Online businesses are receiving a lot of attention due to the development of IT technology and reforms in working style. There are many different business models so that an online business can be done without going to a store as long as there is an internet environment. This time, chiasenow will explain online business types, advantages, disadvantages and how to start.
How to start different types of online businesses, advantages and disadvantages
What is Online Business?
What is Online Business?
Online business is a term that means all business activities carried out on the Internet. Also known as online business, internet business or network business.
Different people have different conceptions of online business and some people imagine a business can make money with just a personal computer and Internet environment, while others make money by selling products and services are also sold in physical stores on the Internet.
In this article, we will proceed to explain after defining the overall business model that aims to make money in some way using the Internet as Online business.
Sell manufactured or purchased products
There are many types of online businesses. Online business can be divided into the following five main business models.
1. Sell manufactured or purchased products
It is a method of selling products that are manufactured by yourself or purchased from other companies. It includes small-scale products such as selling handmade products through flea market apps, e-commerce platforms that use arbitrage to make a profit, and companies with physical stores that sell products online. By using means like flea market apps and e-commerce sites, anyone can start an online business with relative ease.
It is recommended for business owners who already sell products in physical stores and who want to ease their online business as a side business.
2. Provide services
Providing online services is also one of the online business forms.
For example, services such as management consulting, English conversation lessons, online consulting and processing can be applied. High profit margins can be maintained as production and purchasing costs are reduced. In addition, this is the recommended form of Online business for those with in-depth knowledge, skills and know-how as they can make the best use of their own know-how and skills.
3. Content distribution and sales
An Online business that distributes and sells content on the Internet is diverse, including distributing applications, games, music, and videos. To make enough profit with this method, it is necessary to develop content that meets the needs of the customer, and then promote and sell it in a way that is relevant to the goal. So it is especially difficult in Online business.
Just creating content and attracting customers successfully and loved by many people, it is likely to earn a large amount of income, it can be said that this is a high-risk, profitable business form. high.
4. Earn advertising revenue
In Online businesses that use advertising on the Internet, it is possible to attract customers through blogs, media websites, YouTube, etc. and earn revenue from advertising placed in articles and videos. Internet advertising includes Adsense advertising, which generates revenue by clicks only, and performance based advertising (links), which generates revenue by generating results such as product purchases.
While the advantage is that it can be started easily and the cost is low, it also has the disadvantage of taking time to attract customers and execute contracts and take time to earn money. In addition, the difficulty is not low because it requires skills and senses such as SEO measures and sales writing to make a profit.
5. Community supply contract
An online business takes orders and uses skills to provide products through cross-selling (crowdsourcing), which is an online outsourced service.
The biggest commendable point is that even those who are just starting an online business can easily start because there are simple tasks such as data entry such as business card information and transcription of voice tapes. In addition, even if you are not actively doing sales activities, you can get order requests by attractive skills such as writing, SEO, programming with your profile, and more attractively. you can easily earn a large income depending on the content of the order.
See also: Is your business idea a cross-out to success?
3 benefits of online business
Compared with the type of physical store business, online business has the following three advantages.
3 benefits of online business
1. You can do it right away without too much initial cost or monthly fixed costs
The biggest advantage of an online business is that you can reduce costs such as initial costs and monthly fixed costs. In the case of a physical store business, there is an initial cost to purchase business equipment, and after the store opens, a large amount of fixed costs such as office rent are incurred. On the other hand, online businesses can basically make money if they have a personal computer and an Internet environment, and can save a lot of fixed costs and initial costs.
Even if you buy and sell products, you dont have to pay office rent, so the monthly cost will be cheaper than if you have a physical store.
2. You can do business with people all over Vietnam and all over the world
When doing business in a physical store, customers tend to be limited to cities, wards, towns and villages of the same and neighboring type, except in cases such as dealing with rare products. Of course, if you want to do this, you need to do business with customers hundreds of kilometers away, but its not very practical because transportation and other costs are high.
On the other hand, in the case of an Online business, if you have an internet environment, you can provide products and services to people nationwide as well as worldwide, and the number of customers will increase rapidly, that is a unique demonstration for online business.
3. Less stress
In the case of a physical store type of business, it is necessary to regularly interact with people to serve customers, negotiate business, educate employees, etc. tendency to accumulate stress in interpersonal relationships.
On the other hand, in the case of an Online business, it is possible to gain profits while reducing the opportunity to interact with people compared to a physical store business. If you have a business model such as Internet advertising revenue through blogs or e-commerce, you can earn revenue without meeting people.
For those who say personal relationships dont go well or get stressed out easily, the benefits will be huge.
4 disadvantages of online business
4 disadvantages of online business
This form of online business is smart and low-risk, but it is not only beneficial. Please note that online business also has the following 4 disadvantages.
1. It takes time to get a business on the right track
It takes a certain amount of time to make money from an online business because of the number of completed clients on the Internet.
For example, if you start blogging and earn advertising revenue while only attracting customers with search engines like Google and Yahoo, it will take half a year to a year to have a steady stream of income. Since the blog hasnt had any revenue for a while, youre better off using SNS like Twitter and Facebook to increase your ability to attract customers or get other revenue streams.
2. Required skills corresponding to each field of Online business
To have a successful online business, you need to have the skills corresponding to each business model.
For example, if you want to make money blogging, you need skills like writing, SEO measures, and sales writing. If you want to create and sell apps, youll need skills like programming and design. If you do not have a clear strength or know-how for each online business, we recommend that you establish your strengths first or have someone with the skills do the work.
see more What are business skills? 4 essential skills and easy ways to master
3. There is a lot of competition, so differentiation is necessary
An online business is easy to start and since all domestic and foreign trade areas are located within the commercial sector, there tends to be a significant increase in the number of competing companies and sole proprietorships. Therefore, there is a risk that it is not possible to make a steady profit simply with skill and know-how. There are many competitors with high-level skills and know-how, and if you choose the same business model, you will need to set yourself apart from the competition.
For example, if you monetize blogs, you can also target monetization in genres that popular bloggers and corporate websites dont deal with. In any case, if we can provide products and services that dont compete with the competition, we will be more likely to make a steady profit.
4. Risk of loneliness and reduced motivation
The advantage of reducing the stress of interpersonal relationships in an online business can also be the disadvantage of becoming lonely due to reduced contact with people.
Since online trading can basically be done with just one computer, it is possible that a day will end without talking to anyone and withdrawing money every day. Its important to note that feeling lonely can lead to mental exhaustion as the days of not talking to anyone continue.
Its also hard to stay motivated because you work alone. As long as theres no other persons vision, good or bad, you need to take measures like using a coffee shop or co-working space to stay motivated by changing work locations from time to time. time.
How to Start an Online Business
How to start a successful online business
Finally, I will explain how to start an online business. In general, you should start an online business with the following two things.
Low risk when starting business under the rumor Activity
There are many types of online businesses, but the level of difficulty varies greatly depending on the content. If you create and sell your own content or products, it is difficult and not recommended for beginners because of the need to do a lot of customer needs surveys and customer acquisition. In addition, there is a risk that the business model of earning ad revenue by operating a blog and YouTube will take time to monetize or revenue will decrease due to the changing rules.
If you are going to start a new online business, you should start with a contract business using community sourcing. Since this is a business model where you can make a profit by delivering items requested by a partner company, you should be able to earn a relatively stable profit if you are skilled.
Repeat input and output
Its not just about an online business, but its important to constantly iterate on the inputs and outputs for a successful business.
No matter how good your skills and ideas are, they dont always work out. Therefore, it is important to output, the perceived input obtained from success or failure, and implement the subsequent output. By iterating this input and output, we can expect a steady approach to success.
When you start an online business, dont give up even if you make mistakes, and keep in mind that you will always repeat trial, error and correction.
Making Online Business a Working Style Choice
Online businesses have the disadvantage of taking time to get started, but they also have the potential to generate huge profits with relatively little effort. With the impact of the corona epidemic, the advantage in the time of corona epidemic is the mandatory social distancing Online will attract more attention.
For those who run a physical store or want to start a new business, why not add an online business as a new way of working?