Choosing the right business model can decide the success or failure of your business. A strong model helps you identify how you create value, who you serve, and how you generate profit.
Whether you’re building a startup or scaling a brand, understanding the different types of business models will help you make smarter business decisions.
Below is a comprehensive guide to the most popular business model types along with real-world examples.
Revenue-Focused Business Models
These models focus on how the company generates recurring or primary revenue.
1. Subscription Model
- Specification: Customers pay a recurring fee (monthly/yearly) for access.
- Example: Netflix, Spotify, Amazon Prime
2. Freemium Model
- Specification: Basic services are free, but premium features cost money.
- Example: Canva, Dropbox, LinkedIn
3. Ad-Based Model
- Specification: Revenue from displaying ads to users/viewers.
- Example: Google, Facebook, YouTube
4. Licensing Model
- Specification: Sell rights to use intellectual property (software, brand, etc.).
- Example: Microsoft, Dolby Labs
5. Affiliate Model
- Specification: Earn commission by promoting others’ products/services.
- Example: Bloggers, Influencers, Amazon Associates
6. Brokerage Model
- Specification: Charge fee/commission for connecting buyers and sellers.
- Example: Zerodha, Angel Broking, Airbnb
Core Transactional Business Models
| Business Model | Specification | Live Example |
| B2B (Business to Business) | One business sells products/services to another business. | Salesforce, Shopify |
| B2C (Business to Consumer) | Business sells directly to consumers. | Amazon, Flipkart, Netflix |
| C2C (Consumer to Consumer) | Consumers sell to other consumers. | OLX, eBay, Facebook Marketplace |
| C2B (Consumer to Business) | Individuals offer products/services to businesses. | Upwork, Fiverr |
| D2C (Direct to Consumer) | Manufacturer sells directly to consumers without intermediaries. | Mamaearth, boAt, Lenskart |
Type of Business Models
1. B2B (Business-to-Business) Model
A B2B model involves selling products or services directly to other businesses.
Examples: Salesforce, Shopify
Keywords to rank for: B2B business model, B2B examples
2. B2C (Business-to-Consumer) Model
The B2C model focuses on selling to everyday consumers.
Examples: Amazon, Netflix
Keywords: B2C model, consumer-based business model
3. C2C (Consumer-to-Consumer) Model
In a C2C model, consumers sell to other consumers, usually through an online platform.
Examples: eBay, OLX, Facebook Marketplace
Keywords: peer-to-peer business model, C2C examples
4. C2B (Consumer-to-Business) Model
Consumers offer services or products to businesses.
Examples: Fiverr, Upwork
Keywords: C2B model, freelancer platforms
5. D2C (Direct-to-Consumer) Model
Manufacturers sell directly to customers with no middlemen.
Examples: Lenskart, boAt, Mamaearth
Keywords: D2C business model, direct-to-consumer brands
6. Subscription Model
Customers pay a recurring monthly or yearly fee for continued access.
Examples: Netflix, Spotify, Amazon Prime
Keywords: subscription revenue model, recurring revenue model
7. Freemium Model
Businesses offer free basic services and charge for premium features.
Examples: Canva, Dropbox, LinkedIn
Keywords: freemium model, SaaS business models
8. Marketplace Model
A platform that connects buyers and sellers and earns commission per transaction.
Examples: Amazon, Meesho, Uber
Keywords: marketplace business model, platform business model
9. Aggregator Model
The company collects services from different providers under one brand.
Examples: Zomato, Ola, MakeMyTrip
Keywords: aggregator model, on-demand platforms
10. Retail Model
Retailers buy in bulk and sell in smaller quantities to consumers.
Examples: Walmart, Big Bazaar
Keywords: retail business model, brick-and-mortar model
11. Franchise Model
Businesses license their brand and operations to franchise owners.
Examples: Domino’s, McDonald’s
Keywords: franchise model, franchise examples
12. Manufacturing Model
Companies produce goods and sell them to wholesalers or directly to consumers.
Examples: Tata Motors, Samsung
Keywords: manufacturing business model
13. Dropshipping Model
Sellers list products online, but suppliers ship directly to customers.
Examples: Shopify dropshipping stores
Keywords: dropshipping business model, low-investment business
14. Ad-Based Model
Platforms earn money by displaying ads to users.
Examples: Facebook, Google, YouTube
Keywords: ad-based revenue model, digital advertising model
15. Licensing Model
Companies earn revenue by licensing their intellectual property.
Examples: Microsoft, Dolby
Keywords: licensing business model, IP licensing
16. Razor and Blade Model
Sell a core product at a low price and earn through consumables or accessories.
Examples: Gillette, HP printers
Keywords: razor and blade model, consumable-based business
17. Affiliate Model
Earn commissions for promoting other companies’ products.
Examples: Bloggers, influencers, Amazon Associates
Keywords: affiliate marketing model, commission-based model
18. Brokerage Model
A business earns commissions by connecting buyers and sellers.
Examples: Zerodha, Angel Broking, Airbnb
Keywords: brokerage business model, commission-based revenue
19. On-Demand Model
Customers receive goods or services instantly when they request them.
Examples: Swiggy, Uber, Zepto
Keywords: on-demand business model, instant delivery model
20. Hybrid Model
A combination of two or more models to maximize revenue streams.
Examples: Amazon (B2C + Marketplace + Subscription)
Keywords: hybrid business model, multi-revenue business model
| Business Model | Specification | Example |
| B2B (Business to Business) | One business sells products/services to another business | Combination of two or more business models |
| B2C (Business to Consumer) | Business sells directly to consumers | Amazon, Netflix |
| C2C (Consumer to Consumer) | Consumers sell to other consumers | OLX, eBay |
| C2B (Consumer to Business) | Individuals offer products/services to businesses | Upwork, Fiverr |
| D2C (Direct to Consumer) | Manufacturer sells directly to consumers without intermediaries | Mamaearth, boAt, Lenskart |
| Subscription Model | Customers pay a recurring fee for access | Netflix, Spotify, Amazon Prime |
| Premium Model | Basic services are free; premium features cost money | Canva, Dropbox, LinkedIn |
| Marketplace Model | Platform connects buyers and sellers, earns commission | Amazon, Meesho, Uber |
| Aggregator Model | Platform offers services from various providers under one brand | Zomato, Ola, MakeMyTrip |
| Retail Model | Buying from wholesalers and selling to consumers | Walmart, Big Bazaar |
| Franchise Model | Licensing brand and operations to third-party operators | McDonald’s, Domino’s |
| Manufacturing Model | Producing goods and selling to wholesalers/retailers/consumers | Tata Motors, Samsung |
| Dropshipping Model | Seller takes orders; supplier ships directly to customers | Shopify dropship stores |
| Ad-Based Model | Revenue from displaying ads to users/viewers | Google, Facebook, YouTube |
| Licensing Model | Sell rights to use intellectual property | Microsoft, Dolby Labs |
| Razor and Blade Model | Sell a core product cheaply, profit from consumables | Gillette, HP Printers |
| Affiliate Model | Earn commission by promoting others’ products | Influencers, Bloggers |
| Brokerage Model | Charge commission for connecting buyers and sellers | Zerodha, Airbnb |
| On-Demand Model | Instant goods/services on customer request | Swiggy, Uber, Zepto |
| Hybrid Model | Combination of two or more business models | Amazon |
How to Choose the Right Business Model for Your Startup
Before finalizing your model, ask:
✔ Who is your target audience?
(Businesses, consumers, or both?)
✔ What value are you offering?
(Convenience, affordability, uniqueness?)
✔ How will you generate revenue?
(Subscriptions, ads, commissions, sales?)
✔ What are your startup resources?
(Time, budget, technology?)
✔ Can the model scale easily?
(Does revenue grow without huge costs?)
Choosing a model that aligns with your product, audience, and long-term goals is critical for growth.
Conclusion
There are many business model types, and the best companies often mix several models to stay competitive. Whether you’re building a new startup or optimizing an existing company, choosing the right model can give you a major strategic advantage.
FAQs
What is a business model?
A business model describes how a company creates value, delivers value to customers, and earns revenue. It explains who you serve, what you offer, and how your business makes money.
Why is choosing the right business model important?
The right business model ensures scalability, profitability, and sustainability. It helps you understand your revenue streams, customer segments, and cost structure—making it easier to grow your business effectively.
What are the most common types of business models?
Some popular business models include B2B, B2C, Subscription, Freemium, Marketplace, Dropshipping, Franchise, Affiliate, Ad-based, and Hybrid models.
Which business model is best for startups?
Startups often prefer models like subscription, freemium, marketplace, or D2C because they allow quick scaling, low setup costs, and predictable revenue.
What is the difference between B2B and B2C?
B2B sells to businesses (example: Salesforce)
B2C sells to individual consumers (example: Amazon)
The buying cycle in B2B is typically longer and involves multiple decision-makers, while B2C focuses on faster, emotional purchasing decisions.
What is a hybrid business model?
A hybrid model combines two or more business models to diversify revenue.
Example: Amazon uses B2C + Marketplace + Subscription (Prime).
What is dropshipping?
Dropshipping allows a seller to list products without holding inventory. Suppliers ship items directly to customers after an order is placed.
How can I choose the right business model for my business?
Consider your:
✔ Target audience
✔ Value proposition
✔ Revenue sources
✔ Market demand
✔ Costs and resources
✔ Scalability
The best business model aligns with your strengths and customer needs.
Can I combine multiple business models?
Yes! Many successful companies use hybrid or multi-model approaches to increase revenue, improve customer experience, and reduce risk.
