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There are many different ways to make money on the Internet. Here is an overview of the five most popular online business models:

Sell Digital Products

The term "digital product" means that the product is delivered electronically. The customers will download the product to their computers. Some examples of digital products are downloadable e-books, audio/MP3, graphics (clipart and stock photography), video and software.

The digital product business model is very popular because there is no inventory, no shipping and no fulfillment cost. Since the product is an electronic file, it costs you nothing to make an extra copy - therefore, the profit margin is 100%!

Sell Physical Products

"Physical products" are the products that are shipped to customers through the mail. Customers place orders on your website and you ship the products to them.

There are several ways to get those products - you can make them yourself (for example, arts and crafts), buy them directly from a manufacturer or buy from a wholesaler (at quantity discounts).

If you don't want to deal with the inventory and shipping, another alternative is to use a dropshipping service. Dropshipping means that the inventory is stored at the wholesaler company. You collect the customer information and payment, give it to the dropshipping company and they ship the product to the customer. Your profit is the difference between what the customer paid you and what you paid to the dropshipper.

Become An Affiliate

Affiliates send visitors to other companies' websites and get paid a percentage of all the sales they refer. You don't have to worry about creating websites, dealing with customers, shipping and payment processing. Your only job is to advertise those websites and send people there. People will buy products from those websites and you will be paid your commission.

When you become an affiliate, you will be given a unique link with a tracking code. In your advertising, you will send people to that link. This unique code will ensure that all the sales will be properly credited to you.

Sell Advertising

If you have a website that gets a lot of visitors, you can sell advertising on it. Other companies will pay you for advertising space on your site, just like they pay to advertise in magazines and newspapers.

That's how all those "free websites" make money - they sell advertising. Free content attracts a lot of visitors. The higher is the number of people who visit the website, the more money you can make from advertising.

Provide Services

There are many types of services that can be done on the computer through the Internet. The most common examples of such services are website design, programming, graphic design, writing, data entry and transcription.

Many companies will gladly pay someone to do computer work for them on a project basis, so they don't have to hire full-time employees. As long as the work can be done without face-to-face interaction, you can do it from home on your computer and make money.