Presentation on

Types of Business

Models

by Amanjot Singh
What is a

Business model? A business model is the plan your business has for
making money. It’s an explanation of how you deliver
value to your customers at an appropriate cost. This
includes descriptions of the products or services you
plan to sell, who your target market is, and any
required expenses.

Business models are important for both new and

established businesses. They help new, developing
companies attract investment, recruit talent, and
motivate management and staff.
Types of
circle-chevron-right Retailer circle-chevron-right Pay-As-You-Go

Business models circle-chevron-right Manufacturer circle-chevron-right Brokerage

circle-chevron-right Fee-for-service

circle-chevron-right Subscription

circle-chevron-right Freemium

circle-chevron-right Marketplace

circle-chevron-right Affiliate
 The business model of retailing involves buying merchandise in large
quantities from wholesalers (or manufacturers) at low price and selling it
in small quantities to the general public at higher price. The difference in

Retailer Model price is called gross profit.

Retailers operate the business through different functions to deliver this

final service of making merchandise available to the end consumer to
buy through a convenient channel at a profitable margin for the
business.

 Examples of Retailer Model

Croma Vijay Sales Walmart

 A manufacturer business model is a well-devised system that describes
how a manufacturing organization will create, deliver, and capture value
in economic, social, and cultural domains. In simpler terms, it’s how you,
as a manufacturer, will go about your business, how you will generate

Manufacturer revenue, and how you will ensure business survival.

Model A manufacturer is responsible for sourcing raw materials and producing

finished products by leveraging internal labor, machinery, and
equipment. A manufacturer may make custom goods or highly
replicated, mass produced products. A manufacturer can also sell goods
to distributors, retailers, or directly to customers.

Examples of Manufacturer Model

Apollo Tyres BHEL Dabur

 Fee for service (FFS) is the most traditional payment model of healthcare.
In this model, the healthcare providers and physicians are reimbursed
based on the number of services they provide or their procedures.

Payments in an FFS model are not bundled. This means that the

Fee-for-Service insurance companies or the government agencies are billed for every
test, procedure, and treatment rendered whenever a patient visits the
Model doctor, has a consultation, or is hospitalized.

This payment model rewards physicians for the volume and quantity of
services provided, regardless of the outcome.
Example of Fee-for-Service Model

Hospitals / Healthcare
 A subscription business model is a recurring revenue model in which
customers pay a weekly, monthly, or yearly fee in exchange for your
products or services. Customers can renew their subscription after a
certain period of time. This model allows you to leverage your customer

Subscription relationships to create a steady stream of income.

Model Subscription-based revenue models benefit both the company and the
customer. As a customer, you have the convenience of automatically
repurchasing a product or service that you know you're going to need in
the future. As a business, you retain customers for future sales rather
than needing to re-engage them on a more frequent basis.
Examples of Subscription Model

Netflix Amazon Zomato

 Freemium is a business model in which companies offer users the most
basic version of a product for free, while encouraging them to upgrade
to a paid premium version that comes with additional, advanced
features.

Freemium The freemium strategy is different from premium with free samples
Model strategy as you don’t pay anything to utilize the free services provided
under the freemium business model.

Even the market leaders like LinkedIn, Tinder, YouTube, , etc. use a
freemium model to increase their user-base and generate more revenue
by implementing micropayment strategies

Examples of Freemium Model

Netflix YouTube LinkedIn

 The marketplace model of ecommerce refers to the business model
where e-commerce marketplaces provide a centralized platform to
multiple sellers where they can sell their products while connecting with
potential customers.

Marketplace Irrespective of B2B or B2C operation, with a marketplace model, online

Model retailers can increase their product assortments, expand their sales
channels, and enhance profitability at lesser risk. Hence, sellers can focus
more on their core competencies i.e. offering relevant products to the
customers that will enhance customer experience.

Examples of Marketplace Model

Fiverr Facebook Etsy

 The affiliate (or click-through) model is a popular e-commerce
relationship in which an online merchant agrees to pay an affiliate in
exchange for providing an advertisement and link to the merchant's site.
Each sale generated as a result of a customer "clicking through" from an

Affiliate Model affiliate to the merchant results in a small commission for the affiliate.

The deal provides a stream of cash to affiliates and brings the merchant,
which owns the affiliate network, a host of new traffic, cutting
customer-acquisition costs and allowing it to target its desired audience.
Examples of Affiliate Model

Social Media
Influencers
 The pay-as-you-go (PAYG) pricing model means that users pay based on
how much they consume. For example, a cloud storage service provider
could charge based on the amount of storage used, while many phone
carriers bill based on minutes used. You’ll also hear pay-as-you-go

Pay-As-You-Go referred to as a usage-based or consumption-based model.

Model One major benefit of the pay-as-you-go model, which is a form of

consumption-based pricing, is that there are no wasted resources. Users
only pay for what they use rather than a certain amount of resources
that may or may not be used.
Examples of Pay-As-You-Go Model

AWS Google Cloud Zoom Car

 A brokerage business model connects buyers and sellers without directly

selling a good themselves. Brokerage companies often receive a

percentage of the amount paid when a deal is finalized. Most common in

real estate, brokers are also prominent in construction/development or

freight.

Brokerage
Model Brokers are compensated in commissions or fees that are charged once

the transaction has been completed.

Examples of Brokerage Model

Zerodha Angel Broking

Thank You