7 Profitable E-Commerce Models for the Online Entrepreneur

10/26/2011 04:15 pm ET | Updated Dec 25, 2011

Over many generations, fortunes in the business world were made through buying and selling products in physical stores. Internet fortunes have been made buying and selling products online. While some Internet fortunes employed the traditional business model, many more (and bigger!) opportunities await the online entrepreneur.

Here are seven different ways to buy and sell products and services on the Internet and profit through e-commerce:

  1. Make your own product and sell it yourself.
  2. Make your own product, and find a third party to sell it and fulfill the orders.
  3. Make your own product, find a third party to sell it, and you fulfill the orders.
  4. Buy someone else's product, then sell it to the end-consumer.
  5. Buy someone else's product, then sell it to a reseller (third party) with a lower profit margin per product, so they can sell it for a profit.
  6. Sell someone else's product without buying it, collect the money, then have the product manufacturer manage the fulfillment.
  7. Sell someone else's product without buying it, then let the manufacturer handle collection and fulfillment. In this model, you typically collect a commission for the sale that is less than you would make with the other six options above. However, you benefit by not having to purchase or store inventory, or maintain staff to manage fulfillment (stay tuned to a future blog for more on this exciting business model).

For any product, there are four areas that require effort: making the product, selling it, collecting the money and fulfilling the orders. You can handle any or all of these activities yourself, or you can outsource them (I like to make certain my firms oversee the money portion in any option we choose). Depending on the product and how you "delegate" these four activities, you can make a substantial income with minimal effort. Remember: you will have a competitive edge in business (and in life) when you play up your strengths and hire or outsource your weaknesses!