The 3 Internet Business Models Explained (With Inspiring Real-Life Examples)

the 3 internet business models in circles

Most of my career has been traditional, as a structural engineer, but my future is all neo. But to be honest, it’s only possible thanks to having the wonderful world of freelancers at my fingertips. 

At this point, this probably makes no sense to you, so let me dive deeper to help you understand more about the 3 internet business models that, as shown on the image above, can overlap.

But what’s in this article for you beyond an understanding of these 3 models?

Well, you might be at a crossroads in your career, tired of doing what you’ve always done to only get what you’ve already gotten. 

It’s time for growth, for expansion, for exploration, to see if you can carve yourself a new path in online business, in much the same way that I have over the last few years.

But with internet business models, how do you know which is the right one for you to pursue? 

What are the differences between them, and what are some key examples you need to know before tackling this venture yourself?

We’re here to help, so let’s dive right in!

The 3 Types of Internet Business Models

#1 Traditional Online Business Model

A traditional online business model is just that: traditional. You’re probably thinking, “of course,” but to elaborate, these internet business models are based on jobs that were around long before the internet. 

This model takes well-known positions that used to be done in-person before websites were invented and now offers them virtually. 

For instance, think about how accounting or marketing can be an online business instead of face-to-face.

The older generation would perfectly understand these traditional professions because they’re familiar with the concept of merchants, or a physical person who sells goods and services. 

A brokerage, or a professional company that assists in the buying/selling of businesses, would also apply to the traditional online business model. 

Now, just say: “these are available online, and sometimes you don’t even need to talk to a person” and watch humorously as the cogs in the Baby Boomers’ heads spin wildly out of control. 

old lady confused about the internet business models

Manufacturing, coaching, and consulting (e.g. an online therapist or accountant) can be categorized in this model as well.  

Traditional Online Business Model Examples

Our first example is Tutor.com, which is a popular source for students struggling in certain academic subjects looking for assistance outside of the classroom and during school hours.


This company hires professionals and graduates who can work around their schedule and be paid for that time dedicated to assisting students of all ages.

This gives the tutors flexibility while making a difference in the students’ education and no longer needing to meet at a specific location.

Additionally, financial services, including banks or credit card accounts, are available online with some of the biggest providers (i.e., Chase, U.S. Bank, Bank of America, Discover), offering their customers and clients the option to navigate their transfers by logging in to their mobile banking site. 

This saves time, is easy to sign up and access, and is available 24/7, so there’s no need to rush to the bank to take money out of your account when needed!  

Currently my bank and mortgage provider are both online only. No branches. No meetings. No signing physical documents. It’s all online!

Now that’s a transition into the world of internet business models that’s a great sign of the times.

#2 Neo-Online Business Model

These types of online business models were created and exist because of the internet. In other words, these internet business models wouldn’t exist if it weren’t for the internet.

Think of businesses such as:

blogBlogging, which is all about content creation surrounding a particular niche. By writing loads of helpful, value-added content you can draw people to your website. With website visitors you have a range of monetization options, such as online advertising, selling your products, gaining leads and selling them to a third party, and so on.

podcastPodcasting is another option for those who may be a bit more camera shy, but looking to entertain audibly by regaling stories with your friends, narrating fiction, or divulging personal experiences. 

ecommerceEcommerce, or selling physical or digital products through the internet worldwide or nationally, is another one of the new-age internet business models.

coursesCreating online courses, as well as affiliate marketing (an advertising model where a company reimburses a third-party publisher to generate traffic to the company’s product), are included too.

membershipA membership or subscription service, when individuals pay a recurring fee (whether that’s weekly or monthly) to access the organization’s information or tools, can be deemed as a neo-online business.

SaaSSaaS (software as a service) or creating apps can follow this model as well, where companies or individuals will pay to use an online platform or tool. For example, in my previous engineering consultancy, I used to pay for a design tool that was fully online.

I never downloaded anything or saved any files to my computer. It was all online, and any time I needed it I paid for 1 month’s usage and stopped paying when I didn’t need it.

chartAnother one of the internet business models that I love is one where you invest in websites that are already making money, then improve them by increasing the number of visitors to the site (traffic), and monetizing them in different ways.

Once you’re making more money through this improvement or by simply increasing the number of customers heading to your site, you could sell the website again. This process is known as website flipping

seoAlong those lines, being an SEO consultant is easier through this model too. Do you think the term ‘search engine optimization’ was used much 20 years ago? Haha, no.

An SEO’s expertise in website optimization can help your business soar by adding additional information and tweaking things to make your website rank higher and to a better-targeted audience, thus gaining profit. 

Since you might just be starting on this journey, being in a mastermind group could be helpful. You would meet with a few other people regularly online to exchange ideas and advice. This could give you diversity and the boost you need to make your company better in the long run.

mastermind group to help you find your place in the 3 internet business models

Especially if you’re working alone, having support and encouragement during this transitional phase of finding what you truly want to do with your life is essential.  

If you’re looking to establish an online business and maintain your individuality, a neo-online option gives you the most freedom. This is one of the best online business models because it opens up the most doors to venture into your interests and creativity.

Neo-Online Business Model Examples

Becoming a YouTuber has made more impact in recent years, with numerous people recognizing this as an actual career rather than a hobby. 

YouTube states that there are multiple ways of making money once partnering with them. These include advertisements, channel memberships, merchandise, and premium services. 

screenshot from ryans world youtube channel

Once a YouTuber gains a decent amount of subscribers, such as the well-known Ryan’s World channel above, and their videos reach millions of views, their salary per video increases, often into the thousands.

Online learning has rapidly grown through the COVID times, and while many classes are going back to offline, there’s greater demand for online courses than the pre-COVID times.

stefan james
Entrepreneurs like Stefan James above or Gina Horkey below create courses to help people make money online themselves in various ways such as publishing e-books or becoming a virtual assistant.

By using the skills you’ve developed in your life, mixed with some market research, you could create an online course and sell it to people all over the world who would love to know what you know.

gina horkey

Once your course is finalized, you can determine how you want to deliver each session, then sell it through an online course platform, where they will host it and distribute it.

If you also market what you’re offering beyond the online course platform, more people will log on, which means more money for you!

#3 Freelance Online Business Model

This past year, 59 million people were doing freelance work in the United States. Essentially, these jobs are where a person works for themselves or is self-employed. 

Freelancers could take on contract work from companies or organizations, yet they are responsible for setting their hours, managing their time on multiple projects, and billing clients. Freelancers can also be called “independent contractors.”

Freelancing has many benefits, such as having control over your workload, who you work with, and your income or pay rate. You can determine what jobs you do or do not want to do and choose whether to work full or part-time remotely. 

Nevertheless, some downsides could include paying for your health insurance, buying the equipment necessary for the job, and working too much or not enough. 

If you’re keen to start an online business by freelancing, you should ensure you have the discipline to stay on top of your assignments and organization to sort through all your upcoming tasks, alongside other qualities to ensure your success. 

As we note in our blog titled ‘What is Freelancing and What Jobs are Freelance?’, some of the most common fields for freelancing include:

Freelance sites are abundant, such as Upwork, Toptal, Fiverr, and People Per Hour just to name a few. These sources allow you to browse posted jobs in various businesses and try to win any that might pique your interest. 

Going through these sites ensures that the work you deliver is high quality and reputable because if it isn’t, you’ll get bad reviews and you won’t be freelancing on that platform for long.

Freelance Online Business Model Examples

Ghostwriting is a freelance option for English majors, teachers, or talented writers to do either as a side gig or pursue full-time. Despite not getting credit or a by-line for what you create, you’re able to be paid a decent wage per word and have a flexible schedule to work at your own pace. 

hotghost writer

Hot Ghost Writer is a platform that freelance writers can join to be paid to write fiction or non-fiction for time-poor self-publishers. 

As long as you deliver your assignments on time and meet the company or client’s requirements, you will receive new projects to work on regularly.

Being a copy editor, graphic designer, voice actor, and translator are all other variations of freelance work.

Depending on your skills, interests, education, and what is in demand in the current market, there most likely is a freelance option that would be right for you to start working for yourself instead of in someone else’s business.

freelancer freelancers

So, then, the much-anticipated question arises.

Which of the Internet Business Models is Right For You?

Whew, after tackling the previous section and taking a look at the successful online business models, I’m sure that was a lot for you to comprehend in a short amount of time. 

Ok, now let’s focus on what works for you. After all, you wouldn’t be here unless you’re thinking about leaving the typical workplace and starting an online business, right?

Considering the last three sections, it depends on you and your situation. Regardless of the circumstances driving you to work from home, your education and experience will mold what interests you and what you’re looking for as an ultimate goal.

Think about your previous job experiences and ask yourself these questions. 

Once you’re done reading this article, you can highlight what stood out to you. After tackling the former questions, you can then research the specific field that caught your attention. You could also reference some of these suggestions when looking for a new job:

Estimates say that 27 million Americans left the traditional workplace in favor of full-time self-employment in 2020. So if you’re considering making money online or starting an at-home business, you’re not alone!

Starting any one of these internet business models can be intimidating, and you may need some assistance when you’re in this beginning phase. Nonetheless, there are countless benefits when you’re able to work from home. 

happy online business owner

Your work and life balance are better, and you’ll be able to spend additional time doing what you enjoy with your family or friends. You won’t have to commute to work, which in turn will save money, and your stress level will decrease. 

You’ll also have the option to seek a community that values your work more, even if you’re not in the same state or country. Finally, you will have more motivation to work, and your performance will be stronger.

That’s definitely what I’ve found!


We hope you enjoyed the above article and found it beneficial, whether you’re just starting your new online business search or you’re up and running! 

Working from home gives you the chance to explore what you want to do with your time, and you get to make a salary while doing it. That’s win-win, and that’s why we Love Work at Home. 

If you found this article helpful, please be sure to share it with anyone you know who would also find it helpful on their journey to securing a position they’re happy with.

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