Take a look at different types of business models

All companies are based on a business model. Companies must choose the right business model to ensure they are able to be profitable. Business models focus on some different business aspects. Take a look at the most popular business models and decide which one is suitable for your business.

Direct sales

A direct sales model is essentially a company that makes products and sells them to consumers through retail outlets or online markets. There is really no environment in this type of business model. This generally means that the company will be more profitable. A well-known example of a direct sales model is Dell. They manufacture and sell their own products in retail and online stores.

Franchise

A franchise model uses the knowledge of the franchisor brand to help the franchisee to be more profitable. When companies choose the franchise model, large companies really do not need to invest in outlets to sell their products or services. Instead, the franchisee pays to open the company under the name of the franchisor. It is essentially to open a store that has some restrictions presented by the franchisor.

Distribution

A distribution model is a company in which distributors purchase manufacturer’s products to sell them in their retail stores. Although they sell products made by different manufacturers, they are not required to operate under the brand name. They can exploit their business under their own name. An example of a distributor would be a car dealer. They buy vehicles from the manufacturer and sell them under their own name.

Retail

A retail model is essentially a company that buys goods from a certain distributor and sells them in its retail location. Retailers were once the most common place to buy products. With technological advances and online shopping, consumers purchase many products directly from the manufacturer. This cuts the Middle Man and saves money.

Bricks and clicks

A model of bricks and clicks is the most recent business model. This is a model in which stores take control by phone and allow customers to enter the store to pick up their goods or send it directly to their home. It combines a traditional brick and mortar shop and an online store in one. This offers a lot of convenience to buyers.

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