The digital age has led to the rise of myriad startups, all devoted to finding sound business models to address or relieve particular “consumer pains.” Alternative business models offer solutions that existing industry players have ignored or at least worked on extensively. Of course, the idea is to generate profit: to balance the amount of investment and costing needed with what customers are willing to pay.
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One possible model that may sound risky at first glance is to offer products at low prices in the beginning . Profit can wait; what’s more important here is to gain a share of the industry. For this to succeed, a startup should target a big chunk of the market and never compromise service and delivery speeds. The best success story based on this model is Amazon’s.
Another viable approach is franchising . For example, you can aim for a popular brand from a company that’s not available in your location yet. Researching the target market is important here, whether it’s huge as for a fast food chain or a niche one for, say, a fashion product. Before fully committing, and assuming the franchise cost is high, you will want to look for other entrepreneurs with the same vision to partner with.
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Lastly, consider having a reverse auction. This works by having buyers state the price they are willing to pay for a service. The idea here is once the selling company accepts the price, the buyer will have to commit to the terms of the seller. Priceline has been very successful in using this model for its burgeoning travel and rental business, as it gives customers a winning feeling, of always getting more than they paid for.
Entrepreneur Edgar Gonzalez always dreamed of becoming a businessman. Though unable to finish his Business Administration degree, he worked on various jobs before attending Fullerton College and taking paralegal classes. Together with his first wife, he opened Ayuda Legal Latina to help the Hispanic community. For more tips and insights on business, go to this page
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