Businesses need to select the right business model to ensure that they are able to be profitable. Business models focus on a different business aspects, depending on the operations of the specific business. Makamba Online takes a brief look into the most popular business models, so that you, as prospective business owners, can build a business plan around a model that suits your company best.
A direct selling model is basically a company which makes products and provides them to consumers via retail outlets or online markets. There is definitely no middle man in this type of business model. This normally means that the business will be more profitable. A well-known example of a direct selling model is Dell. They manufacture and sell their own products in both retailers and online.
A franchise model uses name brand awareness of the franchisor to help the franchisee to be more rewarding. When businesses choose the business model, there is really no requirement for major companies to get outlets in order to promote their products or services. Instead, the franchisee pays to keep business under the name of the franchisor. It can be basically like opening up a store that has a number of restrictions that are established by the franchisor. Makamba Online recently ran a series of articles focusing on the business of franchising, you can read more here:
Circulation business models
A distribution model is actually a business in which distributors buy products from the producer in order to sell them in their retail stores. While they can sell the products made by different manufacturers, they are not required to operate under the brand. They can operate their business under their own title. Examples of a distributors would be car dealership and book seller. They buy vehicles from the manufacturer, and they market them under their particular name. Booksellers buy from publishers and sell.
A retail model is basically a business that buys items from a certain provider and sells them in their retail location. With technological advances and online shopping, consumers purchase many products from the manufacturer. This omits the middle man, and allows them to save some money, such as owning shop space in a mall etc.
Bricks and clicks
A bricks and clicks model is the most recent business model. This really is a model in which stores accept orders over the phone and allows customers to come into the store to get their merchandise or have it shipped instantly to their house. It blends a traditional mortar and brick shop and an online store in a single entity. This offers a lot of ease to shoppers.
Do you have a specific business model that is working for your company? We would like to hear from you – email us at email@example.com to share your story of success.
Author: Gesture Chidhanguro