Business Model Examples: 22 Proven Ways Companies Grow

It feels simple: Business model = how you make money.

While it is simple for most, conventional business ideas and models, confusion creeps in when you have one business idea and multiple business models to choose from.

Think you plan to start a food delivery business, what model would you choose? marketplace (DoorDash), subscription (Meal kits), or direct sales model (local restaurant delivery).

Confusing, isn’t it?

Don’t worry, I’ve curated a detailed list of potential business models, categorizing them by preferred industries and business types.

By the end, you’ll know what model suits your business idea and what to expect going forward:

Direct sales is exactly what it sounds like—you sell your product straight to the customer, no middlemen involved. You set the price, control the brand story, and get direct feedback from the people actually using your product.

Without distributors or retailers, the company carries the full weight of marketing, customer acquisition, and support. It’s a model that works especially well in consumer goods, fashion, and electronics.

Direct sales business model examples

• Warby Parker generates revenue by selling eyewear directly to customers, thereby avoiding retail markups and maintaining control over margins.
• Dell profits from direct-to-customer computer sales by cutting out retailer commissions.

2) Brick-and-mortar retail

Brick-and-mortar retail means selling through physical stores where customers walk in, browse, and buy on the spot. It’s the model behind supermarkets, clothing chains, and local shops. People can see, touch, and try products before committing, and they get the instant satisfaction of taking their purchase home right away.

That experience still matters a lot in groceries, fashion, and essentials, even with e-commerce booming. But running physical stores comes with heavy costs of rent, staff, inventory, and operations, all stacking up quickly.

Brick and mortar retail business model examples

• Walmart drives revenue through high-volume sales of essentials at low prices, supported by massive supply chain efficiency.
• Target earns from curated product sales, private label brands, and differentiated in-store shopping experiences.

3) E-Commerce

In the e-commerce model, a company conducts and monetizes commercial transactions online. It outlines who is buying, who is selling, and the direction of value exchange (for example, B2C, B2B, C2C, or C2B). Lower overhead and built-in scalability make it ideal for startups that want to test markets without massive upfront costs.

E-commerce business model examples

• Amazon makes money from product sales, third-party seller fees, Prime subscriptions, and logistics services.
• Shopify-based stores profit by selling niche products directly online, often with low overhead and high customer loyalty.

4) Marketplace/Platform

In marketplaces, you set up the platform, connect both sides, and earn from commissions or fees. Once buyers and sellers start showing up, each group attracts more of the other, and the cycle builds momentum.

You’ll be running the ecosystem with this business model. Of course, the first question founders ask is: “How do I get that flywheel started?” But the hardest part is convincing early users to trust your platform before it’s proven.

Marketplace/platform business model examples

• Etsy earns by taking transaction fees and commissions from sellers of handmade and creative goods.
• eBay generates revenue through listing fees, commissions, and advertising on its auction platform.

5) Franchise

The franchise model is the closest thing to buying a “ready-made” business. You pay to use an established brand’s name, follow its systems, and plug into its supply chain.

This model is a good fit for fast food, gyms, retail, salons, and hospitality, where customers value consistency above all else. However, franchisees don’t get to experiment much. The menu, store design, and even uniforms are usually non-negotiable.

Franchise business model examples

• McDonald’s makes money through franchise fees, royalties, and consistent global sales of food and beverages.
• Subway generates revenue by franchising its brand, collecting fees, and sharing profits from standardized menu sales.

Subscription & usage models

A subscription and usage model focuses on selling access rather than one-time ownership. Instead of paying once and walking away, customers commit to ongoing payments (monthly, annually, or only when they actually use the service).

So, if you’re asking yourself, “Would people actually pay me every month, or only when they need me?”—that’s the deciding factor. Some products shine on a subscription, others make more sense as pay-per-use.

6) Subscription

A subscription model charges customers a recurring fee for ongoing access to your product or service. For businesses, the beauty of this setup is predictable cash flow and a higher lifetime value per customer. For customers, it’s convenience.

The real test is: Do they still feel it’s worth it six months later? That’s why companies running this model always keep adding features, refreshing content, or finding new ways to keep customers hooked. SaaS tools, streaming platforms, gyms, and even subscription boxes all thrive here. 

Subscription business model examples

• Netflix earns recurring revenue from subscription fees for unlimited streaming.
• Adobe Creative Cloud shifted to monthly subscriptions, replacing one-time software licenses.

7) Freemium

Freemium works on a simple promise: “Here’s the product for free…and if you want the good stuff, you’ll pay.” The free version removes barriers, gets people using the product fast, and creates a habit. Once users depend on it, the premium tier feels like the natural next step.

But only a fraction of free users will ever convert. The question you need to ask is: Are the few who upgrade valuable enough to cover the many who won’t? That’s why the free tier has to be carefully designed.

This model works best in digital apps, SaaS products, and productivity tools where frequent use builds a habit.

Freemium business model examples

• Spotify monetizes free users with ads and upsells premium subscriptions for ad-free listening.
• Zoom offers free basic meetings but drives revenue from paid upgrades with advanced features.

8) Pay-Per-Use/On-Demand

In this model, instead of locking customers into monthly bills, you charge them only when they actually use your product or service. For users, that feels fair (no long-term commitment, no wasted money if they don’t use it often). For businesses, their growth comes from making people use the service more frequently.

The obvious question here is, “Doesn’t that make revenue unpredictable?” Yes, it can. That’s why companies in this space lean heavily on convenience and habit-forming design.

Niche pay-per-use/On-demand business model examples

• Uber profits by taking a commission on every ride booked through its platform.
• Zipcar generates income through membership fees and hourly or daily car rental charges.

9) Licensing

Licensing is all about turning ideas into income. Instead of building and selling a product yourself, you let other companies pay for the right to use your intellectual property, whether that’s software, technology, patents, or creative content.

For the licensor, it’s attractive because margins are high and scaling doesn’t require factories or massive distribution networks. However, licensing only works if your IP is protected and in demand.

Licensing business model examples

• Microsoft Windows generates revenue by licensing its operating system to PC manufacturers worldwide.
• Disney generates billions by licensing its characters, movies, and brands to toy makers, apparel companies, and theme park operators.

Service & consulting models

Service and consulting models don’t sell products; they sell brains and time. That could be strategy advice, accounting help, IT outsourcing, or even renting out a part-time CFO.

10) Consulting/Agency

Consulting is a model where businesses sell specialized expertise that clients lack in-house—whether in strategy, marketing, design, or technology. Revenue usually comes from hourly billing, project fees, or retainers, but growth is limited by utilization rates and the availability of skilled consultants.

Companies hire consultants for advice. But at some point, you’ll hit the wall of “too many clients, not enough hours.” Growing beyond that means building teams of specialists or productizing some of your services. This model works best for professional services, strategy, and specialized industries.

Consulting business model examples

• Deloitte earns from management consulting, auditing, and advisory services billed by project or retainer.
• Accenture generates revenue by delivering technology, consulting, and outsourcing solutions at a global scale.

11) Outsourcing/BPO

Outsourcing, also called BPO (Business Process Outsourcing), is basically handing off parts of your business to a specialist. Instead of building an in-house team for customer support, IT, payroll, or back-office tasks, you contract it out to providers in lower-cost markets.

Outsourcing works beautifully for repeatable processes, but it requires strict quality checks and clear processes. If you’re sloppy with oversight, costs can creep back in, or service quality can suffer. This model is best for corporations looking to cut costs or scale operations efficiently.

Outsourcing business models examples

• Infosys profits by providing outsourced IT services, consulting, and digital transformation projects.
• TCS earns from IT outsourcing, software development, and business process management for multinational clients.

12) Fractional/Time-based services

Fractional services let businesses hire senior talent—like a CFO, CMO, or assistant—on a part-time or on-demand basis. This gives access to strategic insight or operational support at a fraction of the cost and without the commitment of a full-time salary.

This model is especially appealing to startups and small businesses that think, “We need senior-level expertise, but we can’t afford it full-time yet.” On the provider’s side, it’s scalable too; one expert can serve multiple companies instead of being tied to one.

Fractional/time-based services business model examples

• Paro’s fractional CFO network matches startups with fractional CFOs and takes a cut of contract fees.
• Belay provides virtual assistants and other remote talent, generating revenue from long-term client contracts.

Digital & platform models

Digital and platform models aren’t about selling one product; they’re about building the stage where everyone else interacts. Whether it’s search engines, social media, or marketplaces, the value comes from connecting users and keeping them engaged. The bigger the network, the stronger the model.

Of course, scale brings headaches like moderation, ad fatigue, and trust issues, all of which pile up quickly. But once the users are there, monetization can flow from ads, data insights, or premium upgrades layered on top of free access.

13) Advertising-based

The mechanics of this model are simple: Users get access without paying, and the company makes money by selling advertisers access to that audience. The larger and more engaged the user base, the more valuable the platform becomes.

But here’s the question I often get: “If ads pay the bills, why do some platforms still struggle?” The challenge is balance. The most successful platforms carefully tune the experience so ads feel like part of the ecosystem.

This model works best for search engines, media outlets, and social platforms where scale and attention matter.

Advertising business model examples

• Google makes billions from pay-per-click search ads.
• Facebook monetizes its massive user base through targeted digital advertising.

14) Affiliate

Affiliate marketing involves promoting someone else’s product through a blog, YouTube channel, podcast, or social feed. And when your audience buys using your link, you earn a commission.

Now, you might be wondering: “If it’s that easy, why isn’t everyone rich off affiliate links?” The catch is trust. People only click and buy if they believe your recommendation. Hence, this model is best suited for bloggers, influencers, and niche content creators.

Affiliate business model examples

• Amazon Associates earns by increasing product sales on Amazon, while affiliates get a small commission from each purchase made through their referral links.
• ShareASale earns revenue by charging merchants setup and monthly fees, plus taking a cut of each affiliate commission transaction.

15) Data monetization

In this model, instead of selling a product directly, companies collect data on consumer behavior, credit history, or market trends and package it into insights that other businesses are willing to pay for.

“If it’s that lucrative, why don’t all companies do it?” The short answer is privacy. Mishandling data or being too aggressive can backfire, damaging trust and even inviting legal trouble.

That’s why this model demands strong analytics capabilities and just as strong governance around how data is collected, stored, and shared. Thus, it’s a natural fit for research firms, fintech, and analytics companies.

Data monetization business model examples

• Nielsen sells consumer and media research insights to businesses.
• Experian profits by selling credit reports and scores to lenders and businesses.

16) Crowdsourcing

Crowdsourcing is about asking the crowd to chip in (whether with money, ideas, or even labor) instead of relying on one big backer. For startups, it’s a way to validate ideas fast: If people are willing to fund or contribute before the product is even built, you know you’re onto something.

You might think: “Doesn’t this only work for cool gadgets and passion projects?” Not really. While creative projects dominate, nonprofits, entrepreneurs, and even social campaigns have used crowdsourcing to prove demand and rally communities.

Crowdsourcing business model examples

• Kickstarter takes a percentage fee from successfully funded creative projects.
• GoFundMe generates revenue by collecting transaction fees on donations.

Manufacturing & production models

Manufacturing and production models are all about building things at scale. It could be components, finished goods, or custom products. The focus here is on how efficiently you can produce it, control costs, and meet quality standards consistently.

Here are some models that belong to this category:

17) OEM (Original Equipment Manufacturer)

OEMs are the behind-the-scenes giants of the business world. They don’t sell directly to you or me—instead, they manufacture parts or even entire products that other companies rebrand and sell.

The value here is efficiency and scale. Big brands rely on OEMs to deliver quality at volume, often under tight deadlines and strict specifications. So this model is best suited for large-scale manufacturers that can supply global brands consistently.

OEM business model examples

• Foxconn earns revenue by acting as an OEM, assembling Apple devices and other electronics at a massive scale for global brands.
• Intel profits as an OEM by manufacturing and selling processors to PC makers like Dell and HP, earning through component sales rather than consumer branding.

18) Dropshipping

Dropshipping is the e-commerce shortcut. You sell products online, but the storage, packing, and shipping are all handled by a third-party supplier. You don’t touch inventory, which makes it a low-risk, low-investment way to test online business ideas. That makes this model ideal for new e-commerce entrepreneurs.

The question that usually comes up is: “If it’s so easy to start, why isn’t everyone successful?” The catch is margins. Because suppliers handle fulfillment, your cut is often thin.

Dropshipping business model examples

• Shopify + Oberlo sellers profit by selling products online without holding inventory, while Oberlo earned from app subscriptions and transaction fees before its shutdown.
• AliExpress generates revenue by supplying products to dropshippers worldwide, earning through wholesale margins and seller fees on its marketplace.

19) Make-to-Order/Custom

Make-to-order, unlike the traditional production model, lets you only manufacture once a customer places an order. That means less money tied up in inventory and more room for personalization.

Customers love products made “just for them.” But custom items often take longer to produce, which can limit scalability if demand suddenly spikes. That’s why this model tends to shine in luxury, niche, or artisan markets where uniqueness takes precedence over instant delivery.

Make-to-order business model examples

• Nike’s “Nike By You” profits from custom, made-to-order sneakers.
• OKA earns by producing tailored furniture on demand.

Hybrid & social impact models

Hybrid and social impact models sit at the crossroads of business and mission. They go beyond “make money first, give back later” by designing impact into the way the company earns revenue.

That could mean combining nonprofit funding with earned income, layering ad revenue on top of free services, or tying every sale directly to a cause.

Here are a few models that belong to this category:

20) Social Enterprise (Hybrid)

A social enterprise is a business with a double bottom line: Profit and purpose. A common version is the buy-one-give-one model—sell one product, donate one to someone in need.

Customers love the idea of doing good with their spending, but if the business can’t stay profitable, the mission collapses. But if the mission feels like just marketing fluff, consumers call it out quickly. So this model is best for mission-driven brands targeting conscious consumers.

Social enterprise business model examples

• TOMS Shoes monetizes footwear sales with its buy-one-give-one model.
• Patagonia earns from outdoor gear while embedding sustainability into its core operations.

21) Nonprofit + Earned Revenue

Many nonprofits adopt revenue streams (like ticket sales, memberships, workshops, or merchandise) to keep operations sustainable. The goal is to create a steady flow of income that reduces dependency on donors and grants.

The question leaders often wrestle with is: “How do we earn money without losing sight of our mission?” The answer is alignment. The best examples are those that earn revenue in ways that directly support or extend their cause. This model is best for museums, NGOs, and nonprofits seeking stability.

Nonprofit earned revenue models that sustain missions

• Goodwill funds job programs by selling donated goods in thrift stores.
• Old Skool Café sustains youth training programs with restaurant revenue.

22) Freemium + Advertising

Freemium + advertising is the middle ground between free access and paid upgrades. The platform gives everyone a free version, shows ads to monetize that audience, and then offers a paid tier for people who want an ad-free or feature-rich experience.

“Why not just stick with ads or subscriptions alone?” The answer is reach. Ads let you scale to millions of free users, while premium subscriptions capture those willing to pay more. It’s a way to serve both groups without alienating either.

This model is best for social media and content platforms that need scale but also want recurring revenue.

Freemium plus advertising business model examples

• YouTube monetizes free users with ads and upsells YouTube Premium subscriptions.
• LinkedIn earns through ads, premium memberships, and recruiter tools.

How should you choose a business model for your product/service?

The right choice of a business model depends on your product, customers, resources, and how you plan to scale. Here’s how I break it down when I’m working through the same question with clients.

1) How will your customers want to pay?

If I launch a fitness app, do users expect a $10 subscription or a pay-per-class setup? The same logic applies everywhere: SaaS leans toward subscription, ride-hailing thrives on pay-per-use, and many mobile apps succeed with freemium apps.

Spotify hooks users before nudging them to upgrade. Even a social enterprise might bake impact into each purchase. The model you choose should reflect how your audience already spends.

2) Can your resources actually support it?

A café screams brick-and-mortar retail, but that also means high rent and staffing. A fashion startup? E-commerce or dropshipping keeps overhead lean. Got strong IP? Licensing or franchising could let others do the heavy lifting.

And if you’re an expert yourself, maybe consulting or fractional services make sense. What I ask clients is simple: “Do your resources actually fit this model, or will you break yourself trying to keep up?”

3) Will it stand out in your market?

Copycat products rarely survive, which is why differentiation is so important, and your business model can be the lever. A subscription box adds recurring value, make-to-order enables personalization, and a niche marketplace connects a community others overlook.

Data monetization and crowdsourcing also stand out when competitors ignore them. The important question is, “Does your chosen model make you memorable?” Because if you don’t stand out, you’re not just another option; you’re invisible.

4) Will it grow with your business?

Consulting and agencies stop growing when your calendar fills. Outsourcing/BPO scales better, but you need process rigor. Platforms can explode overnight, but only if you survive the slow early days.

Subscription models bring predictable growth, but churn can kill you fast. Even nonprofits with earned revenue or hybrids like freemium+ads need to balance scale with sustainability. The real filter here is if you jump from 50 to 5,000 customers, does the model hold or does it collapse under pressure?

When you’re torn between options, a quick way to pressure-test them is by sketching each on a business model canvas. In one page, you’ll see how value, customers, revenue, and costs line up and whether the model holds together before you invest.

The bottom line

If there’s one takeaway here, it’s this: Your business model should evolve. What works at launch may need rethinking once you scale, hit new markets, or face new competitors.

The companies that thrive aren’t those with a “perfect” model from day one, but those willing to adapt theirs as opportunities shift.

And whichever model you choose, Upmetrics helps you turn it into a solid business plan. With tools for business model canvases, financial forecasting, investor-ready plan templates, and real-time collaboration, Upmetrics gives you the framework to move from idea to execution with confidence.