Valuetainment - April 08, 2020


Episode 452： 10 Types Of Business Models For Every Entrepreneur


Episode Stats

Length

4 minutes

Words per Minute

177.13153

Word Count

804

Sentence Count

75


Summary


Transcript

00:00:00.000 Every business has a different model of how they make money.
00:00:25.000 Today we're going to talk about the 10 different business models of how to build your business
00:00:28.480 around.
00:00:28.820 So let's get right into it.
00:00:30.040 These are 10 different business models of how to generate revenue.
00:00:33.920 There's many ways of doing it, but these are 10 different models.
00:00:36.640 The first one is you give the product away for free.
00:00:39.280 A lot of times people wonder, why are they giving away the product for free?
00:00:42.380 Because they make the money on the back end of advertising.
00:00:45.520 Example, YouTube.
00:00:47.140 Many companies do this.
00:00:48.720 This is one of the models.
00:00:49.700 The second model is the freemium model with a pay for upgrade.
00:00:53.020 LinkedIn is free, but if you want to upgrade, you got to go and subscribe to a certain cost
00:00:57.320 that they have, right?
00:00:57.900 It's an upgrade, $24.95, $49.99, $99.95, but you start up as a freemium.
00:01:03.320 So business model number three is pricing based on average value to customer.
00:01:06.660 Meaning, so you got five different customers, right?
00:01:09.820 It may be health insurance.
00:01:11.060 It may be auto insurance.
00:01:12.780 Somebody may be a great driver.
00:01:14.420 They don't have any issues.
00:01:15.240 Somebody may be a terrible driver.
00:01:16.580 They have a lot of issues.
00:01:17.340 They average that out and come out with a price point that's average to the customer.
00:01:21.940 And some may be paying a little bit higher.
00:01:23.640 Some may be paying a little bit less.
00:01:25.400 But it is what it is.
00:01:26.200 Like the health insurance, when it came out recently, they said, well, why am I paying
00:01:29.220 so much insurance?
00:01:30.480 When I'm younger and I'm healthy, I don't have any issues.
00:01:32.540 You're kind of paying for the insurance of the people that are not healthy, but they're
00:01:35.800 getting it.
00:01:36.180 So it's the average cost for the product they're selling.
00:01:39.040 Fourth model is price based on product cost plus margin.
00:01:43.340 This is traditional.
00:01:44.560 You buy these pants for $20, you sell them for $30.
00:01:47.140 You buy this, you know, whatever product you got for $15, you sell it for $40, right?
00:01:51.860 Number five is price with recurring low subscription payment.
00:01:55.600 Hence, Netflix.
00:01:56.780 It's a very common model today.
00:01:59.460 People say Netflix, $799, $999, $1299.
00:02:02.620 That's not a lot of money.
00:02:03.500 Times $150 million customers, it's a lot of money.
00:02:07.260 Number six is very basic.
00:02:08.540 Tier pricing based on volume.
00:02:10.100 So real estate, how much you buy, how much is your volume.
00:02:13.220 The more you buy, the less we charge you.
00:02:15.660 You know, if I'm getting a commission contract with an insurance company, if you sell this
00:02:20.220 much policies, we'll give you this much.
00:02:22.180 But if you sell more, we'll give you more.
00:02:23.460 So it's all volume based.
00:02:25.240 The more you do, the more leverage you have for negotiation.
00:02:27.920 The more you do, the less the cost is going to be to the customer because you're banking
00:02:31.740 on volume.
00:02:32.300 Number seven is revenue.
00:02:33.500 As a percentage of every transaction, commission, okay?
00:02:36.780 That's a commission that they're doing.
00:02:38.180 The revenue comes from a commission base that they're paying out.
00:02:40.820 Number eight, low product price, but support is extra.
00:02:44.180 This is everywhere.
00:02:45.260 The product isn't that much, but you want the extra support?
00:02:48.360 Here's $99 per year or $999, all that stuff additional that they tag on.
00:02:54.040 Number nine, low entry price with priced features additional.
00:02:58.800 So you're buying a car.
00:03:00.220 This car right here, I just bought a car and it's being delivered right now.
00:03:03.500 But if you want to add this, and if you want to add this, and if you get this, it's all
00:03:07.720 the additional add-ons that you have, right?
00:03:09.880 That's the additional add-ons.
00:03:11.060 And last but not least, number 10 is very simple.
00:03:12.960 Low price, but money is made based on disposable.
00:03:15.940 So I sell this razor stick, and I sell it to you for $10, but I know you got to come and
00:03:21.040 buy the razors every time you're done shaving because it goes from green to white.
00:03:24.420 You got to buy it.
00:03:25.360 I'm making my money on disposable.
00:03:27.420 It's a very, very big Procter & Gamble type of a business model, but it's very effective.
00:03:32.360 Again, it's all about how you want to set up your business model to generate revenue.
00:03:36.580 Thanks, everybody, for listening.
00:03:37.800 And by the way, if you haven't already subscribed to Valuetainment on iTunes, please do so.
00:03:42.400 Give us a five-star.
00:03:43.700 Write a review if you haven't already.
00:03:45.300 And if you have any questions for me that you may have, you can always find me on Snapchat,
00:03:49.300 Instagram, Facebook, or YouTube.
00:03:51.260 Just search my name, Patrick Bid David.
00:03:53.180 And I actually do respond back when you snap me or send me a message on Instagram.
00:03:58.000 With that being said, have a great day today.
00:03:59.820 Take care, everybody.
00:04:00.560 Bye-bye.
00:04:02.360 Bye-bye.