eCommerce Means Real Business Models on the Internet
eCommerce is growing like hell in any developed Country and in almost any developing Contry. That’s good news for anyone in the eCommerce or related industries, but also for anyone trying to launch or make grow a internet business, because eCommerce means real transactions, and a real business model with a lot of branches (new and future business models).
Until nowadays, it was really hard for a lot of startups (content or services) to develop a robust and scalable business model, because you had two main options: charge your users for accessing your service or adopting an advertising based business model. As Internet users are used to access contents and services for free, it’s really hard to be able to charge them for accessing our contents or services, and that’s why a lot of startups have adopted a freemium model where you give access to a reduced or limited version of your service for free and then charge your pro users for an unlimited access. But when analyzing the statistics of freemium based startups, you notice that the freemium model doesn’t works for a lot of startups, so it may not work for your startup and will require you have a lot of money to support a fast growth of users that doesn’t make to increase your revenues. In certain domains, specially if we focus on mobile games, variations of the freemium model (in-app payments, digital goods, etc.) are working great for a lot of startups, but for most web based startups the freemium business model has demonstrated to be a real failure.
Advertisement is an unsustainable business model for the majority of internet companies. The reality behind this business model is that only a few big companies are making big money with this business model. You only have to talk to several publishers to notice that if you base your business model in advertisement, you’ll find yourself trapped with no way out.
In the “real world”, there exist plenty of business models, but every business model is based on the idea that in some point there exist a real economic transaction. eCommerce is bringing real transactions to the Internet, so now the online channel has the same strong basis that makes possible to develop successful business models. And you could say that internet business models in the end generated transactions in the real world, and that could be true (but not always), but the fact is that since eCommerce has started to shine, a lot of business models have emerged or have consolidated: ecommerce (direct transactions), subscription models, affiliation, group buying, etc. And in the last months, I’ve seen a lot of startups developing pretty interesting projects around eCommerce, but with new and interesting business models, that are based on the existence of eCommerce.
Nothing has changed, but everything have changed. eCommerce is bringing stability and sustainability to the Internet, and for the first time we can be sure that we have a strong foundation where to build our internet businesses.