the fairtrade foundation, and it constitutes
over 85% of the fairtrade income. Donations and grants are
also received from organizations, and they make up between
10-20% of their income.
Companies that use Fair Trade business model:
● Tesco
● Starbucks
● Nestlé
Fast Fashion
How the Fast Fashion business model works?
Fast fashion refers to the design, manufacturing, and
marketing method aimed at replicating trendy catwalk and
high fashion designs through mass production at low cost
and supplying them to retail stores when demand is highest.
Fashion shows typically set the stage for the new trend. It
moves quickly from the designer sketch to retail stores as
quickly as possible.

Fast fashion companies have vertically integrated supply
chains, hence they are able to produce cheaply. The clothes
are priced cheaply and do not last. They are aimed at a new
trend, are to be worn only a few times and then discarded for
the next fashion trend.
How the Fast Fashion business model makes money?

Most of their revenue is based on the sales of their fashion
products.
Companies that use Fast Fashion business model:
● Zara
● H&M Group
● Forever 21
Financial Intermediary
How the Financial Intermediary business model works?
A financial intermediary refers to a third party acting as a
middle man between two parties in order to facilitate a
financial transaction. Examples of financial intermediaries are
banks, investment funds, and stockbrokers. They reallocate
uninvested capital to productive sectors.
Financial intermediaries typically reallocate excess or

uninvested capital to sectors or parties in need of these
funds. For example, commercial banks collect money from
savers and reallocate those funds to people and businesses
who need money in the form of loans, mortgages, or capital
for business.

How the Financial Intermediary business model makes
money?
Financial intermediary generates profits from interest on
loans. They also make money from service charges and fees.
Companies that use Financial Intermediary business model:
● Banks
● Credit Unions
● Pension Funds
Flash Sales
How the Flash Sales business model works?
Also know as One Deal a Day or Deal-of-the-Day the Flash
Sales Business Model works by offering one single product
for a limited period (usually 24 hours) at a huge discount.
In its essence the model allows retailers to market discounted

products or services to a large base of customers from flash
sales customers. It’s a great way to quickly sell surplus
inventory or to promote your business to a new base of
customers.
The model became popular in the internet in 2004 with

Woot.com and impressed with its viral power and
high-volume sales in such a short period of time. Websites
using this model leverage the power communication of email
and social networks by asking those who were interested in
viewing product offers to enter their email addresses in order
to keep attracting them back through email newsletters.

How the Flash Sales business model makes money?
Flash Sales Business Model makes money by charging a
commission fee from the sales. The commission is usually
high (varying from 20% to 50%) ripping off all the profit from
the retailer.
Companies that use Flash Sales business model:
● Woot.com
● uBid
● Groupon
● Privalia
● Benjamin
Fractional Ownership
How the Fractional Ownership business model works?
The fractional ownership business model works by offering
acquisition and administration services of the ownership of a
high-value tangible asset (usually a jet, yacht, sport car or
resort real state) shared between several independent parties
as a way to mitigate risk and reduce costs of maintaining an
asset that will not be used full time by one owner.
Fractional ownership simply means the division of any asset

into portions or shares. Each owner is guaranteed a
prescribed amount of access to the asset, which typically can
be used or offered to the public as rental or charter, the
income is usually split between the management company
and the fractional owner.

Conceptually, fractional ownership is not the same as
timeshare. Fractional ownership affords much of the freedom
and usage benefits offered in timeshare, however, the
fundamental difference with fractional ownership is that the
purchaser owns part of the title (as opposed to units of
"time").
How the Fractional Ownership business model makes

money?
Fractional ownership companies make money with sales
commissions and by charging a monthly or annual
management fee.
Companies that use Fractional Ownership business model:
● Sea Net
● Net Jets
● e25
● Elite Destination
● Ritz-Carlton Destination Club
Franchising
How the Franchising business model works?
The Franchising Business Model works by offering the right
to use a company’s brand and operational model for
determined period.
There are two important players in the franchising business

model: the franchisee and the franchisor.

For the franchisee it’s a safer way to start and operate your
own business (hit the ground running) as they will be able to
open identical business of a proven brand and business
model.
For the franchisor, the model is a great growth and

distribution strategy without high investments / disbursement.
How the Franchising business model makes money?

The franchising business model works in multiple ways.
There’s an initial fee for selling the franchise rights (also
called fret agreement), a monthly royalty for the trademark
(and publicity) and a percentage of the monthly sales.
Some franchises may also charge a fixed fee (more common

within home based or micro franchising) instead of
percentage of monthly sales. Some other may also sell
supplies (with an exclusivity supply selling contract).
Companies that use Franchising business model:
● McDonald’s
● Starbucks
● Subway
● 7-Eleven
● Dunkin’ Donuts

Freemium / Free
How the Fremium business model works?
The Freemium Business Model works by offering a digital
offering (software, media, game or web services) free of
charge but with an optional charged version with premium
features, functionality or virtual goods.
The word Freemium comes from the combination of Free and

Premium and it’s also considered a pricing strategy, in some
way an evolution of the freeware model (commonly used by
software since 1980s)
The model is commonly used by software as a service

companies in which the cost of distribution is very small as
the free option may represent the option of most users.
How the Fremium business model makes money?

In order to make money with the freemium business model
the costs of distribution to all users (free and premium) must
be lower than the revenue generated from premium
accounts.
This may sound easy in the digital world, but it is not. It’s a
huge effort to turn free customers into paying customers. The
success indicator is 5% of paying customers and 95% of free
customers.
Companies that use Fremium business model:
● Mailchimp
● Survey Monkey q Skype
● Dropbox

● Evernote
Freeware
How the Freeware business model works?
Freeware is proprietary software, program, or application that
is available for free download, installation, use, and sharing.
They are available for use at no cost to general end-users,
but they are different from free software.
Freeware is usually released by a company to the public for

use at no cost. Though the company retains proprietary rights
over the freeware, the end-users can use them for free
without having to pay. But they might come with restrictions
on some features.
How the Freeware business model makes money?

Some freeware run ads and promotions on their freeware
platform to generate income.
Donations are also received from happy customers and

organizations.
Some freeware comes with restrictions on its features. Users

can only unlock those features after making a payment to get
a license key.
Companies that use Freeware business model:
● Skype
● Telegram
● WeChat

Full Stack Model
How the Full Stack Model business model works?
A full-stack model is one where a business controls the
production, distribution, and support of its own product. It is
typically used in the technology world. By eliminating the
need for intermediaries, a full-stack company addresses the
complete value chain from end to end, controlling the entire
customer experience.
The full-stack model requires a holistic approach. It is an

approach that incorporates vertical integration into its
operations. It owns and controls in full all the value chain.
They make all the components of their products in-house
instead of outsourcing. Typically, they require a wide range of
domain knowledge.
How the Full Stack Model business model makes money?

By eliminating as many intermediaries as possible, the
full-stack business model saves time and money.
Companies that use Full Stack Model business model:
● Uber
● Lyft
● Urban Company

Generalized second-price
auction
How the Generalized second-price auction business model
works?
The generalized second-price auction gives the highest
bidder (the winner) the chance to pay less than their original
bid offer.
Each bidder places a bid. The highest bidder gets the first
slot, the second-highest, the second slot, and so on, but the
highest bidder pays the price bid by the second-highest
bidder, and the second-highest pays the price bid by the
third-highest, and so on.
The highest bidder is declared the bid winner, but they will
pay the price bid of the second-highest bidder.
How the Generalized second-price auction business model

makes money?
The bid winner pays a commission to the auction house.
Companies that use Generalized second-price auction

business model:
● eBay
Gift Card Business Model

How the Gift Card business model works?
A gift card is a prepaid debit card that contains a specific
amount of money that can be spent on purchases or other

financial transactions. A gift card can be open-loop or
closed-loop. An open-loop card can be used anywhere the
card brand is accepted, while a closed-loop card can only be
used in specific merchant stores.
Gift cards are usually preloaded with some measure of

money that a user can spend. The card works via a
collaboration between a guarantor, a bank, and a processor
working together to ensure a smooth exchange. The recipient
considers it as free cash, while the store considers it as
income.
How the Gift Card business model makes money?

Many Open-loop card issuers charge a small fee to cover the
production costs and processing fees.
The business earns extra marginal revenue from a gift

cardholder who spends above the balance on the card.
Companies that use Gift Card business model:
● Walmart gift card
● Amazon gift card
● eBay gift card
Group Buying
How the Group Buying business model works?
The Group Buying Business Model works by offering
products or services at a massive discount (usually over 50%)
with a trigger of a minimum number of buyers.
The model is based on the idea of utilising the power of

buying in bulk to promote benefits for both the vendor and
the customers. For customers is a great way to get discounts
to buy cheap and for vendors it’s a great way to attract new
customers.
Also known as collective buying.
How the Group Buying business modelmakes money?

The Group Buying Business Model makes money by charging
a commission (between 20% to 50%) of the sale.
Companies that use Group Buying business model:
● Groupon
● Living Social
● Crowd Savings
● Peixe Urbano
● Gilt City
Hire & leasing

How the Hire & leasing business model works?
The hiring and business model sells continuous access to a
product or service, and allows customers to pay periodically
for time-limited use of the product without the customer
owning the product. The hiring and leasing company takes
care of all costs associated with ownership of the product,
such as insurance and maintenance costs.
Both Hiring and Leasing does not require the customer to

own the asset before using the asset, but they are not the
same.

Hiring means an asset can be used by a party who is required
to pay equal monthly installments, while leasing is an
agreement where a party uses an asset and pays
consideration over a specified period.
In hiring, the hirer makes an advance payment in addition to

periodical installment payments.
In leasing, the lessee pays rentals at predetermined intervals.
How the Hire & leasing business model makes money?

The hirer or lessee makes regular payments to the owner of
the asset, which is the major source of revenue for the asset
owner.
Companies that use Hire & leasing business model:
● Sixt Rent a Car
● Triton International
● United Rentals
Honor System
How the Honor System business model works?
The Honor System business model works by running a
business based on trust, honor, and honesty of its customers.
There are numerous cases of businesses, from big retail

chains to small restaurants, that allow customers to serve and
pay themselves for products or services consumed.

How the Honor System business model makes money?
The honor system makes money like any other business,
charging for its services or products. But the difference is that
by trusting and empowering customers, business can operate
with less staff thus resulting in lower operational costs.
Companies that use Honor System business model:
● Home Depot
● Swanton Berry
● Loomio
In-app purchases
How the In-app purchases business model works?
In-app purchases refer to the buying and selling of goods and
services within an application on a device.
Developers can provide their apps for free and then

advertises upgrades to paid version with more features, paid
feature unlocks, special features and items for sale, and other
apps, products, and services for sale. Users can choose to
pay for any of the features, products or services.
How the In-app purchases business model makes money?

The in-app purchase business model makes money through
the sales of virtual and physical products and services.
They also generate revenue from advertising other products,

services, and businesses.

Companies that use In-app purchases business model:
● Clash of Clans
● Candy Crush Saga
● Game of War
Intermediation
How the Intermediation business model works?
Intermediation refers to the process of connecting surplus
units (lenders with funds) to deficit units (debtors in need of
funds).
Sums of money are transferred from economic players with

surplus funds (lenders) to economic players in need of funds
(borrowers) to utilize for economic purposes.
How the Intermediation business model makes money?

The lender obtains a return on the funds, while the borrower
receives a return for taking risks on an economic venture.
The bank that made the successful match receives a return
as well.
Companies that use Intermediation business model:
● Manulife Financial Corporation
● Multiplan
● Great-West Lifeco

Japanese auction
How the Japanese auction business model works?
A Japanese auction is an auction where the opening bid price
is increased incrementally until there is only one bidder left in
the “arena” who is then declared the winner.
An initial bid price is stated, which is usually the seller’s

reserve price. The bidders then enter the auction arena. The
price continues to increase incrementally, causing bidders to
exit the arena. When only one bidder is left in the arena, the
auction ends and the bidder is declared the winner.
How the Japanese auction business model makes money?

place.
Companies that use Japanese auction business model:
● Sotheby's
● Christie's
● Phillips
Landlord Model
How the Landlord Model business model works?
A landlord business model entails an entity (landlord) who
sells the temporary use of assets to another entity (tenant).
This is very common with physical assets like houses.
The landlord sells temporary usage of the asset to the tenant.

The tenant pays a fee at agreed regular intervals.

How the Landlord Model business model makes money?
The landlord generates revenue from the regular fee paid by
the tenant.
Companies that use Landlord Model business model:
● Wells Fargo
● Prudential Insurance
● Enterprise Rent-a-Car
Lead Generation
How the Lead Generation business model works?
Lead Generation Business Model works by making contacts
(qualified leads) which may have interest into products or
services of a business.
Lead Generation business have leveraged technology and

the internet to attract web users by offering services, such as
price comparison and reviews, and turn them into sales
opportunities for other businesses.
How the Lead Generation business model makes money?

Lead Generation businesses makes money by charging a
fixed price for each lead generated. Although not usual, some
lead generation business may charge a percentage of the
sales.
Companies that use Lead Generation business model:
● Price Grabber

● Lending Tree
● Zillow
● Net Quote
● Home Advisor
● Price Watch
● Smart Prix
Lending Club
How the Lending Club business model works?
The lending club business model is a peer-to-peer community
that brings together creditworthy borrowers and savvy
investors.
Potential borrowers are screened, and then the investors

make the final decision whether to lend the money out or not.
A set of data curated by the club is used to help investors
reach a decision. Once the loan amount is approved, it
reaches the borrower’s account in about one week.
How the Lending Club business model makes money?

They generate revenue through origination fees paid by
borrowers, and service fees paid by investors.
Companies that use Lending Club business model:
● Lending Club
● Ampla

● SoFi
Licensing
How the Licensing business model works?
The Licensing Business Model works by giving permission to
use copyrighted materials under intellectual property laws
and can have several components such as term, territory and
renewal.
The licensor may grant the right of use to a licensee who can
be a final user or a business that may produce, distribute and
market products or services based on the licensed work.
This is a very common business model for software,

trademark, brand, artworks and characters, and (patented)
inventions.
How the Licensing business model makes money?

The licensing business model works by charging a fixed fee
based on the number of users or a royalty (percentage)
based on the use of the copyrighted material.
Companies that use Licensing business model:
● Microsoft
● Disney
● Calvin Klein

Litigation Crowdfunding
How the Litigation Crowdfunding business model works?
Litigation crowdfunding refers to the process of a claimant
raising funds from a third party (the crowd) to finance
relatively high-value lawsuits in exchange for payouts upon
success or settlement of the case.
A claimant seeking funds to pursue a claim creates a

campaign on a crowdfunding platform of their choice. A
group of individuals contributes to raising a fighting fund for
the claimant to cover their legal costs. If the claimant wins or
there is a successful settlement, the investors get a return on
the funds they contributed.
How the Litigation Crowdfunding business model makes

money?
The plaintiff gets awarded a claim by the law court if they win,
or if there is a settlement. The investors get returns on their
invested funds.
Companies that use Litigation Crowdfunding business

model:
● AxiaFunder
● CrowdJustice
● LexShares

Loan Sharking
How the Loan Sharking business model works?
A loan shark is an individual or company that lends money at
an interest rate that exceeds the allowed legal limit. They
operate outside the law.
Loan sharks give out quick loans to lenders, often without

much paperwork to state the terms. They lend out money
with the intention of gaining large interests in a very short
time. They often do not require background checks or credit
reports. They sometimes charge as high as 100% interest to
be paid back within a 30-day period, and use violence and
threats as a means of forcing repayment.
How the Loan Sharking business model makes money?

Their major source of revenue is from the high-interest rates
on the loans they give their customers.
Companies that use Loan Sharking business model:
● CreditHall
● LionCash
● iCredit
Long Tail
How the Long Tail business model works?
Long Tail business model works by selling many unique
products in small quantities with eventual sales of few
popular products in large quantities.

The name is given due to the characteristic curve of the
power law graphic and has gained popularity with Chris
Anderson book entitled The Long Tail released in 2004.
The whole argument of the success of long tail is that

”products that are in low demand or have low sales volume
can collectively make up a market share that rivals or
exceeds the relatively few current bestsellers and
blockbusters, but only if the store or distribution channel is
large enough.”
The model has close relation to other two business models:
marketplaces/platforms and crowdsourcing.
How the Long Tail business model makes money?

The Long Tail Business Model Makes money by selling low
quantities of many different products. As those low selling
products are usually very specific and unique, they have
higher margins.
Companies that use Long Tail business model:
● Lulu.com
● Myspace
● iTunes
Low-cost
How the Low-cost business model works?
Low cost is a business practice where businesses offer lower
their products and services at lower costs in order to attract
high demand and increase their market share.

Low-cost businesses target price-sensitive customers and
offer them lower costs than their competitors. Such
businesses often provide simplified products or services with
better asset utilization and efficient process. Their pricing
strategy is possible due to high efficiency, economies of
scale, and low-priced raw materials.
How the Low-cost business model makes money?

Low-cost businesses’ lean cost structure helps them to
realize higher margins on their products and services than
other companies. The sales of their goods and services are
their major source of revenue.
Companies that use Low-cost business model:
● Ikea
● McDonald's
● Primark
Low-cost Carrier
How the Low-cost Carrier business model works?
A Low-cost carrier is an airline that operates without offering
traditional services that are usually offered as part of the fare,
thereby offering lower fares.
Low-Cost carrier businesses typically maintain lower

operating costs than other airlines. This enables them to offer
low ticket prices to passengers. They do not provide food or
drinks during the flight instead, these are paid for by
passengers. And they offer less comfort.
How the Low-cost Carrier business model makes money?

Low-cost carrier generates revenue from the sale of ancillary

services, such as extra luggage, food, or insurance.
They also make money from the sale of their low-cost tickets.
Companies that use Low-cost Carrier business model:
● Ryanair
● Southwest Airlines
● EasyJet
Loyalty
How the Loyalty business model works?
They Loyalty Program Business model works by encouraging
customer expenditure at certain businesses in exchange for
rewards. The amount spent by customers is exchanged by
reward points (a virtual currency) which after accumulated to
a certain amount can be exchanged by goods or services.
This system is also known as ’earn and burn model’ - which

means get points for an activity (fly, buy, etc.) then redeem
those points for free stuff.
It was first conceived as a marketing strategy for businesses

(retail businesses first started it using punch card loyalty
programs) but became very popular among airline
companies. Some of those loyalty programs became so big
that they turn into independent businesses and started
offering their programs to a wide range of companies.
How the Loyalty business model makes money?

The Loyalty Program Business Model makes money by selling

their points to other institutions, usually affiliated credit card
issuers.
These partners purchase billions of dollars worth of points

each year, giving them away to incentivize consumer loyalty.
The loyalty operator effectively then buys back the points
when consumers redeem, making money by arbitraging
spoilage and inflation through restricted award availability.
Making redemptions more expensive, earnings more difficult

and issuing an expiring date to points helps this model be
more profitable - but also less interesting to customers.
Companies that use Loyalty business model:
● CadStar
● Points
● Aimia
● Nectar
● See You
● China Reward
● Lyoness
Made to order
How the Made to Order business model works?
The Made to Order Business Model works by selling products
that are only manufactured only after an order is processed.
Once the order payment is confirmed, the vendor starts to
fulfill it.

This changes not only production planning and control but
also the entire supply chain, minimizing losses. Made to
Order processes allow mass production products, but not
necessarily. Most mode to order businesses are based on the
assembly of standard components and allow limited
customisation.
Also known as built to order.
How the Made to Order business model makes money?

Made to order business model makes money by charging for
products that are produced only after payment confirmation.
This process avoids unsold inventory and large working
capital.
Companies that use Made to Order business model:
● Apple
● Dell
Mafia
How the Mafia business model works?
The Mafia refers to organized crime groups. It is sometimes
used to refer to groups without any connection to crime.
Mafia groups usually have a hierarchy, where higher-ranking

members make decisions that trickle down to other members.
It could be an alliance of groups or families that have, at
times, fought each other in bitter, bloody gang wars or at
other times cooperated in the interest of greater profits.
The head of each mafia group is known as the boss or don.

Most of the money flows to the don. The second in command
to the Don is the under-boss, who wields varying amounts of
power.
How the Mafia business model makes money?

The mafia has developed the strength to undertake ventures
other members of the polite public avoid, such as waste
management/Garbage Hauling.
They also engage in other legitimate businesses, which are

often used as a font to perpetrate money laundering.
They also make money from illegal activities like prostitution,

illegal gambling, illegal dug, etc.
Companies that use Mafia business model:
● Gambling
● Pornography
Marketplace
How the Marketplace business model works?
A marketplace is a platform that facilitates trade between
buyers and sellers.
Marketplace typically connects buyers and sellers on a

proprietary and centralized platform. Oftentimes, the
marketplace does not own any inventory. They allow a large
number of fragmented buyers and sellers to discover and
interact with one another in an efficient and transparent
manner.

How the Marketplace business model makes money?
The marketplace business model generates revenue by
charging commissions from the sellers who list their products
on the marketplace platform.
Sellers could be required to pay a fee for accessing some

premium services on the marketplace platform, like featuring
the seller at the top of the list or providing personalized
recommendations to the buyers.
Sellers may be required to pay a listing fee on some

platforms. Some marketplace also charges subscriptions to
access their platforms.
Companies that use Marketplace Business Model:
● Amazon
● eBay
● Craigslist
Mass-Customization
How the Mass-Customization business model works?
The Mass Customization Business Model works by allowing
customers to customize and buy products based on its taste
or preferences at a reasonable price and speed.
It’s a business model allowed using computer-aided robotics

systems and advanced user interface to produce custom
output.
Those systems combine the low unit costs and speed of

mass production processes with the flexibility of individual

customization.
How the Mass-Customization business model makes

money?
The mass customization business model makes money by
charging similar prices of mass production companies but
with the differentiation of a products that meet individual
customers needs. The model avoids unsold inventory which
results in greater overall profitability.
Companies that use Mass-Customization business model:
● My Customizer
Merchant Model
How the Merchant Model works?
A merchant model refers to the selling of goods and services
to customers via a virtual platform.
The merchant acts as a middleman, connecting

manufacturers to buyers through their online platform. They
are often retailers or wholesalers who buy goods in bulk from
the manufacturer, store them, and sell them to consumers
who order for them via online platforms.
How the Merchant Model makes money?

They generate most of their revenue from the margin placed
on goods sold to customers.
Companies that use Merchant Model:
● Apple iTunes
● Amazon

● Alibaba
Metering
How the Metering business model works?
Metering business model works by charging customers by
the amount of service used. The measuring units may vary
accordingly to type of service provided and can range from
hours to cubic volume. It’s a very common model between
public utilities, taxi cabs, consulting services, etc.
It’s a straightforward business model very well known in B2C

and B2B segments.
How the Metering business modelmakes money?

The Metering business model makes money by charging
more than the cost to deliver the service units.
Companies that use Metering business model:
● Uber
● Car2Go
● TXU
Micro Credit
How the Micro Credit business model works?
Microcredit is a very small loan given to poor borrowers who
typically do not have a steady source of income, collateral, or
credit history.

Microcredit is used to support impoverished borrowers to
start or sustain a small business. They typically do not include
any written agreements. As borrowers successfully pay off
their microcredits, they may become eligible for larger loan
amounts.
How the Micro Credit business model makes money?

Since they serve the poorest in society, they occasionally get
money from donors and government agencies.
They also generate revenue from interest accruing to loans

they give to customers. They render financial services which
they might charge a fee for.
Companies that use Micro Credit business model:
● Grameen Bank
● CDC Small Business Finance Corp.
● Kiva
Micro Loan
How the Micro Loan Business Model works?
Microloans are small loan amounts of money typically used to
help small businesses grow and offered a t low interest. In the
U.S., the available amount for this loan type usually goes up
to $50,000, They are one of the components of
micro-financing.
Microloans are given to people or small businesses that may

not qualify for loans in traditional institutions like banks,
though they work like traditional term lending.

A microloan provides an amount of money for the browser,
which then pays back with interest via regular payments over
an agreed period of time. Depending on the lender,
micro-loans can offer competitive interest rates or even
interest-free loans.
How the Micro Loan Business Model makes money?

They generate revenue via the interest paid on loans by their
borrowers. They also get funded through donors and
government support.
Companies that use Micro Loan Business Model:
● Grameen bank
● Accion Opportunity Fund
● USDA FSA Microloans
MICROFINANCE
How the Microfinance business model works?
The Microfinance Business Model works by providing an
alternative source of financial services, such as loans and
savings, for low-income individuals and those who do not
have access to traditional banking and related services.
There financial services usually involve small amounts of

money and can be offered through different models,
including associations, community banking, cooperatives and
peer pressure.
How the Microfinance business model makes money?

Microfinance Business Model makes money by charging their
lenders interests on loans. While these interest rates are
generally lower than those offered by normal banks,

depending on how low the loan is it might be more expensive
as some institutions may charge a fixed fee for transaction
costs.
Although focused on the poor, microfinance businesses rate

of payment default for loans is surprisingly low - more than
90% of loans are repaid.
Companies that use Microfinance business model:
● Grameen Bank
● Kiva
● BanKO
Microfranchising
How the Microfranchising business model works?
The Microfranchising Business Model works by applying the
fundamentals of traditional franchising to home-based
businesses.
Microfranchises have low startup cost and can be afforded

and run by individuals with low income or savings. It’s a very
common type of franchising in the developing world but also
between staying-at-home moms.
As at the franchising model, micro franchising has also two

players: the franchisee and the franchisor.
For the franchisee it’s a safer way to start and operate your
own business (hit the ground running) as they will be able to
open identical business of a proven brand and business
model.

For the franchisor, the model is a great growth and
distribution strategy without high investments / disbursement.
How the Microfranchising business model makes money?

Microfranchising business model makes money with a simpler
format than traditional franchising. With an affordable low
initial fee for the franchise rights (and training) and a low fixed
monthly fee. There are no variable fees based on sales.
Companies that use Microfranchising business model:
● CFW Clinics
● Nauru Energy
● Grameen Phone
● Living Goods
Monopolistic business model

How the Monopolistic business model works?
A monopolistic business model is one in which one company
exists in a market with little or no competition, and thus can
control prices and output.
A monopolistic business can change the supply and prices of

goods in order to maximize profit for itself. They often ensure
the barrier to entry is high to discourage other businesses
from trying to get into the market. Since there is only one
supplier, there are usually few or no substitutes for the goods
or services.
How the Monopolistic business model makes money?

The monopolistic business model maximizes its profits by
producing goods to the point where its marginal revenues

equal its marginal costs.
Companies that use Monopolistic business model:
● Standard Oil
● De Beers Group
● Luxottica
multi business model

How the Multi business model works?
A Multi Business Model combines and integrates various
business models and adapts them to their business to deliver
better value and experience to their customers.
Many companies are creating platforms that can be used to

serve different purposes. This often requires operating with a
Multi Business Model, which is sometimes called Business
Model Portfolio. They typically used a portfolio of business
models to create, and capture values.
How the Multi business model makes money?

Multi-business model companies typically make money
through competitive pricing and cost reduction on their
goods and services.
Companies that use Multi business model:
● Amazon: offers eCommerce, marketplace, etc.;
● Grab: offers transport, food, delivery, hotels, tickets,

insurance, financial services, etc.;
● Microsoft: offers devices, software, etc.

Multi-level Marketing
How the Multi-level Marketing business model works?
The Multi-Level Marketing Business Model works by selling
through a sales system in which sellers are compensated by
the sales they generate and by the sales of other sellers that
they recruit.
It’s a business model that leverages the power of network

effects, but it’s also seems as a scam because of its
association with pyramid schemes.
How the Multi-level Marketing business model makes

money?
The Multi-Level Marketing Business Model makes money by
selling high margin products through a salesforce that are
formed by its own sellers and their recruiting efforts and does
not represent fixed costs (only commissions are paid, no
salaries or other benefits).
Companies that use Multi-level Marketing business model:
● Amway
● Mary Kay
● Avon
● Herbalife
● Forever Living Products

Multisided or Two-sided
How the Multisided business model works?
Multi-sided business model works by offering value to two
distinct customer groups that provided each other mutual
benefits. The company that adapts such model creates value
by enabling interaction between the two customer groups.
Although this model has gained popularity with online

platforms, it has been around for quite a while and it’s a pretty
common one. Businesses that use this model include credit
cards (cardholders and merchants) and yellow pages
(advertisers and consumers/readers).
How the Multisided business model makes money?

The Multi-sided business model usually makes money by
charging a fixed or variable fee from one of the groups or
from both groups based on the sale price.
Companies that use Multisided business model:
● Google
● Airbnb
● Craigslist
● Sony PS3

Multiunit auction
How the Multiunit auction business model works?
A Multi-unit auction is an auction where multiple units of
homogeneous goods are available for sale.
In some multiunit auctions, bidders are allowed to place bids

for only one item, while in others, bidders are allowed to bid
for any quantity of their choice.
How the Multiunit auction business model makes money?

place.
Companies that use Multiunit auction business model:
● Christie’s
● Sotheby’s
● Phillips
Music Streaming
How the Music Streaming business model works?
Music streaming refers to a method of delivering audio
content to a device directly without the need to download the
files from the internet to your device.
A streaming service sends music data to a streamer’s device

in small data packets to deliver pre-buffed music to the user.
The music could be pre-buffed for a few seconds or minutes
before playing on the user’s device. The music will continue
playing as long as a steady stream of packets is delivered to

your device.
How the Music Streaming business model makes money?

Music streaming companies often require subscriptions to
access the platform or access premium features. They also
generate revenues via advertisements run on their platform.
Companies that use Music Streaming Business Model:
● Spotify
● Pandora
● Apple Music
Name Your Own Price

How the Name Your Own Price business model works?
Name Your Own Price (NYOP) is a business model where
buyers suggest a price for a product or service, and the
transaction takes place if the seller accepts the buyer’s price.
Sellers often have a price threshold over which they will

accept the bid of a buyer. The threshold price is often not
visible to the buyer. If the price offered by the buyer equals or
is greater than the threshold price, the transaction takes
place, but if it is less than the threshold price, the buyer can
update their bid.
How the Name Your Own Price business model makes

money?
Sellers generate revenue from the sales of goods and
services.

Companies that use Name Your Own Price business model:
● Garmentory
● Priceline
● Bonvoy Adventure Travel
Network Effect
How the Network Effects business model works?
The Network Effect Business Model works by offering
products or services in which the value to its customers is
directly dependent on the number of other customers already
using it. In other words, the value of the business increases
exponentially as more users adopt it.
This was first seen with the telephone industry as the more
people who owned telephones the more valuable having a
telephone became to each owner. But this was again seen in
the dot com era such social networks as businesses like
Facebook and messaging apps like WhatsApp.
How the Network Effects business model makes money?

Network Effect Business Model can make money in
numerous ways. The more common ones are subscriptions
and intermediation fees.
Companies that use Network Effects business model:
● Facebook
● WhatsApp
● Microsoft Windows

No frills model (discount or
budget model)
How the No Frills business model works?
The No Frills Business Model works by offering low cost
products or services without non-essential features. Any item
or feature that is an addition to the core-business is removed
in order to lower the price to is minimum.
it’s a very common business model in the airline industry.

Low-cost airlines offer low fares without any non-essential
services and may charge for food, airport check-in, luggage
check-in, credit card processing, date change fee, priority
boarding, more legroom and even wheelchairs use. This
strategy is also called fare unbundling.
Also called Low Cost business model (or discount business

model or budget business model).
How the No Frills business model makes money?

No Frills companies makes money by charging additional
fees to non- essential services or products and creating
additional sources of revenue such as advertising space, duty
free shopping, travel insurance, train tickets, etc.
Companies that use No Frills business model:
● Pure Talk
● Ryanair
● Food Basic

● Tata Motors
Omni Channel
How the Omni Channel business model works?
Omnichannel is an approach in which a company provides
their customers access to their goods, services, and support
on all channels like mobile devices or desktops, via
telephone, or in a brick-and-mortar store
Omnichannel ensures a seamless customer experience

irrespective of the channel via which they choose to use the
business. An example is a customer receiving an SMS
message about a sales promotion while shopping in-store.
The Omnichannel model comes down to the degree of the
integration between the channels and platforms being used
by the business.
How the Omni Channel business model makes money?

The Omnichannel model ensures that businesses meet
customer demands and expectations, and customers find it
easier to make a purchase if they can seamlessly access a
company’s goods and services via all channels. This
increases sales and revenue for the business.
Companies that use Omni Channel Business Model:
● Disney
● Virgin Atlantic
● Bank of America

On Demand Workforce Business
Model
How the On Demand Workforce Business Model works?
The on-demand workforce model is a model wherein workers
are hired on-demand when needed. Such workers could be
freelancers, contractors, etc.
Companies simply hire from a pool of available workers with

the requisite skills to handle the job that needs to be done.
The business spends less on permanent employees and still
meets demand by quickly contracting qualified workers when
demand rises.
How the On Demand Workforce Business Model makes

money?
The on-demand worker gets paid for the work they do, while
the business saves cost on staffing as they only pay per task
completed.
Companies that use On Demand Workforce Business

Model:
● Upshift
● Amazon Mechanical Turk
● 99designs

One Deal a Day
How the One Deal a Day business model works?
One deal a day model is a model in which a product is
offered for sale at a discount for a period of 24 hours.
When a company offers a product at a discounted price on

the One deal a day model, that product is only available at
that price for only a 24-hour period. Typically, the discounted
products are changed daily.
How the One Deal a Day business model makes money?

The source of revenue is majorly from product and service
sales.
One deal a day businesses also offer a special listing service

on their site where goods and services are placed in a
prominent position on their site to catch customers' attention
quickly. They charge a listing fee for this.
Other businesses may advertise on one deal a day platform

for which they pay advert fees.
Companies that use One Deal a Day business model:
● Woot
● Whiskey Militia
● 1 Sale A Day

online business models
(e-business model)
How the Online business models works?
The online business model refers to businesses conducted
via the internet to become profitable.
There are numerous types of online businesses, and they

work in different ways. They entail the sale of information
products, physical products, or services. Typically, customers
place an order for a product or service of their choice, and
the online business delivers it to them via the customer’s
preferred channel.
How the Online business models makes money?

Online businesses generate revenues through the sales of
products and services. They also raise money through other
means, like commissions and subscriptions.
Companies that use Online business model:
● Amazon
● Alibaba
● eBay

online marketplace business
model
How the Online marketplace business model works?
An online marketplace business is an internet-based market
platform that connects buyers and sellers.
An online marketplace acts as an online middleman to

facilitate trade between buyers and sellers through their
online platform. Buyers are able to get a great number of
product options to purchase, while sellers have a variety of
customers to sell to.
How the Online marketplace business model makes

money?
Online marketplace charge sellers commission on products
sold on the platform. They also generate revenues for adverts
placed on the marketplace, Product listing fees, Sign-up fees,
and subscriptions.
Companies that use Online marketplace business model:
● Amazon
● Alibaba
● eBay

Online2Offline Commerce
How the Online2Offline business model works?
O2O companies use the online world to find and bring
customers to offline (real-world) companies. It works by
attracting online users by offering values such as deals,
reservations, recommendations, etc. and turning those online
users in real world sales leads (foot traffic) or customers to
merchants.
This is the case for group buying companies such as Groupon

and lead generation companies such as Open Table.
Differently from web directories, O2O companies close the
loop by offering quantification of performance and close loop
with payments or reservations.
Just like e-commerce websites that sell online products which

gets shipped by mail to your door, O2O commerce helps you
buy online experiences, which cannot be delivered by mail,
but can be delivered by local merchants.
O2O is all about discovery, payment, and performance

measurement to offline commerce.
How the Online2Offline business model makes money?

The O2O business model makes money by charging a
commission fee who can be a fixed price or a variable one
based on the sale.
Companies that use Online2Offline business model:
● Groupon
● Open Table

● Spa Finder
● Booking
Open
How the Open business model works?
Open Business Models works by generating their value offer
entirely from external contributors such as partners and
customers sharing risks and rewards.
The idea is similar to the open innovation concept in which

companies can benefit from the worldwide distributed
knowledge without expending high amounts on salaries,
reducing fixed costs and risks.
The open business models can be a business in itself or be

adopted by companies which have strong R&D investments.
How the Open business model makes money?

The open business model makes money charging a monthly
fee and/or a percentage of the royalties from the sales of the
innovative products or services created.
Companies that use Open business model:
● Qualcomm
● Genzyme
● Procter & Gamble q Innocentive
● Patients Like Me

Open Innovation
How the Open Innovation business model works?
Open innovation is the method of promoting collaboration
with talents and organizations outside a company.
The model refers to the collaborative networking and sharing

of knowledge and information about problems and looking
for outside talent to share solutions and suggestions.
It often takes the shape of partnerships and collaborations
with drawn-out terms and conditions.
However, this model does not imply free access to a

company's knowledge and technology.
How the Open Innovation business model makes money?

The open innovation model helps companies to create new
revenue streams without compromising their core business.
Businesses also profit from the wealth of ideas borne out of

open innovation, which could result in higher production
efficiencies.
Companies that use Open Innovation business model:
● Ford, United Auto Workers, 3M, and GE Healthcare

have combined forces to build ventilators using F-150
seat fans, 3D printed parts, and portable battery packs;
● The Samsung Accelerator program;
● Delphi and Mobileye working on autonomous driving

systems

Open-Source
How the Open-Source business model works?
The open source business model works by offering a product
license for free with optional paid professional services,
maintenance and support to the same free open source
products.
As open source products are offered through universal

access via a free license to the product's design or blueprint,
there’s no revenue from license sales. This is also known as
Professional Open Source.
A good example is WordPress, an open source platform that

can be downloaded and used for free through wordpress.org
website. But if you want to host your WordPress blog or install
premium plugins you can do it a wordpress.com for a monthly
fee.
How the Open-Source business model makes money?

The Open Source Business model makes money by offering
paid professional services, maintenance and support to open
source products.
Companies that use Open-Source business model:
● WordPress.com
● Open Stack
● Mozilla

OTT
How the OTT business model works?
OTT (Over The Top) refers to the delivery of television, film
and other media content through the internet rather than
through a traditional cable/broadcast provider.
OTT delivers media content through internet connection with

varying degrees of bandwidth and reliability. OTT systems are
designed to minimize the impact of these varying parameters.
The system adapts itself to deliver real time content without
the usual pauses from the buffering process.
How the OTT business model makes money?

OTT businesses make money through subscription fees paid
by customers to access their platform. They also generate
revenues through adverts on their platform.
Companies that use OTT business model:
● Netflix
● Amazon Prime Video
● Hulu
Outsource Model
How the Outsource business model works?
The Outsourcing Business Model works by offering
outsourced services to other businesses. Services are usually
business processes that are not part of the core business of
their customers.

Outsourcing can help firms mitigate shortage of skill or
expertise in areas where are not specialized. This way firms
can focus and perform better in their core competencies.
Outsourcing is also a way of reducing fixed costs. Because

relationship with outsourcing companies work on contractual
agreement, it offers greater budget flexibility and control as it
allows organizations pay for only the services they need,
when they need them.
The advance of internet-based services created a whole new

spectrum of outsourcing companies (called digital
outsourcing), allowing businesses run virtually from
anywhere.
How the Outsource business model makes money?

The outsourcing business model works by charging monthly
or hourly fees. Some may also charge some kind of
performance-based reward.
Companies that use Outsource business model:
● Capgemini q ISS
● Sodexo
● IBM
● Accenture

P2P
How the P2P business model works?
The P2P business model works by allowing individuals to
connect directly to one another and exchange products and
services.
Businesses offer a matchmaking system which can be an

automatic (algorithm based) or a manual search (and
directory) system in which customers can find, hire and
purchase what they are looking for.
P2P is a very broad term which was popularized by the file

sharing system Napster, originally released in 1999. The
peer-to-peer movement allowed millions of Internet users to
connect "directly, forming groups and collaborating to
become user-created search engines, virtual
supercomputers, and filesystems.
It has originated a great number of different businesses

models out there with different names such as platforms or
marketplaces. Although a p2p network is designed around
the notion of equal peer nodes who simultaneously function
as both "clients" and "servers" to the other nodes on the
network. In the business world seller and customers are
different groups and do not need to simultaneously function
with both wholes.
The term has also been distorted from as P2P business

model usually work with an intermediary promoting
connection, controlling quality and charging for it.
How the P2P business model makes money?

The P2P business model works by charging a
commission-based fee based on the amount of the sale.

Some business may also charge for listing services or
products, or advertisement display.
Companies that use P2P business model:
● Drivy
● Lyft
● Zopa
● Match
Pawn SHOP
How the Pawn Shop business model works?
The Pawn Shop Model works by offering loans to people,
secured with items of personal property (e.g. jewelry,
electronics, collectibles, etc.) used as collateral, which then
becomes a secured debt owed to the pawn shop.
The pawn shop analyses the personal property offered as

collateral to valuate marketability, flaws, damages and
originality. The pawnshop owner either turns down
hard-to-sell items or offers a low price. The customer can
either sell the item outright if (as in most cases) the
pawnbroker is also a licensed second-hand dealer or offer
the item as collateral on a loan.
If an item is pawned for a loan within a certain contractual

period, the pawner may redeem it for the amount of the loan
plus some agreed-upon amount for interest. The amount of
time, and rate of interest, is governed by law or by the
pawnbroker's policies. If the loan is not paid (or extended, if
applicable) within the time period, the pawned item will be
offered for sale by the pawnbroker.

How the Pawn Shop business model makes money?
The Pawn Shop makes money with interest rates or reselling
items for a higher price.
Companies that use Pawn Shop business model:
● Borro
● Gold and Silver Pawn Shop
● Family Pawn
● Benny’s Pawn
● Welsh Pawn
● A-ok Center
Pay per click

How the Pay per Click business model works?
The Pay-per-click Business Model works by offering direct
traffic to websites in exchange of a pre-defined amount (or
bid) for each advertisement clicked.
It’s definitely the most famous internet advertisement

business model nowadays, used by the biggest search
engine players (Google, Microsoft, Yahoo, etc.) and the
biggest affiliate (Rakuten, ClickBank, Share a Sale, etc.).
How the Pay per Click business model makes money?

There are two ways of making money: flat-rate PPC where
advertisers and publishers agree upon a fixed price for each
click and bid-based PPC where advertisers compete for clicks
determining the maximum amount paid for an ad spot (and

consequently click) and the maximum expenditure for the
same of clicks in a day or month.
Companies that use Pay per Click business model:
● Google Adwords
● Microsoft Bing
● Rakuten
● ClickBank
● Share a Sale
Pay per performance (Pay per

result)
How the Pay per performance business model works?
The Pay-Per-Performance Business Model works by charging
its customers based on performance delivered that can be
objectively measured.
Very common in the online advertisement and affiliate

marketing industry, the performance- based business model
can have many different forms depending the unit of measure
chosen. The common point between them all is that
advertisers and publishers share the risk of a visitor that does
not convert.
The most famous model is the pay-per-click (PPC) which can

have a flat-rate or bid-based pricing. But there are many other
forms, such as:

● pay-per-lead
● pay-per-call
● pay-per-install
● pay-per-impression
● pay-per-conversion
● pay-per-acquisition
● pay-per-sale
How the Pay per performance business model makes

money?
Pay-per-performance has many ways of making money, but
the most common are percentage or commission, flat-rate or
bid-based.
Companies that use Pay per performance business model:
● Google AdWords
● Fahrenheit212
● Priorité Comunicação
● PBSRG
Pay-what-you-want (PWYW)
How the Pay-what-you-want business model works?
The Pay What You Want Business Model Works by allowing
customers pay what they want for the goods or services
provided. The model does not depend on deciding the price
and give full freedom to customer pay what they feel the
product or service is worth to them.
Some businesses may set a minimum (floor) price or suggest

a pricing as a guidance to the customer.
Also known as Pay What You Can (PWYC).
How the Pay-what-you-want business model makes

money?
In order to pay what you want business model make money
customers need to pay more than the cost to deliver the
product or service. There are numerous cases in the internet
proving that this is much more common than people think
and if you are afraid you may set up a minimum price
accepted.
Companies that use Pay-what-you-want business model:
● RadioHead
● IndieVox
● OpenBooks
● Panera Bread
● Zest Business Consulting
Pay-as-you-go model (PAYG)

How the Pay-as-you-go model business model works?
The Pay as You Go Business Model works by offering
services that are charged on its metered usage. Customers
pay a pre-defined price based on what they consume.
Also know as metering, this business model is used from taxi

cabs to website hosting services.

How the Pay-as-you-go model business model makes
money?
The pay as you go business model makes money by charging
more than the cost to deliver the service units.
Companies that use Pay-as-you-go model business model:
● Psonar
● Amazon AWS
● ZiferBlat
● Car2Go
Pay-per-use model (PPU)

How the PPU business model works?
This is the same of pay as you go (or metered) business
model.
The Pay-Per-Use business model works by charging the

customer based on the service usage. It’s the model used by
municipal water service.
How the PPU business model makes money?

In the pay-per-use model, the owner of the product or service
lie with the company itself, and the customer pays a fee for
usage on demand.
Companies that use PPU business model:
● Amazon Web Services

● Electric Utilities like Con Edison
● Heidelberger Druckmaschinen AG
● Kaeser Kompressoren
● Qure.ai
● Sigtuple
● Stasis Monitors
● Zebra Medical Imaging
● Philips PACS
● Microsoft Azure
Payment Gateway (or Payment

Intermediaries)
How the Payment Gateway business model works?
The Payment Gateway Business Model works as an
intermediary between online merchants and banks to
process customers payments.
Payment gateways are the equivalent of a physical point of

sale terminal located in most retail outlets. They encrypt
credit card sensitive information using SSL technology and
guarantee safe transactions for both customers and
merchants.
How the Payment Gateway business model makes money?

Payment Gateway Business Model works by charging a fixed

fee and/or a variable fee for each transaction. For example,
Gumroad charges 25c + 5% for each transaction processed.
Companies that use Payment Gateway business model:
● PayPal
● Authorize.net
● Stripe
● PayU
● Zaakpay
● Gumroad
Paywall
How the Paywall business model works?
The Paywall business model is usually adopted by big
newspapers websites and works by blocking unlimited
access to its webpage (news and articles) without a paid
subscription.
It’s a model that has risen as a solution for the news and
magazines industry that has been suffering downsides from
printed sales and hard times trying to create revenue from
online advertisement.
The Paywall also usually gets defined as metered paywall

because it usually allows a limited number of free articles
access per month. This kind of ’soft paywall’ is somehow a
kind of freemium.
How the Paywall business model makes money?

The Paywall business model makes money by charging a
subscription fee to have unlimited access to online content.
Companies that use Paywall business model:
● Time
● Financial Times
● Wall Street Journal
● New York Times
Peace of Mind Model

How the Peace of Mind business model works?
The Peace of Mind Business Model works by offering
products and services that help improve the level of safety of
its customers.
How the Peace of Mind business model makes money?

The peace of mind makes money by charging premium prices
for products and services.
Companies that use Peace of Mind business model:
● Lojack
● Honest
● Geico

peer to peer lending
How the Peer to Peer model works?
Peer to Peer lending (P2P) is the model wherein individuals
obtain loans directly from individuals through a platform that
matches lenders with borrowers.
Traditional middlemen like financial institutions are cut off

from this transaction. A borrower fills out a loan application
stating information like loan amount and purpose of the loan.
A lender/investor opens an account on the platform and
makes a deposit that would be available for loan
disbursement. The platform assesses the borrower’s
application and assigns a risk category which is used to draw
up terms and agreements like interest rates. Multiple
investors may make an offer to the borrower. The borrower
can choose an investor or decide to accept multiple offers.
The borrower gets funded and repayments are made as

stated in the terms and agreement. All of these processes are
handled via the P2P platform.
How the Peer to Peer model makes money?

Borrowers are able to obtain loans from alternative platforms
to traditional lenders.
Investors on the Peer-to-Peer platforms earn between 2% and

6% interest on their money.
Some P2P platforms charge upfront fees for loan processing

from borrowers.
P2P platforms also generate revenue by adding a small

margin into the loan plus interest repayments from the
borrowers.

The P2P platform may also charge investors a percentage fee
on the interest they receive.
Companies that use the P2P business model:
● Prosper Personal Loans
● Funding Circle
● LendingClub
Penetration Pricing
How the Penetration Pricing model works?
Penetration pricing is a model businesses use to quickly
attract customers to a new product or service by offering
lower prices, and below-average prices during their initial
offer. After this initial offer, prices rise back to the normal rate.
The lower prices help the business to enter the market by

enticing customers to try the new product or service and gain
market share with the hope of retaining the new customers
after the price returns to normal. They simply prioritize market
share over profits for a given time period.
How the Penetration Pricing model makes money?

The penetration pricing model’s offering of low price drives
up sales for the business within the period of the offering.
This model can lead to an increase in the volume of sales,

thereby increasing revenue.
Suppliers of a business utilizing penetration pricing may offer

bulk discounts if the sales volume is high enough, thereby

cutting costs for the business.
Companies that use Penetration Pricing model:
● Costco used a penetration pricing model on organic

foods to increase its market shares;
● Fastlane Communications LLC incorporates a new

high-speed internet service to its cable television
offering for the price of one during the first year after
customers sign up;
● Starbucks introduces new and seasonal coffees and

drinks at lower prices in order to encourage
consumers to try them. Once the market accepts them,
they revert to the normal price.
Penny Auction (Bidding Fee

Auction or All-Pay Auction)
How the Penny Auction business model works?
The Penny Auction Business Model works by offering
auctions in which all participants must pay a non-refundable
fee to place each small incremental bid. The auction ends
after a period of time, typically ten to twenty seconds, without
new bids; the last participant to have placed a bid wins the
item and also pays the final bid price, which may be
significantly lower than the retail price of the item.
Also know as Bidding Fee Auction or All-Pay Auction, Penny

Auction sites are usually bad seem by the market because of
many frauds involving this business model.

How the Penny Auction business model makes money?
The Penny Auction Business Model makes money in two
ways: the fees for each bid and the payment for the winning
bid, totalling typically significantly more than the value of the
item.
Companies that use Penny Auction business model:
● Orange Bidz
● Mad Bid
● Happy Bid Day
● Quibids
Performance-based
advertising
How the Performance-based advertising model works?
Performance-based marketing is results-based marketing
where businesses pay based on the results of their ad
campaigns instead of a fixed price. The results of their ad
campaigns include ad views, sales, demo downloads, app
installation, etc.
Advertisers conduct research to determine which channels

and tools will produce the best results at the best price for
the client's business. Advertisers then put their ads on the
channel and pay based on how the ad performs. They can
pay in one of the following ways:
● Cost Per Mile (CPM): The price paid per thousand

views or impressions;
● Cost Per Click (CPC): Amount paid based on the
number of ad clicks;
● Cost Per Sales (CPS): The amount paid when an advert
directly generates a sale;
● Cost Per Leads (CPL): Amount paid whenever a
customer signs up for something or drops their contact
info as a direct result of their advert;
● Cost Per Acquisition (CPA): The amount an advertiser
pays when consumers complete a specific action, e.g.,
a sale or sharing their contact information.
How the Performance-based advertising model makes

money?
Performance-based advertising increase sales by informing
potential buyers about your goods and services.
This model helps businesses to create a public image or

distinctive brand that they desire, which might appeal to their
target customers and increase sales.
It could prompt specific action in customers, such as visiting

the business store, or their online platform to make a
purchase.
Companies that use Performance-based advertising model:
● AdQuantum
● JumpFly
● Ignite Visibility

Pipe
How the Pipe business model works?
The Pipe Business Model work by creating, selling and
delivering products or services to customers. Value is
produced upstream and consumed downstream. There is a
linear flow, much like water flowing through a pipe.
The concept was created by Sangeet Choudary as a way to

describe the difference between traditional old business
models in comparison with platform business models.
How the Pipe business model makes money?

The Pipe Business Model charging for its sales.
You calculate all the costs of running a unit through a pipe all
the way to the end consumer and you ensure that Price =
Cost + Desired Margin.
Companies that use Pipe business model:
● Nestlé
● Coca-cola
Platform (Intermediation or
marketplaces)
How the Platform business model works?
The Platform Business Model Works by connecting buyers
and sellers and enabling them to transact between each

other. By allowing users to create and consume value the
model becomes extremely scalable and able to benefit from
network effects.
The model may also be called Intermediation or Marketplace.
How the Platform business model makes money?

Platform Business model makes money by charging a
commission (or percentage) When producers and consumers
transact. One or both sides may pay the platform.
When producers create content to engage consumers

(YouTube), the platform may monetize consumer attention
(through advertising). In some cases, platforms may license
API usage.
Platform economics isn’t quite as straightforward either. At

least one side is usually subsidized to participate on the
platform. Producers may even be incentivized to participate.
Companies that use Plataform business model:
● eBay
● Airbnb
● YouTube
Pop up Stores
How the Pop-Up Stores business model works?
The Pop-Up Store Business Model works by opening
temporary, usually short-term, sales spaces instead of having
a permanent location (although it can coexist with permanent
stores too).

Pop-up Stores as usually small and use a shipping container
as structure. Their appearance and placement in high foot
traffic sites can build up interest by consumer exposure.
Pop-up retail allows freedom and flexibility to create unique
environments with innovative customer experiences,
generating a feeling of relevance and interactivity.
They are often used to launch new collections or sell

seasonal items such as Halloween costumes and
decorations, Christmas gifts and Christmas trees, or fireworks.
There are also different benefits to popups such as

marketing, testing products, testing locations or markets, and
as a low-cost way to start a business.
This model has been gaining a lot of new attention with the
rise of Food Trucks.
How the Pop-Up Stores business model makes money?

The Pop-Up Store makes money just like any other retail
business with the benefit of not having need of high upfront
investments and fixed costs such as leasing and renting for
retail spaces.
Companies that use Pop-Up Stores business model:
● King & Mcgaw
● Baracuta
● Reis
● eBay

Post Paid Model
How the Post-Paid Model works?
The postpaid model refers to the payment method where
customers pay for goods and services only after they have
been rendered, and they are charged based on their actual
usage.
Some businesses using the post-paid model offer their

customers the opportunity to pay for goods and services after
each billing cycle, which could be a month. Some may
request payment after agreed milestones have been
reached.
How the Post-Paid Model makes money?

The post-paid model offers more convenience, which could
attract more customers and then increase sales for the
business.
Since customers are charged only for the actual usage of the
service, they rest assured of being served and are more
willing to make use of it in the future. This helps the business
to retain customers and drive more sales.
Companies that use the Post Paid Model:

● AT&T offers postpaid plans;
● Uber accepts payment after the passenger has been
delivered to their destination.

PPP
How the PPP Model works?
The PPP (public-private partnership) model is a collaboration
between the government (through any of its agencies) and a
private sector organization to fund, build and operate public
infrastructures.
PPP can be used to build infrastructures like the public

transportation system, and power plants. It often involves
concessions of tax, and part ownership rights for a limited
time for the private sector. The PPP model is helpful for large
projects that need a highly skilled workforce and huge
financial backing to get started.
How the PPP Model makes money?

The PPP Model helps the government to raise sufficient
finance to meet public infrastructure needs.
All of the workers involved in the construction of the project

get paid wages for their services.
The private sector involved in the PPP project may reach an

agreement with the government to operate the public
infrastructure for a limited time to recoup their investments in
the project.
Companies that use PPP Model:
● Delhi Metro Rail Corporation and Reliance Energy Ltd

constructed the Mumbai Metro;
● Seattle and Gigabit Squared built high-speed fiber

cable connections for all residents;

● St. Louis County and Gateway Arch Park Foundation
gave a facelift to the Jefferson National Expansion
Memorial, better known as the Gateway Arch.
Premium
How the Premium business model works?
The Premium Business Model works by offering high end
products and services to brand image and quality sensitive
consumers.
The business model uses premium pricing in order to

encourage favourable perception and higher profit margin in
a lower sales volume.
How the Premium business model makes money?

The premium business model makes money by charging very
high prices in order to have higher profit margins in a low
sales volume.
Companies that use Premium business model:
● Apple
● Beats
● Mercedes-Benz
● Burberry

Prepaid Model
How the Prepaid business model works?
The prepaid business model works by selling credit in
advance of customers expenditure. The customer can use
services or buy products up to the amount purchased in
advance. Once the credit is over a new amount of credit can
be purchased in order to keep using services or buy more
products.
This model has been widely used by mobile phone carriers,

but some businesses have adopted them, such as credit
cards issuers, or turned them into independent businesses,
such as gift card companies.
How the Prepaid business model makes money?

Because prepaid credit usually means less spending or
reduced opportunity to profit from interest rates, in the
prepaid business model companies charge a deposit fee or a
higher cost per use. For example, the minute in a mobile
phone carrier is more expensive in the prepaid model than in
the postpaid model.
Companies that use Prepaid business model:
● MasterCard
● Gift Cards

Price Discrimination
How the Price Discrimination Model works?
The price discrimination model refers to the practice of
offering different customers different prices for the same
product or service. It is based on a business belief that
certain categories of customers can be asked to pay more or
less depending on demographics, economic status, usage,
etc.
The business may identify these market segments as

domestic or industrial or educational users, high net-worth
customers or middle-income customers, etc.
For this model to work, consumer groups must demonstrate

varying elasticities of demand, e.g., inelastic submarkets (e.g.,
corporate consumers) pay a higher price, while the relatively
elastic submarkets (e.g., students) pay a lower price.
How the price Discrimination Model makes money?

Different consumer markets exhibit different characteristics
and different price points that they are willing to pay. The
price discrimination model helps businesses to capture
maximum value (revenue) from the different consumer
markets.
The model aims to charge consumers the maximum price

they are willing to pay for a good or service. This results in
increased income for the company.
Companies that use the Price Discrimination Model:
● Microsoft offers the MS Office Schools edition at lower

prices than other editions;

● Cineplex charges different prices on their tickets on
different days;
● Amazon Prime offers a discounted membership to

low-income seniors.
Price Skimming
How the Price Skimming Model works?
The price skimming model refers to a business charging the
highest initial price that the market accepts, and then
gradually lowering the price over time to attract more
price-sensitive customers.
This model aims to “skim” off the top market segment at the
point of introducing a new product with the intent to generate
the maximum profit in the shortest time possible, instead of
generating maximum sales. When a company introduces a
product for the first time, it is offered at an initial high price
such that it is the customers with the strongest desire and
capacity to pay that will purchase it. As the demand of those
customers plummets, then the price is lowered to the next
layer of the customer segment with the strong desire and
capacity to pay.
How the Price Skimming Model makes money?

Companies using the price skimming model will potentially
see higher returns on their products or services due to the
initial high price.
Early adopters provide free organic word-of-mouth

advertisements for the company, which might further boost
sales.

Companies that use the Price Skimming Model:
● Apple
● Salesforce
● Sony
Private Club model

How the Private Club business model works?
The Private Club Business Works by offering access to a set
of products, services and infrastructure exclusive to approved
members which pays a monthly fee.
Anyone interested in becoming a member of a private club is

subjected to be approved by a board of members who may
judge if the person is suited to the club profile.
If approved the person needs to buy a club membership from

an exiting member and than start to pay a monthly fee to
have full access to club infrastructure.
Clubs may also operate in the semi-private and public

models. In the semi- private model clubs sell to both
members and outsider who wants to buy a daily pass. In the
public model anyone can purchase daily or season passes.
The public model is usually government owned.
How the Private Club business model makes money?

The Private Club Business Model makes money by charging a
monthly fee and by selling products and services to its
members, such as food and beverages. Some clubs may also
charge for daily or seasonal passes if they are semi-private or

public clubs.
Companies that use Private Club business model:
● The Yellowstone Club
● Palm Beach Bath and Tennis Club
● Algonquin Golf Club
● The Jonathan Club
● The Knickerbocker Club
● The Bohemian Club
● The China Entrepreneur Club
Private Label
How the Private Label business model works?
The Private Label Business Model works by offering products
to be branded by a particular reseller, usually a big chain of
retail stores which uses their own brand to sell products with
higher margins.
Typical discount stores and supermarkets carry a mix of

national brands and private label merchandise. National
brands are products made by popular manufacturers and
distributed in various retail outlets under the manufacturer's
brand name. Private label brands are made by the reseller or
acquired with exclusive resale rights. Companies like Target,
with its MarketPantry brand, and Walmart, with its Equate
brand, have various private label goods.
What’s the difference from private label to white label? Both

terms are used to describe products or services branded by a
particular reseller for sale. A private label brand means that a
product is produced for exclusive sale by a particular retailer
(it’s basically a relationship of industry & retail). A white label
brand means a generic product or service is created by a
manufacturer and distributed to multiple providers for
rebranding (it’s basically a strategy of affiliate marketing but
with a branding reinforcement).
How the Private Label business model makes money?

Private Label Business Model Makes Money by selling high
volume of products at wholesale price to retail stores big
enough to enjoy its own brand power. Private Label
companies don’t need to invest in branding or publicity as its
just prints the reseller desired brand in its products.
Companies that use Private Label business model:
● Homel Foods
● Cott Corporation
● Richelieu Foods
● McBride
Private Shopping Club

How the Private Shopping Club business model works?
The Private Shopping Club Business Model works by creating
a member only club where its members can buy products at
high discounts.
This model has become popular offering high fashion / luxury

goods at online platforms (offering designer fashion up to
80% cheaper), but there are many other cases operating at

categories such as travel and electronics and other segments
like bargain basement.
Some clubs charge a membership fee and some don’t,

private users have to be invited by another member or get in
a waiting list in order to have access to discounted products.
Many retail stores may have their own private shopping clubs
where members have certain offer/price advantages by
paying an annual fee.
How the Private Shopping Club business model makes

money?
Private Shopping Club businesses make money by offering
unsold inventory from brands at a huge discount. Private
Shopping Clubs run the sale and collect cash immediately on
purchase. Based on Sales, they purchase only what was sold,
nearly eliminating their inventory risk.
Companies that use Private Shopping Club business model:
● Gilt Groupe
● Jet Setter
● Amazon Buy VIP
● Kings Lane
● Best Secret
Product Bundling
How the Product Bundling business model works?
The Product Bundling Business Model works by offering
grouped products or services together in order to create a

new price point.
By grouping products or services together retail companies

increase average price and profit. In some cases, such as
electronic sales the bundle of products (low margin) and
extended warranty (high margin) is a way to survive selling
commodities. Another example is the case of McDonald’s
where value meals are combined sandwiches (priced with
low margin) with fries and sodas (priced with high margin) to
incentive higher average sales.
What used to be a simple business strategy is now a business

model that is a necessity for many retailers in order to
improve sales and profit margins. We could say that this is a
model in between wholesale and regular retail.
This model is different from the add-on model.
How the Product Bundling business model makes money?

The Product Bundling Business Model makes money by
combining products and services of low margin with high
margin ones.
Companies that use Product Bundling business model:
● Microsoft
● McDonald’s
● BestBuy

Product Service System Model
How the Product Service System business model works?
Also known as a function-oriented business model or
’servicing’ the Product-Service-Systems Business Model
works by offering a mix of both products and services
capable of jointly fulfilling a user's needs. In a more extreme
format businesses sell the function of the product instead of
the product itself.
The initial move to PSS was largely motivated by the need on

the part of traditionally oriented manufacturing firms to cope
with changing market forces and the recognition that services
in combination with products could provide higher profits
than products alone. Faced with shrinking markets and
increased commoditization of their products, these firms saw
service provision as a new path towards profits and growth.
A good example is IBM which started to sell servers by the

hour (managed hosting service) instead of selling units of
server computers.
Other famous examples include:
● Xerox' pay-per-copy model for selling office equipment

● Rolls-Royce's Power-by-the-Hour service package for
aircraft engines, whereby maintenance, repair and
overhaul services are charged per hour of flight
● Atlas Copco's Contract Air service, whereby air
compressors are sold per m3 of compressed air
delivered
● Philips' pay-per-lux model for selling lighting
equipment, whereby customers pay for a promised

level of illuminance in a building
● Michelin's fleet management solution whereby truck
tires are sold per kilometer driven
How the Product Service System business model makes

money?
The PPS Business Model makes money by charging for
service units instead of product units. This service unit may
be, for example, hours in which a series of products and
services are bundled to offer higher value to customers and
higher profitability to businesses.
Companies that use Product Service System business

model:
● IBM
● Xerox
● Rolls-Royce
● Philips
● Michelin
Product Subscription
How the Product Subscription business model works?
The Product Subscription Business Model works by delivering

products with pre-defined quantity and regularity in exchange
of a monthly or annual fee.
The model was pioneered by magazines and newspapers but

is now used by many businesses to deliver different products.

One of the most famous cases is the company Black Socks
which delivers black socks to busy men who wears suits
regularly but don’t have time to buy new black socks. You can
choose your subscription based on the number of socks and
periodicity you want to receive them.
How the Product Subscription business model makes

money?
The Product Subscription Business Model works by charging
a monthly fee to its customers based on the quantity and
periodicity of the desired product. Because businesses deal
with a better forecast of sales based on the subscribers (a
predictable and constant revenue stream) they can better
plan purchase and negotiate better prices with suppliers.
Companies that use Product Subscription business model:
● Black Socks
● Shoedazle
● Svbscription
● Dollar Shave Club
Productized Service
How the Productized Service business model works?
The Productized Service Business Model works by offering a
predetermined package of services with fixed price, scope
and deadline instead of an Ad Hoc service charged by the
hour.
The productized service can go from medium service level

(more flexible and customizable) to almost no service level
(closer to the product concept).
Productized services do not mean necessarily inflexibility but

brings more scalability as you reduce risks with repeatable
processes.
How the Produticzed Service business model makes

money?
The productized service business model generate revenue
by selling services just like a product.
The service has a fixed price, well defined scope, and a buy
button to purchase it without the need to get in touch with a
salesperson, just like a product in a supermarket.
Example:
● One-time Facebook Ads audit account for $199

● Website design for $1300
● 1000 words articles for $50
Companies that use Produtized Service business model:
● Legalzoom
● WP Curve
● Fiverr
● Place It
● Brand Bucket
● Rocking Book Covers

Proof of Payment
How the Proof of Payment Model works?
Proof of Payment is a payment tool used as proof of the
occurrence of a transaction between two or more parties,
typically a buyer and a seller.
When a customer makes a payment for a purchase, proof of

payment is issued at the end of the transaction. A receipt is
commonly used as proof of payment.
How the Proof of Payment Model makes money?

In accounting reports, a transaction might be deemed invalid
if there is no proof of payment. Hence, proof of payment
helps companies to save unnecessary costs on their
transaction.
During a financial audit, proof of payment raises the financial

status of a company, and this might be useful when the
business tries to raise capital from investors.
Companies that use the Proof of Payment Model:
● All businesses are expected to issue proof of payment

at the end of every transaction. Examples of such
proof of payment include receipts and Cash notes.
Pyramid Scheme
How the Pyramid Scheme business model works?
The Pyramid Scheme Business Model works by exchange
money primarily for enrolling other people in the scheme

rather than supplying any real product or service. It’s an
unsustainable variation of the multi-level marketing business
model and considered illegal.
Because its main source of money is from the payment made

from each new member the scheme falls apart once
recruiting becomes no longer possible leaving most of its
members with a loss.
How the Pyramid Scheme business model makes money?

The Pyramid Scheme Business Model makes money by
taking a percentage from each new joining fee sold by its
members.
Companies that use Pyramid Scheme business model:
● Solavei
● Usana
● Nuskin
● Many Investment Clubs
Razor and Blades Business

Model
How the Razor and Blades Business Model works?
Also known as Bait and Hook, the Razor and Blade business
model works by selling a product at a loss or very low margin
(sometimes free) to enable selling volumes of another related
higher margin product or service.
The related product or service is usually a functional part of

the main products which means that without it the main

product does not work.
The model got famous by Gillette who sold razors at low

margins but razorblades at high margins. HP printer division
used it wisely too by selling printers with low margins but
printer toners or cartridges with higher margins. Cellphone
carriers do it well too giving cellphones for free with service
contract of higher margin per minute calls. The most success
case is Nespresso, selling machines with low margins and
coffee capsules with very high margin.
How the Razor and Blades Business Model makes money?

The Razor Blade business model makes money from the sale
of related products and services with higher margin profits.
Companies that use Razor and Blades Business Model:
● Nespresso
● Gillette
● HP Printers
● AT&T Cellphones
● Sony PlayStation 3
Rent Subscription
How the Rent Subscription business model works?
The Rent Subscription Business Model works by allowing you
to rent a limited number of products for a monthly fee. It's a
flexible ownership model where you can subscribe and keep
products for as long as you want. Once you decide to switch
the rent product for a different one, you send it back to the

company and they will send you the next thing in your queue.
Some people may think that this model includes services

such as Spotify and kindle unlimited. But I do prefer to define
them as ’All You Can Eat’ Business Model, which deals with
digital products and have no physical limitations.
How the Rent Subscription business model makes money?

The Rent Subscription Model makes money in two ways: by
selling subscriptions that in the long run are more profitable
than the cost of product acquisition, repair and replacement
summed. And by selling the product itself. Many people do
like so much the rent product that decided to have the full
ownership of it.
Companies that use Rent Subscription business model:
● Rent the Runway
● The Ms. Collection
● Pley
● RocksBox
● Spark Box Toys
● Gwynnie Bee
● Le Tote
Rent to Own
How the Rent-to-Own Model works?
Rent to own is an agreement that allows a tenant to rent a
property (usually a home) and also gives them the option to

buy it before the lease expires. It typically consists of a
standard lease agreement and a purchase option.
The lease agreement spells out the terms of the lease of the
property like the amount to be paid, and the payment cycle.
The purchase option gives the tenant the right to buy the
property at the end of the lease, and it stipulates the terms
like property price, upfront fees, etc.
How the Rent-to-Own Model makes money?

Rent-to-own agreements could provide a tenant a path to
homeownership, which is an asset for the tenant.
The seller collects a monthly rent on the property and in

some cases may collect above-market rent monthly, which
increases the seller’s income.
The seller will get paid the agreed price for the property at
the point of purchase.
Companies that use the Rent to Own Model:
● Divvy Homes
● Empire East
● iRentToOwn.com

Rental Business Model
(Renting)
How the Rental business model works?
The Rental Business Model works by offering temporary use
of something owned by someone else.
Usually, there are two situations in which the rental

businesses make sense:
1. When you need to use something for a very short

period, so it does not make sense to own it.
2. When something is to expensive to buy, so instead of
buying it your rent for longer periods.
How the Rental business model makes money?

The Rental Business Model works by charging an hourly, daily
or monthly fee that represents a percentage of the total cost
of ownership.
Companies that use Rental business model:
● Hertz
Retailer Cooperative
How the Retailer Cooperative Model works?
Retailer Cooperative is a model in which small independent
retailers and businesses pool their resources to purchase in
bulk from manufacturers and share marketing costs so as to
maximize profits.

Locally owned stores, pharmacies, and hardware stores are
commonly found to belong to retailers’ cooperatives. To
achieve their goals of lower cost and increased profits,
retailers’ cooperatives often establish a central buying
organization through which they make bulk purchases. They
also carry out group advertising and promotion.
How the Retailer Cooperative Model makes money?

The Retailers’ cooperative improves buying conditions for its
members, thereby increasing sales profits.
Their joint marketing and promotion often drive down

individual marketing costs and may attract new customers,
resulting in increased sales for members.
Companies that use the Retailer Cooperative Model:
● Ace Hardware
● Mitre 10
● Federated Co-operatives
Revenue Share
How the Revenue Share Model works?
The revenue Share Model is a model wherein companies
distribute the total amount of revenue generated from their
business between partners/stakeholders in accordance with
a legal agreement.
The revenue-sharing model can be implemented in

businesses and in government. Typically, all the stakeholders
join forces to create an expanded value, and they get to

share the captured value (revenue) amongst themselves.
Each stakeholder gets compensated for their effort in the
business alliance.
How the Revenue Share Model makes money?

All the stakeholders get a share of the revenue generated by
the business alliance based on a legal agreement.
Since they join forces to create value, it cuts down their

individual cost, hence they experience improved profits.
Companies that use the Revenue Share Model:
● National Football League (NFL)
● United States Government
Revenue-Based Financing
How the Revenue-Based Financing Model works?
Revenue-Based Financing also called royalty-based financing
is a method companies use to raise capital from an investor,
and the investor receives a percentage of the company’s
ongoing revenue in exchange for the invested money.
The investors continue to receive a regular share of the

business’ income until the payment reaches an agreed
amount. The payments made to the investor depend on how
well the business is doing. If the business income is high, the
investor will receive increased payment and vice versa.
Furthermore, the investor does not have direct ownership in
the business.
How the Revenue-Based Financing Model makes money?

Revenue-based loans generate high returns for the lenders,

especially when the loan is structured in the right way for the
right companies.
The loan that a borrower receives helps the business to grow

and record increased revenue.
The repayment structure of a Revenue-Based Financing

Model helps the business to grow more sustainably, which is
healthy for consistent revenue generation.
Companies that use the Revenue-Based Financing Model:
● Pipe
● Capchase
● Clearco
Reverse auction
How the Reverse auction Model works?
A reverse auction is a model consisting of multiple sellers and
one buyer, in which the sellers bid for the price at which they
are willing to sell their goods and services to the buyer.
This model reverses the roles of buyers and sellers. The

buyer puts up a request for a product or service, then multiple
sellers place bids for the amount they are willing to accept for
offering the buyer the product or service. In the end, the
seller with the lowest amount wins.
How the "business model name" makes money?

The lower purchase cost helps the buyer to save money.
The seller makes money from the sale of the merchandise.

The buyer gains savings from the competitive pricing at the
auction.
The auctioneers receive a commission for services rendered.
Companies that use the Reverse auction Model:
● Government contracts
● ProcurePort
Reverse Factoring
How the Reverse Factoring Model works?
Reverse factoring is a three-way financing solution involving a
buyer, seller, and financial institution whereby the supplier’s
invoice is financed by the financial institution (typically a bank)
on behalf of the buyer, while the buyer gets more time to pay
the invoice.
The buyer reaches an agreement with the bank to make

prompt payment to its suppliers, while the buyer pays the
bank (with interest) on the due date.
How the Reverse Factoring Model makes money?

The supplier receives early payment for their supplies, which
is good for their growth.
The supplier also enjoys diversified sources of capital, as

reverse factoring provides suppliers with an off-balance-sheet
way to maintain growth.
The buyer benefits from longer payment terms, which

improve their liquidity and cash flow.

The banks get paid by the buyer, with interest on the money
paid to the supplier on behalf of the buyer.
Companies that use the Reverse Factoring Model:
● Mitsubishi HC Capital UK PLC
● PrimeRevenue, Inc.
● Trade Finance Global
Reverse Logistics
How the Reverse Logistics Model works?
Reverse logistics is a model that moves goods from
consumers back to the sellers or manufacturers through the
supply chain.
Reverse logistics often involve the return of defective

products by customers, trade-in of old products for new ones,
etc. It includes the physical management of the returned
products and the decision by the manufacturer to either
refurbish or dispose of them properly.
How the Reverse Logistics Model makes money?

Businesses could resell, reuse or recycle returned products,
which helps them to increase revenue.
Reverse logistics lead to greater customer satisfaction, which

means that customers are likely to remain with the brand for a
longer time and keep making purchases from the company.
Businesses using the Reverse Logistics Model can reduce

their carbon footprint by recycling returned products. This
creates intangible value for them and may attract customers

who are passionate about fighting climate change.
Companies that use the Reverse Logistics Model:
● H&M
● Apple
● UPS
Ride Matching
How the Ride Matching Model works?
Ride matching is the pairing of one or more riders to get to
their destination by sharing a single vehicle that is going in
their direction.
Ride matching lets riders share a route - pooling people on

the same route together. The vehicle may make multiple
stops along the route to drop off passengers and pick up new
ones. It entails the participation of riders (peer customers) and
drivers (peer providers). The peer provider initiates the
process on a ride-matching platform, then through the
platform, peer customers may be matched to the driver.
How the Ride Matching Model makes money?

The driver (peer provider) gets paid for the service being
rendered to the peer customers.
The peer customers enjoy transportation convenience and

save costs through this model.
The ride-matching platform earns a commission from each

ride.

Companies that use the Ride Matching Model:
● Via
S2P
How the S2P Model works?
S2P (Source-to-Pay) is an end-to-end process of procurement
that spans sourcing for suppliers, negotiating with them, and
hiring them for their products and services. S2P includes
vendor management, performance management, and
purchasing.
A company first identifies relevant suppliers. These suppliers

are then evaluated before the preferred ones are contracted.
The business places orders, monitor the supply of the
products, and then authorizes and releases payment. The
S2P model is typically deployed through the implementation
of an S2P software platform.
How the S2P Model makes money?

S2P platforms charge a subscription fee for suppliers to use
their platforms.
The S2P Model also generates revenue through paid

advertisements hosted on its platform.
Companies that use the S2P Model:
● SAP Ariba
● Coupa BSM Platform

● Ivalua Strategic Sourcing
SaaS
How the SaaS Model works?
SaaS (Software as a service) is a method that allows users to
access cloud-based applications over the internet instead of
installing and maintaining them.
Customers can rent the use of an app and then connect to it

over the internet. The SaaS provider manages all the
underlying infrastructure, app data, middleware, hardware,
and software, and ensures the availability of the app at all
times to the customer.
How the SaaS Model makes money?

SaaS companies charge subscription fees for their products
and services.
Some SaaS companies allow customers to pay based on

usage, which is the amount of software they are utilizing.
Companies that use the SaaS Model:
● Microsoft
● Shopify
● Slack

Sampling Subscriptions
How the Sampling Subscriptions Model works?
The Sampling Subscriptions Model involves consumers trying
out free samples of products from various brands without the
obligation of paying for them.
This model allows manufacturers to offer targeted consumers

an experience of the products which they would probably not
make any effort to get to know or use.
How the Sampling Subscriptions Model makes money?

The Sampling Subscriptions Model often give consumers the
opportunity to try a product for a limited time, and the option
to purchase what they like for a reasonable price.
This model may result in satisfied customers, who then

become a steady and predictable revenue stream for the
business.
Companies that use the Sampling Subscriptions Model:
● Rocksbox
● Birchbox
● Bergamot
Scan Based Trading Model

How the Scan-Based Trading Model works?
The scan-Based trading model is a process whereby

suppliers retain ownership of the inventory inside the
retailer’s stores until the items are scanned at the register and
sold.
When products get scanned at the point of sale, the retailer

collects the point of sale data and sends it to the supplier.
The supplier then creates an invoice based on the data. This
means that the supplier only gets paid whenever an item is
scanned at the register.
How the Scan-Based Trading Model makes money?

The sale of the products is a major source of revenue for both
the retailer and the supplier.
The point of sale data provided to the supplier provides

consumers insights, hence, suppliers can use the data to
optimally design promotions and pricing strategies for
increased sales.
Scan-Based Trading helps retailers to cut costs because they

can better plan for staffing and storage needs.
Suppliers can introduce new products to the retailer’s store at

no extra cost, which improves the prospects of generating
more profits for both parties.
Companies that use the Scan Based Trading Model:
● Ira green
● Source Interlink
● Eurpac

Search Agent Model
How the Search Agent Model works?
A search agent is one who represents the interest of the
buyer during the process of purchase or lease of a property,
usually a house.
They are different from estate agents being that estate

agents represent the interest of the seller, i.e., the owner of
the property. A search agent acts solely on behalf of the
buyers/tenants. A search agent searches for an appropriate
property for the buyer and helps to secure and negotiate
terms on behalf of the buyer. They manage the transaction
through the exchange and guide the buyer on related matters
with respect to the property.
How the Search Agent Model makes money?

The Search Agent charges a retaining fee when the property
search starts.
The Search Agent also charges a success fee, which is often

a percentage of the final purchase price of the property.
Companies that use the Search Agent Model:

● Garrington
● Prime Portfolio Ltd.
● Haringtons UK Ltd.

Second Hand Business Model
How the Second Hand Business Model works?
Second-hand products are products that have been

previously used by another buyer. Second-hand goods are
often purchased for a fraction of the retail price.
The basic motivation for second-hand shopping is based on

economic reasons and the green choice of consumers. The
difference in price between used products and new products
often drives demand for the second-hand model.
Some consumers also buy second-hand goods for emotional

reasons, in a bid to own historic items or items with stories of
a personal effect on them.
How the Second Hand Business Model makes money?

Second-Hand Business generates income from
advertisements on their platforms.
They also generate income from the sales of their goods.
Second-hand business platforms charge a fee for a featured

listing, which is a premium feature for putting listed items in
the spotlight to draw more attention to it.
Companies that use the Second Hand Business Model:
● Letgo
● Modacruz
● Vestiaire Collective

● Greendust
Self Service
How the Self-Service Model works?
The self-service model refers to the practice where
customers are able to access resources themselves in order
to find solutions on their own without the assistance of a
company’s employee.
Self-service includes customers picking their own groceries,

making their own payments at checkout, and finding answers
on an online help center to their questions. Instead of waiting
in line for a customer service agent, which takes time,
customers simply serve themselves.
How the Self-Service Model makes money?

If customers can not find quick answers to their questions,
they are likely to abandon the shopping experience.
Self-service puts the power in their hands, hence increasing
customer satisfaction and sales.
Self-service lowers costs by helping businesses serve a large

number of customers with small teams.
Staff who ought to be attending to customers' queries are put

to other more productive use, thereby saving the business
cost and increasing their value.
Companies that use the Self Service Business Model:
● Amazon

● Apple
● Spotify
Service Subscription
How the Service Subscription Model works?
A service subscription model offers to sell goods or services
to customers and the customers pay a recurring fee on a set
timeline, such as monthly or weekly.
In order to access a product or service, customers are

charged on a recurring basis, and they are free to choose
how long and how often they want to receive each offer. The
customer will continue to receive the offer as long as they
complete their recurring payments. They are also free to
cancel at any time.
How the Service Subscription Model makes money?

Service subscription generates revenue by charging
customers a recurring fee for continued access to their goods
and services.
Customers find subscriptions more affordable than a tag price

on a product. Hence, more customers are attracted by
affordability, which will lead to increased sales.
Service subscriptions help businesses lock in customers who

already trust their brand. This ensures long-term sales.
Companies that use the Service Subscription Business

Model:

● Butcher Box
● Hulu
● HelloFresh
Servicizing
How the Servicizing Model works?
Servicizing refers to a model where businesses shift their
focus from selling products to selling the functions of the
product or selling the service component of the product.
It is based on the conviction that customers actually want the

function of the product itself and not actual ownership of the
product. So if businesses are able to sell the "servicizing
solutions", then they get paid based on the unit of service
delivered instead of the traditional unit of products sold.
How the Servicizing Model makes money?

Servicizing companies generate revenue when their
customers make payments to them based on the
product-service package sold to them.
The servicizing model does not see the material products as

ends in themselves, instead, companies aim to help
customers to achieve their consumption goals with fewer
products. This implies cost reduction and increased profits for
the company.
Companies that use the Servicizing Business Model:
● Xerox's pay-per-copy model for selling office

equipment;
● Atlas Copco's Contract Air service model sells air

compressors per m3 of compressed air delivered;
● Rolls-Royce's power-by-the-hour service package for

aircraft engines is charged per hour of flight for
maintenance, repair, and overhaul services.
Set it and Forget it Model

How the Set it and Forget it Model works?
The set it and forget it model is about customers having so
much trust in a company that they can just forget it.
A customer's regular purchase pattern allows the retailer to

correctly predict when the customer will need a particular
item. Hence, the retailer may arrange to have the item
delivered to the customer's doorstep at those regular times.
Once the system is set up, then you can forget it.
How the Set it and Forget it Model makes money?

The convenience that affords customers means that the
business can retain the customer, which guarantees regular
sales to that customer.
The Set it and Forget it Model helps businesses to automate

revenue generation from their customers.
Set it and Forget it Model means more sales from customers

with minimal employee engagement, which saves costs for
the business.

Companies that use the Set it and Forget it Model:
● Amazon Dash Button
● Fixed deposit
● Health insurance
Shared business models

How the Shared business model works?
Shared business is a model that involves consumers in the
creation, use, and distribution of goods and services via
digital platforms, online communities, or apps.
Such assets can be rotated, reused, and shared between

different individuals and businesses. This model typically
involves a medium where people connect with one another
to share services or goods, or buyers and sellers transact
business.
How the Shared business model makes money?

The prices of goods and services in a shared business model
are usually more affordable, hence, it saves costs for
consumers.
It generates extra income for providers (sellers) of the goods

and services.
The platform typically charges a commission on transactions

carried out on its platform.
This model offers buyers access to things that might not be

practical to own or obtain, thereby saving them costs, e.g.,

ride-sharing.
Companies that use the Shared business model:
● WeWork: Co-Working Spaces
● Uber: Ride-Sharing and Car-Sharing
● Airbnb: Apartment/House Renting and Couchsurfing
Shared Ownership
How the Shared Ownership model works?
The Shared Ownership model is one in which a business
distributes shares to its stakeholders, especially employees.
The owners have shared responsibilities and obligations to

the business. The Shared Ownership model can be
considered for a variety of assets like businesses and
properties.
How the Shared Ownership model makes money?

The stakeholders in shared ownership get paid dividends on
their percentage ownership of the business.
Capital appreciation is also another means by which owners

of s shared businesses make money.
Companies that use the shared Ownership model:
● John Lewis
● Publix Super Markets
● Brookshire Brothers

Shareware
How the Shareware model works?
The shareware model is the provision of commercial software
for free during a certain time period, after which the user is
expected to pay for continued access or to access the
full-featured version.
At the expiration of the free trial period, the software usually
deactivates itself and denies the user any further access until
payment is made. The aim of this model s for users to try the
software before they buy it.
How the Shareware model makes money?

Much shareware generates revenue through advertisements.
Users, especially corporate users, pay a license fee to

continue using the software after the trial period.
Companies that use the Shareware model:
● WinZip
● Adobe Photoshop
● GetRight
Showrooming
How the Showrooming model works?
Showrooming refers to the practice of consumers visiting a
brick-and-mortar store to view and check a product, before
purchasing it online for a lower price.

This is common for higher-priced products which consumers
like to see, touch, hear, or smell so as to be sure of their
features before making the actual purchase. Showrooming
allows consumers to make purchases at the best available
price to them.
How the Showrooming model makes money?

It helps consumers save costs by buying the lowest-priced
offering on the spot.
The showrooming model leads to higher retail profits

because it results in a higher benefit of retail service to the
manufacturer.
Small retailers are able to save costs because showrooming

removes the need for an exquisite display of products, thus
requiring less space for their stores.
Companies that use the Showrooming model:
● Allbirds
● Bonobos
● Glossier
Simplified Model
How the Simplified Model works?
The Simplified Model involves the removal of complex and
unnecessary steps and tasks to improve the efficiency of
production processes in businesses.

This can be achieved by making processes simpler,
transforming an existing complex process, limiting the
number of designs or features on products produced, or the
usage of modern technology in the business process.
How the Simplified Model makes money?

The Simplified Model often leads to increased efficiency like
a reduction in paperwork, this saves the business cost on
staffing needs.
It also leads to increased productivity, which means better

products and increased profits.
With simplified processes, businesses are able to increase

production speed, thus, producing and making delivery on
time to customers which often results in customer satisfaction
and retention of more sales.
Companies that use the Simplified Model:
● TSG
● Cflow
● MicroD
Sliding Scale Fees

How the Sliding Scale Fees Model works?
Sliding scale fees are fees paid for goods and services based
on a customer’s income and capacity to pay.
Such fees are varied to a lower scale, i.e., reduced for those
who earn lower incomes, while those who earn higher

incomes will pay more. It is used by organizations to ensure
everyone has access to their offerings.
How the Sliding Scale Fees Model makes money?

Businesses that use the sliding scale fees model still get paid
for their goods and services, though on a varying scale based
on the income of their customers.
The sliding scale fees may endear customers to a company,

which means customer retention and increased sales from
new ones.
Companies that use the Sliding Scale Fees Model:
● People Incorporated Mental Health Services
● Fidelity International
● Canadian Unitarian Council
Social Commerce
How the Social Commerce Model works?
The social commerce model entails the buying and selling of
goods and services directly through social media platforms.
Businesses may choose to display their offerings with

information on features, availability, and pricing on social
media platforms like Instagram, WhatsApp, Facebook, etc.
Some platforms may even allow businesses to create a social
shop with a fully developed business setup where buyers
complete the process of payment and checkout without ever
leaving the platform.

How the Social Commerce Model makes money?
Social Commerce Model provides a convenient and
frictionless buying experience, which could lead to increased
sales for the business.
Social Commerce Model generates social proof for

businesses, which attracts even more customers and more
sales.
The social media platform generates revenue through

adverts.
Companies that use the social Commerce Model:
● Old Navy's Instagram shop
● Storrow Jewelry’s
● Skullcandy
● Burrow
Social Cooperative
How the Social Cooperative Model works?
Social Cooperative is a model wherein the public interest is
the main purpose.
It is most developed in Italy. Businesses utilizing the Social

Cooperative Model produce goods and services in the public
interest first. They are typically democratically owned by a
combination of employees, beneficiaries, and investors. They
often provide social services like care for the disadvantaged.

How the Social Cooperative Model makes money?
The social cooperative produces goods that they sell to
generate revenue for the continued sustenance of the
cooperative.
When such businesses carry out public campaigns for a

cause they care about, they often generate money from
sponsors and donors who care about that cause.
Companies that use the social Cooperative Model:
● Un Fiore per la vita
● Il Germoglio cooperative
● Al di là dei sogni Cooperative
Sponsorship
How the Sponsorship Model works?
The sponsorship business model is the practice where a
company monetizes its products and services through
sponsors instead of setting prices for its customers.
The sponsor commits money and other resources to the

business, event, or program in exchange for promotional
interests. Such promotional interests include getting their
names and logo on merchandise like wearables, T-Shirts,
banners, brochures, posters, and other marketing
merchandise.
How the Sponsorship Model makes money?

Businesses using the Sponsorship Model generate revenue

through funding received from sponsors.
Businesses also benefit from in-kind sponsorships, such as

donations of physical items or services from sponsors.
The sponsors enjoy increased brand awareness and visibility,

a form of advertisement that could lead to increased sales.
Sponsors could also rack up sales at the events they sponsor
through product exhibitions.
Companies that use the Sponsorship Model:
● The International Olympic Committee (IOC)
● Federation Internationale de Football Association

(FIFA)
● The National Basketball Association (NBA)
Store-in-Store
How the Store-in-Store Model works?
A store-in-store model refers to the practice where a retailer
rents out part of its space allowing other brands to operate
independently and exercise autonomy over retail decisions,
such as pricing, and in-store service, and develop their own
marketing campaigns.
Typically, the host retailer rents out a part of their floor plan to
other brands and vendors in exchange for rent or a
percentage of sales.
How the Store-in-Store Model makes money?

The foot traffic generated by the host retailer could lead to

increased sales for the vendor stores.
The store-in-store model helps brands save money by cutting

overhead costs to run an independent store on their own.
The host retailer generates revenue through rent or

percentage profit paid by vendor stores.
Companies that use the Store-in-Store Model:
● Bloomingdale’s has stores in store for brands, such as

Ralph Lauren, Kenneth Cole, Calvin Klein, etc.;
● JCPenney store in store for Sephora;
● Best Buy hosts Samsung Experience;
● Macy's hosts Starbucks coffees in various of its store

locations.
Subscription
How the Subscription Model works?
The subscription model involves customers paying a
recurring fee for continuous access to a product or service.
The customer pays for the product or service for a length of

time, and the business fulfills its obligation by granting the
customer access to its products and services for as long as
the customer continues to make their recurring payment. The
customer can cancel or renew the contract at any time.
How the Subscription Model makes money?

The business cages customers a recurring monthly or annual

fee for continuous access to their products and services.
Some businesses charge a one-time access fee to access

their platform before subsequent subscription payments.
Companies that use the Subscription Model:
● Netflix
● Microsoft
● Spotify
Supply Chain
How the Supply Chain Model works?
A supply chain is a network between an organization and its

suppliers following a sequence of activities through which a
commodity moves from the source to the market.
It comprises the entire stages to produce and market a

product like the supply of materials, distribution, and sale.
How the Supply Chain Model makes money?

An exceptional supply chain can lead to increased sales and
business profitability for the company.
All the players within the supply get paid for their offerings.
Companies that use the Supply Chain Model:
● C.H. Robinson Worldwide
● UPS Supply Chain Solutions

● Kuehne + Nagel Americas
Surprise Box Model

How the Surprise Box Model works?
The surprise box business model involves curating a package
of goods from a particular niche or variety of niches for
subscribers on a regular basis.
Usually, the customers do not know the content of the box

because it is meant to deliver an element of surprise which
delights them as much as the goods inside. It is typically
delivered on a monthly basis.
How the Surprise Box Model makes money?

Businesses using the surprise box model generate revenue
by charging a recurring fee that is paid regularly, usually
monthly.
Some businesses charge a one-time fee in addition to

subscription fees.
Companies that use the Surprise Box Model:
● Stitch Fix
● Wonderful Objects
● 420 Goody Box

Swapping
How the Swapping Model works?
The Swapping model refers to the exchange of goods and
services with other goods and services of comparable value.
Businesses and individuals use this model to find assets of

interest to them in exchange for what they have to offer to
their swap partners. This can be done on swap platforms
which facilitates the meeting and transactions.
How the Swapping Model makes money?

The swap platforms charge a commission on the value of the
transaction.
The swap partners often save costs by exchanging what they

have for what they need.
Companies that use the Swapping Model:
● Swapz
● Swapitshop
● Swapcycle
Swapping for products

How the Swapping for products Model works?
Swapping for products is a model where products are
exchanged for other products of comparable value.

Businesses can reach an agreement to exchange assets,
production, etc to reduce overall costs. Individuals can also
swap for products on items they no longer need with one
they need that is of comparable value. This can be done on a
dedicated swap platform.
How the Swapping for products Model makes money?

The swapping for product platforms generates revenue
through the shipping of products to the different parties
(swap partners) engaged in the swapping.
The parties in the Swapping for products save cost by

exchanging what they do not need anymore for what they
need.
The swapping platform also takes a percentage of the

transaction value.
Companies that use the swapping for products Model:
● Gumtree Swap Shop
● Craigslist
● u-exchange
Swapping for services

How the Swapping for services Model works?
The Swapping for services Model involves the exchange of
services for another service of a comparable value.
Instead of money being used as a medium of exchange, a

service is used to procure another service of approximate

value. The Swapping for services Model takes services as
salable acts, such as Plumbing, Moving assistance, and Tax
preparation. Just like products, Swapping for service is
subject to the forces of demand and supply.
How the Swapping for services Model makes money?

The swapping platform receives a fee on each transaction.
The swap partners saves cost on the services exchanged.
Companies that use the Swapping for services Model:
● Simbi
● TradeMade
● U-Exchange
Syndication
How the Syndication Model works?
The syndicate model refers to an alliance of independent
businesses working together to achieve a common business
objective.
The syndication model makes it easy for businesses to

combine resources and share risks in order to achieve what
would be difficult for them to achieve individually. Typically,
their primary purpose is to promote goods and services and
increase profits for all the entities involved.
How the Syndication Model makes money?

The Syndication Model enables businesses to focus on their

core strength while having other entities handle the
remaining parts of the business, thus, saving them costs.
Some entities within a syndicate make money through

up-front licensing fees.
Some businesses using the syndication model also generate

revenue by receiving a share of advertising revenue on other
sites that run its content.
Entities also receive a percentage share of transaction

revenues.
Companies that use the Syndication Model:
● FedEx distributing its sophisticated package-tracking

capability;
● Motley Fool provides stock-market commentary in

various formats to sites, such as Yahoo!, and the San
Jose Mercury News' SiliconValley.com;
● Amazon is syndicating its store to other locations.
The Ad Unit Model

How the Ad Unit Model works?
An ad unit model refers to a placeholder for an ad that is
integrated into other apps and is displayed to users in order
to monetize their traffic.
Each ad unit looks and behaves differently, and some offer a

wide range of mobile ad formats. Examples of ad units
include banner ads, playable ads, and interstitial ads.

How the Ad Unit Model makes money
The ad unit gets paid per click. Advertisers pay the ad
network for their services.
Companies that use the Ad Unit Model:
● Google AdSense
● Amazon Affiliates
● Bing for Partners
Three-tiered
How the Three-tiered Model works?
The three-tiered model entails a business offering their
customers three different pricing choices for the same
product or service, which has different individual options.
This model is typically applied to fixed, project-based, or

value-based offerings but does not work well on hourly rate
offerings. The business presents customers with three
different levels of offering instead of one comprising tier 1 —
base offering —, tier 2 — which has more value than the first
—, and then, tier 3 — with the most options.
How the Three-tiered Model makes money?

This model helps businesses to attract more customers with
multiple offerings, thus capturing more sales.
This model affords businesses choice and flexibility, thus

increasing sales opportunities.

Companies that use the Three-tiered Model:
● HubSpot, which uses three tiers effectively
● Microsoft 365
● Xbox Game Pass
Time-Based Pricing
How the Time-Based Pricing Model works?
The time-Based Pricing Model is a method of pricing goods
and services based on the time the customer makes the
purchase.
Some businesses using this model may charge more during

peak hours or during particular seasons to encourage
customer traffic.
How the Time-Based Pricing Model makes money?

The time-Based Pricing Model makes money by helping
businesses to take advantage of high customer turnover
during peak periods, thereby increasing sales and profits.
Businesses using the Time-Based Pricing Model like airlines

are able to lock in sales well ahead of time because
customers tend to make purchases at the best times.
Companies that use the Time Based Pricing Model:
● British Airways offer higher prices for flight tickets

during summer and lower prices during other periods
of the year;
● Uber changes its price offers based on weather

conditions;
● Airbnb changes its price based on holidays, events,

and special days.
Timeshare
How the Timeshare Model works?
The Timeshare Model enables multiple owners to own and
use a property at different times of the year, typically for a
1-week interval each year.
Each owner purchases a certain time period of the year in a

particular property. The buyers own allotments of usage in
one-week increments. This is usually applicable to vacation
homes but can be used for campsites, hotel rooms, and other
stand-alone properties.
How the Timeshare Model makes money?

Timeshare owners can rent out their allotted time and make
money.
Timeshare companies make money through the purchase

made by timeshare owners.
Timeshare companies also charge maintenance fees for the

property.
A timeshare offers owners the ability to own a fraction of the

property during their time allotment.
Companies that use the Timeshare Model:
● Wyndham Destinations

● Marriott Vacation Club
● Disney Vacation Club
Tip jar/donation
How the Tip jar/donation Model works?
The Tip jar/donation is a discretionary payment determined
and paid by customers to employees of an organization for
good service.
This model is very common in the hospitality industry. Tip

jar/donation includes payments like cash tips, non-cash tips
like tickets, gift cards, etc. Many organizations using this
model typically implement tip pooling, where all the tips are
collected together, and all employees receive a percentage
from the total pool collected.
How the Tip jar/donation Model makes money?

The Tip jar/donation Model makes money from the voluntary
payments made by customers.
Since these tips/donations are made in appreciation of good

service, it motivates staff to even offer better service, thereby
increasing sales for their organization and getting even more
tips/donations.
Companies that use the Tip jar/donation Model:

● Spotify implements a tip jar/donation for musicians on
its platform;

● Twitter has an in-app tipping feature for entertainment
content;
● Patreon.
Tripwire
How the Tripwire Model works?
A tripwire is a low-cost introductory offer designed to turn a
prospect or cold traffic into paying customers.
The trip wire model lowers customers’ resistance and barrier

to entry, as it involves low risk and a lower level of
commitment. Trip wires offers are usually priced between
$5.00 to $30.00. Its goals are to increase the customer base
by quickly turning prospects and cold traffic into customers,
and identify quality leads who are likely to spend more on the
company’s goods and services.
How the Tripwire Model makes money?

The Tripwire Model makes rapid sales with the low-cost
introductory offer, which is typically very affordable.
Businesses are able to build trust with customers through the

trip wire model, thus recording more sales from customers.
The Tripwire Model builds up the customer base of a

company, which often translates to more sales.
A trip wire sale could be high value but often incomplete,

hence, customers often have to make additional purchases to
complement it.

Companies that use the Tripwire Model:
● Name.com offers First-Year Discount and Then Regular

Pricing
● Ryan Levesque offers Free Plus Shipping Tripwire

Offer
● DotcomSecrets offers Free Shipping plus Order Bump
Usage Fee (metered service)

How the Usage Fee (metered service) Model works?
Usage Fee (metered service) is a model in which consumers
only pay for the number of goods or services they use.
Typically, the customer has access to numerous goods and

services from the company, but they are only billed by the
company for what they use.
How the Usage Fee (metered service) Model makes

money?
The Usage Fee (metered service) Model empowers
customers to only use what they can afford, which is often an
attraction for more customers, resulting in more sales.
The Usage Fee (metered service) Model provides insights on

customer usage, which can be used by businesses to
implement targeted marketing to increase revenue.

Companies that use the Usage Fee (metered service)
Model:
● Amazon Web Services (AWS)
● Digital Ocean
● WordStream
Value-added reseller
How the Value-added reseller Model works?
The Value-added reseller (VAR) Model refers to the practice
of a company or individual who purchases a product from a
company and then resells them after adding value to the
product.
A value-added reseller (VAR) buys products from suppliers or

original equipment manufacturers, adds features or services
to the product, and then resells them to end-users at higher
prices.
How the Value-added reseller Model makes money?

The supplier or original equipment manufacturer gets paid for
their products.
The Value-added reseller resells the value-added product at

a higher price to make a profit.
Many Value-added resellers often offer after-sales services

like repairs and maintenance. This increases customer
satisfaction and helps both the VAR and suppliers to retain
customers and sales.

Companies that use the Value-added reseller Model:
● Ingram Micro
● Elite Group
● Router-Switch.com
Vickrey auction
How the Vickrey auction Model works?
The Vickrey auction is a type of sealed-bid auction where
participants submit their bids but do not know the bids of
others, with the second-highest bid winning the auction.
Participants in a Vickrey auction bid their true value, which is

the maximum amount they are willing to pay for the product.
The second-price mechanism further incentivizes participants
to bid their maximum because if they win, they only get to
pay the second-highest bid price.
How the Vickrey auction Model makes money?

The winner of the Vickery auction saves some money since
they do not have to pay the price of their own maximum price
but the second higher price.
The seller gets paid the maximum value for the product.
The auctioneer takes a percentage commission from the

transaction cost.
Companies that use the Vickrey auction Model:
● eBay

● Google Ads
Virtual business model

How the Virtual business model works?
The Virtual business model works by conducting all or most
of its business activities via the internet.
Though virtual — businesses are characterized by their online

activities —, they all maintain varying degrees of physical
operation.
How the Virtual business model makes money?

The Virtual business model earns money through the sales of
its own products and services.
The Virtual business model also generates revenue from its

platform by charging a commission on the sale of products
and services from other vendors.
They also make money through advertisements placed on

their platform.
Companies that use the Virtual business model:
● Amazon Inc.
● Zappos
● Netflix

Walrasian auction
How the Walrasian auction model works?
The Walrasian auction model is a concurrent auction where
demand for the good at every possible price is calculated and
submitted to the Walrasian auctioneer, who then sets the
price such that the total demand across all submitted
demands equals the total amount of the good.
The Walrasian auctioneer matches supply and demand in a

market of perfect competition. The Walrasian auctioneer
gathers prices about orders and determines the final price.
How the Walrasian auction model makes money?

The seller makes money from the sale of their goods.
The buyer may gain savings from the pricing at the auction.
The auctioneers receive a commission for services rendered.
Companies that use the Walrasian auction model:
● New York Stock Exchange (NYSE)
Warehouse Club Model

How the Warehouse Club Model works?
The Warehouse Club Model offers low-priced goods and
services to members who pay an annual membership fee.
The Warehouse Club sells membership to consumers. The

large membership base allows them to purchase items from

suppliers in bulk at low cost and then offer them to members
at low prices.
How the Warehouse Club Model makes money?

The Warehouse Club Model generates revenue through
annual dues paid by members.
There is typically a small markup on the prices of goods sold

to members, which are used to cover costs and operating
expenses.
The bulk purchase of goods at discounted prices help them

to save cost.
Companies that use the Warehouse Club Model:

● Costco's membership
● Sam’s Club
● BJ’s
White Label
How the White Label Model works?
The White Label Model is when a manufacturer of a product
uses the logo and brands of the buyer instead of its own.
The end product then appears as though it was produced by

the buyer. The manufacturer simply produces the products
and designs the package with the brands of the buyer. The
buyer in turn markets and sells the products as their own.

How the White Label Model makes money?
The White Label Model helps the manufacturer to generate
more sales.
The manufacturer also saves costs by not having to market its

products itself. Instead, the buyer does the marketing under
their own brand name.
This model affords the reseller low start-up costs.
Companies that use the White Label Model:
● Great Value brand
● Whole Foods Market's
● 365 Everyday Value
Wholesale
How the Wholesale Model works?
The wholesale model is an intermediary that buys in bulk
from the manufacturer at discounted prices and then sells at
higher prices to retailers.
Wholesalers also sell to retailers at discounted prices, such

that the retailers then sell directly to the end consumer at
even higher prices.
How the Wholesale Model makes money?

Wholesalers buy at discounted rates from manufacturers,
thus saving them costs. The Wholesale Model generates
revenue by selling at higher prices to retailers.

Companies that use the Wholesale Model:
● Costco Wholesale Corporation
● Sam’s Club
● BJ’s
Work Cloud
How the Work Cloud Model works?
The Work Cloud Model is one that ensures the delivery of
different computing services through the internet to our
devices.
Rather than keeping files on a local storage device, It makes

it possible for consumers to save files and documents in a
remote database, and retrieve them whenever they are
needed. Consumers can also access computing services like
data storage, servers, databases, networking, and software.
How the Work Cloud Model makes money?

The Work Cloud Model generates revenue by offering
customers data spaces where they can store their data for a
recurring fee.
They often offer customers guaranteed availability, which

enables them to price in maintenance and sell their capacity
at a premium with full service.
The Work Cloud Model businesses might charge a fee for

customers to access some software services.

Companies that use the Work Cloud Model:
● Google Cloud
● Amazon Web Services (AWS)
● Microsoft Azure
Worker Cooperative
How the Worker Cooperative model works?
The worker co-operatives models are businesses that are
owned and democratically controlled by their employees.
This model puts the worker and community benefit at the

core of its purpose. Thus, the worker-members benefit
directly from the successes of the business. Profit is shared
based on hours worked, job position, seniority, and salary.
New employees are accepted into the cooperative after a
probationary period.
How the Worker Cooperative Model makes money?

The Worker Cooperative Model generates revenue through
membership dues.
Many worker cooperatives produce goods and services,

which they sell to generate revenue.
They also generate revenue through revolving capital.

Government agencies and international foundations
sometimes make donations to worker cooperatives.

Companies that use the Worker Cooperative Model:
● Union Cab of Madison Cooperative
● Cooperative Home Care Associates (CHCA)
● Isthmus Engineering and Manufacturing

CONCLUSION
At the end of the 18th century, Antoine de Lavoisier,
mathematician and chemist, asserted that in all the reactions
of these experiments: “nothing is lost, nothing is created,
everything is transformed”.
He could not prove it back then but I'm sure that if he was a
business researcher in the 21st century he would be able to
do so.
Any great startup nowadays just adopted or mixed different

business models into their own market to strive.
But remember, don't over complicate it. Mix, combine, but

keep it simple. Never forget that.
Good luck and have fun!

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The following references were consulted to create this Super

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➔ https://www.causal.app/blog/b2b-b2c-b2b2c-b2c2
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➔ https://www.ldoceonline.com/dictionary/bargain-ba
sement-price
➔ https://en.m.wikipedia.org/wiki/Bidding_fee_auctio
n
➔ https://blogs.cornell.edu/info2040/2019/10/24/bidd
ing-fee-action-penny-action/
➔ https://m.youtube.com/watch?v=4gLmbfCjwFI
➔ https://en.m.wikipedia.org/wiki/Brick_and_mortar
➔ https://www.investopedia.com/terms/b/brickandmo
rtar.asp
➔ https://www.masterclass.com/articles/brick-and-mo
rtar-store-guide
➔ https://builttosell.com/
➔ https://en.m.wikipedia.org/wiki/Worker_cooperativ
e
➔ https://institute.coop/what-worker-cooperative

➔ https://canadianworker.coop/about/what-is-a-work
er-co-op/
➔ https://en.m.wikipedia.org/wiki/Car_dealership
➔ https://howtostartanllc.com/business-ideas/car-dea
lership
➔ https://snapcell.us.com/car-dealership-business-mo
del/
➔ https://www.techopedia.com/definition/4241/carew
are
➔ https://en.m.wikipedia.org/wiki/Careware
➔ https://en.m.wikipedia.org/wiki/Chemical_leasing
➔ https://chemicalleasing.com/
➔ https://contentmarketinginstitute.com/2020/07/clic
kbait-headlines-good-tactic/
➔ https://edu.gcfglobal.org/en/thenow/what-is-clickb
ait/1/
➔ https://www.sciencedirect.com/science/article/pii/S
000768131930031X
➔ https://breezy.io/blog/joint-venture-examples
➔ https://www.tonyrobbins.com/business/what-is-a-joi
nt-venture/
➔ https://en.m.wikipedia.org/wiki/Collective_business
_system
➔ https://blog.hubspot.com/sales/franchising-advanta
ge-disadvantage
➔ https://www.webscribble.com/blog/6-sources-non-
dues-revenue-association
➔ https://en.m.wikipedia.org/wiki/Combinatorial_aucti
on
➔ https://www.researchgate.net/publication/2259485
96_Combinatorial_Auctions_in_Procurement
➔ https://www.thebalancecareers.com/commission-b

ased-sales-jobs-4588585
➔ https://www.altexsoft.com/blog/revenue-model-typ
es/
➔ https://smallbusiness.chron.com/types-community-
business-models-3998.html
➔ https://en.m.wikipedia.org/wiki/Consignment
➔ https://brandongaille.com/explanation-of-the-consi
gnment-business-model/
➔ https://millennialmoney.com/best-consignment-sho
ps/
➔ https://cooperativesfirst.com/blog/2020/07/09/5-re
asons-co-ops-make-profit/
➔ https://en.m.wikipedia.org/wiki/Consumers'_co-ope
rative
➔ https://www.nerdwallet.com/article/banking/best-cr
edit-unions
➔ https://consumerfed.org/consumer-cooperatives/
➔ https://en.m.wikipedia.org/wiki/Assembly_line
➔ https://www.investopedia.com/terms/a/assembly-li
ne.asp-0
➔ https://smallbusiness.chron.com/start-joint-venture-
assembling-business-17703.html
➔ https://www.restaurantrealty.com/advantages-disad
vantages-of-an-asset-sale-versus-a-stock-sale/
➔ https://www.cnbc.com/amp/2011/11/17/5-companies-
that-sold-the-most-to-survive.html
➔ https://evensky.com/news/asset-sale-vs-stock-sale/
➔ https://www.investopedia.com/terms/a/asset-sales.
asp
➔ https://www.magazines.com/
➔ https://smallbusiness.chron.com/advantages-offeri
ng-discounts-business-25765.html

➔ https://www.investopedia.com/terms/b/bargain-pur
chase.asp
➔ https://www.investopedia.com/ask/answers/042715
/how-do-subscription-business-models-work.asp
➔ https://fastspring.com/docs/classic/offering-a-disco
unt-over-a-period-of-time-for-a-subscription-produc
t/
➔ https://ncbaclusa.coop/resources/co-op-sectors/ret
ail-co-ops/
➔ https://www.investopedia.com/terms/d/donationba
sed-crowd-funding.asp
➔ https://www.businessnewsdaily.com/4134-what-is-c
rowdfunding.html
➔ https://en.m.wikipedia.org/wiki/Crowdfunding

ABOUT THE AUTHOR
Daniel Pereira is a Brazilian-Canadian entrepreneur that has

been designing and analyzing business models for over 15
years. You can read more about his journey as a Business
Model Analyst here.
E-mail Daniel if you have any questions

at: daniel@businessmodelanalyst.com
You can connect with Daniel at Linkedin:
https://www.linkedin.com/in/dpereirabr/


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BUSINESS

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The Business Model Analyst is a website dedicated to

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About The Author 316

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New technologies and consumer behavior changes are

The same can be said about their business models. Their

After trying to classify business and its business models in

That's how this almanac was born. Use it as a reference

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They operate by selling a wide range of common and niche

Most of their locations are targeted at areas that are a

How Does the .99 Shop Make Money?

These types of stores typically have minimal employees and

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Accreditation Businesses work by issuing or helping third

How the Accreditation business model makes money?

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The user can now decide on whether to upgrade to the

How Does the Ad-Free Subscription Model Make Money?

This model is most popular among social media platforms,

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Companies That Use the Ad-Free Subscription Business

This works most successfully with products or services which

A good example would be a mobile game that users may play

How Does the Add-On Business Model Make Money?

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Companies That Use the Add-On Business Model

The first step in building a successful advertising business

Many large businesses such as Google, Facebook, and Uber

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Other popularly used monetization methods include

Companies That Use the Advertising Business Model

How the Adware business model makes money?

Companies that use Adware business model:

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This model usually have three different players: the seller

When a visitor clicks on a link at the affiliate website, this

How the Affiliate model makes money?

Companies that use Affiliate model:

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It's a very common business model in artistic and

How the Agency business model makes money?

Companies that use Agency business model:

● Creative Artists Agency

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Although not very common, some aggregator business may

There are many different types of aggregator businesses:

● Smart Grid aggregator

● Affiliate Ecommerce Websites

How the Aggregators model makes money?

Product or service aggregator makes money using an affiliate

Companies that use Aggregators model:

● Shut up and take my money