Business Model 4: Product or Service Provider

In this model we set up a very informative website on your chosen subject, but instead of giving free or selling listings we set up products or services and put on numerous pages within our website.

We are not considering selling our own product or service as this is very difficult to sell globally and you have to consider:

1. Legislation in each Country 
2. High costs of purchasing stock or manufacture
3. Patents and protection mechanisms
4. Fulfillment, packing and shipping
5. Staff, high costs, time sensitive

6.  If you sell other companies products or services you can avoid all these costs and difficulties, so why give yourself such a headache and fill your time? It is easy to find suitable products or services in your chosen market and negotiate a deal so that you can sell for example a product on your website, which you take payment for and then send the order to the supplier minus your agreed commission. This is called drop-shipping the supplier sends out the goods in your company name and the customer is none the wiser.

7. The customer does not know that you:

• Do not have a warehouse
• Do not have any products in stock
• Do not even have an office in their country
• You do not do anything except send a couple of emails

1.  The whole process is automated here is an example of how it works:

The downside of this business model is that you are relying very much on the efficiency of other companies. Therefore before deciding to trade with them it is a good idea to purchase their product or service as if you were a customer. Ring the helpline and find out how helpful they are. Compared to Models 1, 2 and 3 this business model is more difficult to implement and can provide more time consuming problems. For example what happens if the product or service provider does not show up on time, faulty goods etc? They will be coming back to you for an explanation so you need to be confident of what you are providing, and have systems of support in place. With that being said this can still be a very lucrative business model. Try to pick products or items with a reasonable minimum cost, because you will have costs to consider such as taking credit card payments (approx 5%) before you get your commission. So think carefully about what you are supplying, from whom, and whether it is worthwhile financially. 

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