17 Business Model Examples

If you’re looking for ideas to create an innovative business model, look no further! This page has business model examples with a business model canvas designed. The business model describes how an organization creates, delivers, and captures value.

Business Model Examples

Check out 17 different business model types with examples of companies for further insights. Try to adopt these business models in your company or startup.

Multi-Sided Platform Model

The model implies a company provides service to both business parties. To get a better understanding, let’s look at an example – LinkedIn. The site offers a subscription service to candidates looking for employment and companies seeking new hires. Read More about the Multi-sided Platform Business Model.

Companies that use the Freemium Business Model:

• Uber
• Airbnb
• Amazon
• YouTube
• Facebook
• Alibaba
• PayPal
• Google
• Grubhub

Freemium Business Model

The model includes both free and paid services. Typically, a business lures new customers with a free subscription. However, it’s free only for a limited period or with a basic set of features. If customers want to unlock full capabilities, they must pay. The monetization option is ideal for encouraging users to try a product. Usually, freemium is implemented for SaaS or mobile app companies. Read More about the Freemium Business Model.

Companies that use the Freemium Business Model:

• Spotify
• Linkedin
• Skype
• Mailchimp
• Dropbox
• Evernote
• Slack
• Grammarly
• Zoom
• Canva
• Trello

Subscription Business Model

A business with a subscription business model provides consumers with certain services for a fixed monthly, quarterly, or annual fee. Usually, a company segments the market and makes several offers with different features and prices. These are referred to as tiered offerings. A vivid example is Netflix, with three monthly plans: Basic for $8.99, Standard for $12.99, and Premium for $15.99. The subscription-based business model is suitable for service-based or content websites. The ultimate challenge for a company is to offer valuable content that will make customers return to the vendor constantly. Read More about the Subscription Business Model

Companies that use the Subscription Business Model:

• Netflix
• Spotify
• Adobe
• Amazon with Amazon Prime
• Birchbox
• Dollar Shave Club
• Blue Apron
• Peloton
• Microsoft with Microsoft 365
• Patreon

Peer-to-Peer Business Model

Under a peer-to-peer (p2p) business model, a business serves as an intermediary between two parties. The intermediary takes a commission for driving value for both the demand and supply sides. For example, look at Airbnb: the service charges a commission when a host and hostee make a deal and carry out a transaction. Read More about the Peer-to-Peer Business Model

Companies that use the Peer-to-Peer (P2P):

• Airbnb
• Uber
• Etsy
• Upwork
• Couchsurfing
• Turo
• Poshmark
• Zopa

Razor and Blade Business Model

This model can also be referred to as a printer and cartridge business model. One product is marketed high, while another one – low. The thing is, an expensive product can’t be utilized without a cheap one. Hence, a business drives constant profit from associated inexpensive goods. For example, consumers will always keep buying ink if they have printers. Read More about the Razor and Blade Business Model

Companies that use the Razor and Blade Business Model:

• Gilette

Direct Sales Business Model

A direct sales business model takes place when a company adds a personal touch to a sales process. In other words, a sales representative is selling a product directly to an end-customer. It can be a one-on-one or group meeting. The method that Tupperware widely used is still popular, even though technological advancement promotes remote sales and self-service. Read More about the Direct Sales Business Model

Companies that use the Direct Sales Business Model:

• Amyway
• Avon
• Mary Kay

Aggregator Business Model

An aggregator business model is a network model. A business is an aggregator if it provides information about a specific service and sells it. Usually, the service is branded. Typically, a company specializes in a particular niche. Read More about the Aggregator Business Model

Companies that use the Aggregator Business Model:

• Amazon
• eBay

Wholesale Business Model

A traditional business model in the B2B segment, wholesale, is about the supply chain. Each party involved in the supply chain is a wholesale business. So, we can say those who sell raw materials to manufacturers or suppliers and distributors who then sell goods to retailers fall for a wholesale business model. Read More about the Wholesale Business Model.

Companies that use the Wholesale Business Model:

• Alibaba
• eBay

Long-Tail Business Model

If a company sells goods that generate little sales when marketed individually but there is a significant scope of sales when sold in total, it falls under the long-tail business model. This model appeared not long ago, with the rise of the internet. The internet allows consumers to shop for niche goods that used to be unattractive for retailers. Now, however, the situation changed as brands can use advanced targeting and segmentation to reach a specific audience. So, marketing niche products isn’t difficult anymore, which encouraged the development of a long-tail business model. Read More about the Long-Tail Business Model.

Companies that use the Long-Tail Business Model:

• Amazon
• Lulu.com

SaaS Business Model

Software as a service (SaaS) is a delivery business model implemented by tech companies that lease the software to customers via central, cloud-based systems. Typically, clients pay a subscription fee to get the license for centrally hosted software. Read More about the SaaS Business Model.

Companies that use the SaaS Business Model:

• HubSpot
• Asana
• Slack

Dropshipping business model

The dropshipping business model is, in short words, a store that doesn’t have stock. It purchases the products from a third-party supplier – commonly a wholesaler or a manufacturer – who ships them directly to the end consumer. So, there is no need for inventory, and the seller doesn’t have to handle the product. It is usually a good option for entrepreneurs, especially beginners, because there is no need to open a brick-and-mortar store, and that normally means smaller investments. So, the drop-shipper is essentially a middleman. It’s possible to build a sustainable business from a simple laptop. Read More about the Dropshipping Business Model.

Companies that use the Dropshipping business model:

• AliExpress
• Amazon

Low-Cost Business Model

In short words, the low cost business model is based on a strategy by which the business offers low prices in order to instigate demand thus, gaining market share. This business model can be adopted by virtually any company, but it is usually indicated in cases when there is no (or little) competitive advantage or when it is easier to achieve scale with production volumes, so they apply the strategy of cost advantage. Read More about the Low Cost Business Model.

Companies that use the Low-Cost Business Model:

• Walmart
• Zara
• Dollar General
• IKEA

Franchise Business Model

The franchise business model is usually the business model chosen by those who want to start a new business, but do not have much idea how to begin it. That is because the franchising system allows you to acquire a ready-made business, with a consolidated brand and know-how already tested. Virtually, you buy a brand and all the processes. That way, since you don’t have to start from scratch, there is no need to test the entire business model from the beginning. You basically invest in a ready-made business and apply its processes and techniques to the location you choose. On the other side, the business owner benefits from not having to invest in new outlets or units. Instead, they distribute their goods or services through licensed sales points, thus increasing their brand presence. Read More about the Franchise Business Model.

Companies that use the Franchise Business Model:

Crowdsourcing Business Model

As the name suggests, the crowdsourcing business model refers to when the crowd act as a source for the business – usually some multisided platform. There are many options of crowdsourcing, but all of them involve opening tasks of issues to a large group in order to receive their input for operation. The “crowd’ of this business model may be made up of customers, ordinary citizens, specialists, other entrepreneurs, and business owners/managers, etc. The company is going to employ their knowledge to benefit your business. For this knowledge to be acquired, the business must create solutions for the user to get interested in collaborating, and, at the same time, earn money as a business. Let’s go a little deeper. Read More about the Crowdsourcing Business Model.

Companies that use the Crowdsourcing Business Model:

• Airbnb
• Waze
• Duolingo

Blockchain Business Models

Since Satoshi Nakamoto published the article “Bitcoin: A Peer-to-Peer Electronic Cash System”, in 2008 (and released the open code one year later), blockchain technology seems to have gained life into businesses. More and more companies have started operating with blockchain in their business. There are successful examples of blockchain business models already in course, and innovation seems to evolve quicker and quicker. Read More about Blockchain Business Models.

Ghost Kitchen Business Model

Ghost kitchens are restaurants that use food delivery apps to render services to their customers without the use of dining halls and other features made available by conventional restaurants. It refers to the physical space where fast food service providers make food for off-premises (pick-up or delivery) services. They grant online orders to customers that require food delivery services. Read More About the Ghost Kitchen Business Model.

Productized Services Business Model

It is obvious to even the most casual observer that the service industry has seen significant growth in the last few decades. With this growth comes a wide range of innovations in various sectors, which have largely been responsible for the rapid development of the industry. One of these innovations is productized services. In this article, we’ll explore how the productized services business model works, its strengths and weaknesses, as well as the opportunities available to this form of business. Read More about the Productized Services Business Model.