What is an Internet Business?

Let’s take a look at the very concept of an “internet business” to define the term right away:

The typical “internet business” is a company or organization that generates regular profit from sales made exclusively online. Some business components may exist in the “offline” world, but the sole medium for sales processing and customer contact is the Internet.

For a specific look at various types of internet business models – that is, different ways of using the internet to create a revenue stream or to maximize and enhance existing revenue streams – check out “The Top 4 Internet Business Models.”

The idea of an “internet business” is appealing because of the potential for automation and mobility. Without a need for a brick-and-mortar store or a standing warehouse, you can travel anywhere with the business on a laptop, or decide tomorrow that you’d like to move, never once worrying about the impact on your business plan.

So what are the essential elements of an internet business?

Well, like any other business, first you’ve got to have a product or service to sell.

Then, you’ve got to have an effective marketing and promotion plan for your product or service.

And, finally, you need a product delivery mechanism – i.e. shipping the product or providing the service.

To be true to the definition of an “internet business,” you must fulfill all three of these basic business processes via the internet. Your product or service must be presentable via a website. Your marketing and advertising methods must effectively deliver customers to the website. And your product or service fulfillment must be initiated and tracked online.

Some internet businesses can function with an entirely digital infrastructure: websites that feature the product, online advertising that instantly delivers customers to the websites, and even a digital product that can be accessed or downloaded immediately. Classic examples here include digital information products, membership sites, and some affiliate marketing methods.

Most internet businesses will require at least some offline mechanisms: offline advertising, physical inventory storage space, traditional shipping methods, customer service call centers, etc.

As I’m sure you’ve already guessed, it is truly impossible to build an entirely digital internet business, as at least some elements will always be handled offline. The internet is, after all, a manifestation of the offline world. (I know some people like to pretend otherwise.)

Still, with the current state of and constant progress in the world of technology, a primarily digital business is possible and comes with a handful of great advantages:

  • Automation creates less or zero need for permanent employees
  • Online marketing allows for more focused measuring and testing
  • Digital delivery can greatly reduce shipping and fulfillment costs
  • Email communication streamlines customer service requests

Any one or combination of these can lead to reduced overhead and increased profit margins – important attributes of any solid business model!

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