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Types of Online Businesses

Types of online businesses. You may have wondered what is an online business, how do they work and what are the different types of online businesses.

Well first off we have to differentiate an online business from online marketing. You have probably heard both of these terms many times before but what is the difference and why is it important?

Online marketing is something that most companies do in this age but not all companies are online businesses.

A real estate agency may have a website and acquire customers through it by showcasing properties on it alongside some contact information.

However the follow up and the actual sale of the property mostly always happens after meeting up in an office, taking a look at the property in person and going through some paperwork.

So this would be marketing your product or service online but the business doesn’t happen there. The sale and the fullfillment does not happen online. Just the marketing.

Let’s take a look at a store or a retailer that sells clothing online. Yes, you can select a jacket let’s say on the webpage of the company, finish the checkout and have it sent to your home.

That would be an online business right?

Not quite.

You see after you have finished the checkout on the order page – that order has to be fullfilled and shipped.

That means that someone (an employee) has to go and find the physical product perhaps in a storage compartment, package it and finally ship it to you. There is very little automation there.

Yes, Amazon for example has a very automated procedure when it comes to these things, but they require huge warehouses and many employees and that’s why they are a company that does online marketing.

They are not an online business.

So what is an online business and what are the types of online businesses?

A TRUE online business is a business that runs solely – you guessed it – online – on the internet.

In most cases it’s completely automated¬† (not always though – I will get into that later, it’s open 24/7 all year, requires less or no staff, does not handle physical products but instead digital assets, faster and almost instant delivery of product or service.

It doesn’t require an office space (location freedom), usually has higher profits margins and doesn’t require big investment to get started.

The types of online businesses

In essence it’s quite simple. Running an online business, making money online, affiliate marketing or whatever it’s all called,¬† involves providing a service or selling a product in exchange for compensations.

It’s a business that happens on the internet.

You market your business online and you also deliver your product or service online.

This the key difference from just doing online marketing. You are dealing with digital product or a service that can be rendered through the internet.

Affiliate marketing

A popular way to break into the market and start your own online business is to start doing affiliate marketing. That is the procedure of taking products that other people or companies have created and putting them infront of potential customers.

So let’s say you have a blog, a YouTube channel, an email list or a Facebook page with a lot of followers, you can recommend a product you like or you have tried to them and if you make a sale you get a commission – it’s not uncommom to get 25%-75%.

How is that possible? You see, companies look at affiliates basically as free marketing. With a digital product (let’s say an online course or software) the production cost is only when it’s being created.

When it’s done it’s done an you can make endless amount of copies without any extra cost.

By using affiliates they are getting their product infront of people they probably would never reach in the first place so it makes sense go give 50% of the profits because of the small cost of reproducing digital copies.

The glass is half-full instead of half-empty if you get the point. They are not loosing 50% – they are profiting 50%. Very important to grasp this.


Types of Online Businesses
ClickBank is the biggest marketplace for digital products.

Usually it’s free to join these affiliate programs. You get a unique affiliate ID link that you can promote all over the internet and when somebody clicks it and buys – cha ching! – you made money.

However most companies don’t give you the opportunity to promote higher priced products. Usually you are promoting $27-97 products and with 50% commissions you really have to make a lot of sales to create a substantial income.

If you wan’t know what program I recommend to make $1,000 – $3,000 commission in a single sale go here.

As I said affiliate marketing is one of the types of online businesses people go into because it has a low barrier of entry and it’s easy to get started.

The hard part is to get the traffic to your offer and having people see what you are promoting.


The next in line of types of online businesses is providing some kind of service. Now this would have to be something you can provide through the internet.

What many people incorporate into their business online is doing some kind of coaching or counseling. If you are good at what you do you can teach others or train them via Skype for example.

Believe me, a lot of people are willing to pay big bucks if you can show them special personal attention and help them with their problems. So you could be in the comfort of your home talking to someone on Skype and easily charging $500-$1000 an hour – if you know your stuff.

So you can market your service online – and deliver it. The downside of this kind of business is that you are swapping your time with money. It can not be automated.

You have to be at a certain time physically infront of your computer and coach people.

That’s why it’s important to charge premium. Your time is valuable and you don’t want to spend too much of it working per hour.

Your own products

The third in line of the types of online businesses that you should look into is creating your own products.

This is how the big boys roll on the internet because people will look at you differently and more of an authority if you have your own product or products.

It’s a common believe that you have to be in possession of somekind of license or diploma to be allowed to create and sell your own product.

So false!

Anybody could do it. Have to be an expert? Forget about it. You don’t need any special expertise. No really, you don’t.

You can create your own product and sell it for hundreds of dollars per copies – if not more – without having any skills or specialization.

First affiliate commission

How? Well you see, there are ways to package valuable information and sell it without having that knowledge in your own brain. If you only realized that you could record an expert on video or audio – pay him upfront a fixed fee for the rights to it – then sell that information over and over again. Yes your grandmother could do this actually.

But you have to have somekind of a plan infront of you to do this. There is the right way to do this and the wrong way.

The reason for so few people have their own products is that they don’t have a plan, they have too much self-doubt and it requires time, work and dedication.

That is why so few people create their own information products and never really succeed in building their own online business and that’s why big boys stay BIG and crush it online – because they created theirs.

So the clear benefit of having your own information product is that you are in full control of selling it. You can price it anyway you want. If you have your own ebook you could sell it anywere from $7-$47.

Create a software and sell it for a monthly subscription of $97 or create an online course and sell it for $479.

As long as you create something that can help people achieving their goals faster – and there is enough market for it – then it’s a good chance you will make money with it.

If you want’ to see how I made four figures on the digital launch of my very first information product – check out my flagship video course that shows you the exact blueprint on how to become a big boy on the internet.

Hope this blogpost helped you get a little overview on what types of online businesses you should go into.

Talk later friends!