Business Model Changes associated with the Web

1. Direct-to-Consumer (D2C) Sales: The implementation of e-commerce allows businesses to bypass traditional intermediaries, selling directly to consumers. This D2C model often results in reduced costs, increased profit margins, and direct control over brand image and customer experience. It also allows companies to gather first-hand customer data, enhancing personalized marketing efforts and improving product development based on customer feedback.
2. Multi-Channel and Omni-Channel Retailing: E-commerce provides businesses the opportunity to sell across various online platforms, such as their own websites, third-party marketplaces like Amazon or eBay, and social media platforms. This multi-channel approach broadens market reach and customer base. Meanwhile, omni-channel retailing, a more integrated approach, ensures a seamless and consistent customer experience across all channels, boosting customer engagement and loyalty.
3. Subscription-Based Model: The internet has popularized subscription-based services, where customers pay a recurring fee to receive products or services regularly. This model ensures a steady revenue stream for the business and simplifies the purchasing process for the customer, enhancing customer retention. Examples include monthly deliveries of various goods, software subscriptions, and digital media services.
4. Dropshipping: The internet has enabled the rise of dropshipping, where the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. This business model minimizes inventory and warehousing costs, making it an appealing option for many e-commerce businesses.
5. Data-Driven Business Decisions: E-commerce platforms provide businesses with a wealth of data about customer behaviors, preferences, and trends. This data can be analyzed to inform strategic decisions, optimize marketing efforts, improve customer service, and tailor products or services to consumer needs. This shift towards a data-driven business model can significantly enhance operational efficiency and profitability.
6. Dynamic Pricing: E-commerce allows for dynamic pricing, where prices can be adjusted in real-time based on factors such as demand, customer behavior, and competitive landscape. This pricing strategy can maximize profitability, improve sales velocity, and optimize inventory management.

1. Sales: Web prospects and customers can configure their own pricing, choose their own shipping, make the payments, and track the fulfillment - all without the aid of an actual salesperson.
2. Service: Access to customer support specialists through email or chat not only keep Web-centric customers happy, but can reduce the overall operational costs of customer service.
3. Competition: The cost of using the Web as a retail outlet typically is far less than the costs of a physical store, and a rash of new competitors should be expected.
4. Marketing: A buyer can compare the websites, and thus the products, prices, and associated services of competitors. This can translate into changes in product mix, pricing, branding, and campaigns.

Web business models have once again taken center stage. However, many of the predictions concerning the impact of the newer models will require several more years of maturation before they will influence most organizations.

In the most basic sense, a business model is the method of doing business by which a company can sustain itself, by generating revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain. A company produces a good or service and sells it to customers. If everything goes well, the revenues from sales exceed the cost of operation and the company realizes a profit.

Profit = Sales - (Cost of Operation)

Other models can be more intricately woven and broadcasting is a good example. Radio and television programs have been broadcasted over the airwaves free to anyone with a receiver for much of the past century. The broadcaster is part of a complex network of

1. distributors,
2. content creators,
3. advertisers , and
4. listeners or viewers.

Who makes money and how much is not always clear at the outset. The bottom line depends on many competing factors.
Internet commerce will give rise to new kinds of business models. In addition, the web is also likely to reinvent tried-and-true models and auctions are a perfect example. One of the oldest forms of brokering, auctions have been widely used throughout the world to set prices for such items as

1. agricultural commodities,
2. financial instruments, and
3. unique items like fine art.

The Web has popularized the auction model and broadened its applicability to a wide array of goods and services.
Business models have been defined and categorized in many different ways. This is one attempt to present a comprehensive taxonomy of business models observable on the web. The proposed taxonomy is not meant to be exhaustive or definitive and internet business models continue to evolve.