Making money from your online product: 6 models
- Juliëtte Geers
- 15 May 2023
- Edited 20 Jun 2022
- 2 min
- Marketing, Digitalisation
You have an online product, such as an app, computer game, software, blog, website or digital service. And of course you want to earn money from it. Learn more about 6 different revenue models to convert your online product or service into cash.
1. The free model
When you use the free model, you provide software or a service free of charge. Well-known examples are Google, social media platforms, and smartphone games. Free products or services are attractive to users: they can try them out without having to pay. And this revenue model is certainly interesting if you are launching a new product or looking for new customers.
Making money with the free model
With the free model, you earn money by selling advertising space on your website, in your game or software to advertisers. For example, the user will see an advertisement after each completed level in your computer game. Or hear commercials in between the music on your digital playlist.
2. Freemium model
The freemium model is a variant of the free model. The difference is, that only part of the product is free. Does the user want a full or a better version? Then they have to pay. For example, the website WeTransfer, where you have to pay transfer costs for files larger than two gigabytes. Or business consultants who share their expertise for free via e-books, webinars and digital newsletters. But the customer has to pay for tailor-made advice.
This model is a good choice if you know what existing customers are willing to pay extra for, you want to remain attractive to new customers, and want to earn more from existing customers.
Making money with the freemium model
You earn money online with the freemium model because your customers are willing to pay for extras. And, in addition, in the free version you can sell advertising space as with the free model.
3. User-designed model
With the user-designed model you make use of the creativity of your customers. They design their own T-shirts, mugs, tiles, puzzles, stickers, photo books or wallpaper on your website or app. You just carry out the order. This model saves you as a supplier time and money and is suitable for products that you can easily print and personalise.
Making money with the user-designed model
Your income with this model comes from the sale of the end product. You offer the service with which customers can make their product for free.
4. Online platform
With this business model your app or website, the online platform, brings supply and demand together. Think for example of Marktplaats or BlaBlaCar. An online platform works best if you have a monopoly.
Making money with an online platform
You earn money through advertising sales, or by asking for a certain amount per transaction. You can also ask for a percentage of the sales price.
5. Subscription model
With the subscription model your customers buy access to your product or service for a set period. Usually, they take out a subscription for a month or a year.
This model is often used by antivirus software providers but also streaming services, like Netflix and HBO. You can also offer physical products such as flowers, tea, wine or underwear with a digital subscription. You offer the subscription online and send the product to your customer every month.
Choose a subscription model when you want loyal customers and a steady income stream.
Making money with the subscription model
You earn money online with this model because your subscribers pay you a monthly or annual amount. Continuously renew your product to keep customers loyal.
6. Online store
Yes, an online store, or webshop, as it is often called in the Netherlands, is also a digital business model. Before you start an online store, choose whether you want to sell multiple products such as Bol.com, or only one type of product.
Making money with an online store
With the online store model you earn money by selling your product. Meanwhile, you can save on storage costs by dropshipping.
You can find more strategies for making money in the article 20 revenue models for a successful business. Have you already made your choice, and do you want to include the business model in your business plan? Give the Business Model Canvas a go.
Unfortunately, the video that complements this article does not come with English subtitles yet.