Creating an online business is not as easy as you think.

There is so much information online these days that it’s difficult to know where to start.

I recommend understanding your strength’s before choosing an online business model.

If you are having trouble on which direction to creating an online business, then hopefully this guide will help you get started.

Find Your Niche

Before we begin, you need to find a niche that you’re either interested in or passionate about.

Pursue a niche that has a problem but doesn’t have a lot of resources available for people to refer to online.

This makes it an under-served niche.

Maybe you have an interest in composting, but you find that there are not too many websites that offer advice on how to design your own compost bin.

This would be an example of under-served niche that you could choose.

The above was an example only, you will need to conduct some research on Google Trends to determine the demand for that topic overtime.

Niche research google trends

It also helps to conduct some keyword research to validate the search volume potential before you start creating content on the topic.

You can use the keyword planner in Google Ads to determine the search volume below:

Google keyword planner tool

Once you found your niche with decent search volume, it’s time to decide on an online business model.

Online Business Models

There are so many ways to make money online, the problem is choosing a business model that suit’s your lifestyle.

Here are two online business models to choose from, the pros and cons and who it’s good for.


Online stores are popping up everywhere these days, they can be easily built on WordPress’s woo- commerce or through Shopify.

The difference to running a retail store is that you set up an online shop with products and goods to be transacted online via a merchant gateway.

Ecommerce business model


  • Buy products cheap and sell them at a profit without rent overheads.
  • Access to a larger market ie you can sell to customers all over the country and around the world
  • Gain valuable customer insights through analytics and tracking which allows you to identify profitable keywords to write content on
  • Lower overhead costs like minimal staff, rent, electricity that would otherwise be high if you had a physical store
  • You have more opportunities to sell through video, reviews, customer testimonials which all help increase sales and conversions.


  • Lack of personal touch especially when you sell clothing items as some consumers value the personal touch when they visit a physical store.
  • People have more opportunities to shop on price and product comparison online.
  • Credit card fraud is a growing problem which an lead to charge backs and loss of revenue
  • You have to manage stock and inventory through freight and find a warehouse to store it
  • It’s not great when you’re not technically savvy as it requires many moving parts like designing the online shop, connecting to payment gateways, taking aesthetic photos, making videos and uploading it.
  • Low profit margins around 15% after expenses and taxes.

Who it’s good for:

  • Great for people who already have experience running a retail store
  • Has supply chains in place to source products from manufacturers with wholesale pricing.

Affiliate Marketing

Around 84% of businesses are turning to affiliate marketing to get new opportunities to driving revenue to their website.

Affiliate marketing is when you promote other people’s products and earn a commission when a person ends up buying through your link.

When a user clicks on your referral link, it’s tracked via a cookie and you earn money online through a percentage of the product’s revenue.

affilate marketing business model


  • It’s a billion dollar business and you can promote products in a variety of niches.
  • High profit margins – if you promote digital products, you could earn up to 70% commission. Physical products can earn you 4 – 25% affiliate commission depending on the merchant.
  • It’s a low cost business model, all you need to do is create an affiliate marketing website and find an attractive product to promote.
  • You don’t need to be a marketing expert to become an affiliate. You can learn along the way and test various products and campaigns.
  • You could literally work anywhere in the world and not have to meet people face to face.
  • If you love writing, it could be something as simple as creating a review on a blog post with your affiliate link.
  • It’s passive money, you could literally earn money while you sleep.
  • You can work on your own schedule because you get to work from home. So if something unexpected comes up, you can always make time for it.
  • You can build an affiliate marketing website in a certain niche and if it receives steady traffic and revenue, you could sell the website for a profit later down the track.


  • It’s performance based so unlike working at a job where you work 8 hours per day, you make money only when someone buys online.
  • You need to know how to drive traffic, you can do this via Search Engine Optimization (SEO) or via paid traffic.

Who it’s good for:

  • Great for people who value location independence or want to work from home.
  • People who want a low risk business model with minimal capital outlay.

If you’re new to starting a business online, a resource worth mentioning is Aimee Vo’s website as she teaches you how to drive traffic to your website.

These are the two main online business models to explore when starting a business online.

However I recommend starting with affiliate marketing first so that you can learn the core skills without too much technical knowledge.