Any Web service/product that is offered to its customers for FREE
usually has one of the following
Business/Revenue model/strategy behind it
Freemium business model
There would be a basic version; which would have the basic features; of the product/service that will be for FREE. But in order to get access to the entire set of features, the customer will have to buy the same. A small variation can be that the customer provides his wallet/credit-card details at the time of buying a product/service for free - till the time the customer would use the product within a certain pre-defined limit the product would remain free and as soon as the customer exhausts his free limit and uses the product post that, he will be automatically be charged (many storage applications such as Dropbox fall under this).
Microtransaction business model
Mostly used in free-to-play games where customers can purchase virtual goods within the game via micropayments.
Donation business model
You ask for donations from your users. Wikipedia & Khan academy use this model.
Sponsorship business model
Some company would be willing to sponsor your product/service if they get benefited by it. One specific case where this model works is youtube review videos - for example - you regularly review mobile phones and you have a good subscriber base too - in this case, some company who might have recently launched their smart-phones would be willing to sponsor your videos if you would be willing to review their phones too.
Advertising business model
Take ads from companies, show it on your product/service, and earn money by impressions & clicks-by-customers. The challenge in this model is that if you do not show RELEVANT ads, your customers will not click them - though you would still earn money from impressions but clicks would have given a far better ROI.
Razor and blades business model
Here you sell one item at a low price (or given away for free) in order to increase sales of a complementary good, such as supplies. For example, inkjet printers require ink cartridges, and game consoles require accessories and software. Printers and razors are sold less than cost, as their manufacturers plan to make high margin from selling a complementary product (cartridge/blades).
Open Source business model
Sell the product for free and plan to make money on support, customization and installation. Most open source software follow this model.
Credit-card business model
You make your product free for one side (consumers) and use the network effects to make the other side (merchants) pay.
Up-selling & Cross-selling business model
Sell a product/service for free but use it to promote a premium product in the same segment. For instance, if you run a research-reports website, you could give high-level summaries for free but sell detailed reports at premium price.
Brand-building business model
Use your free products/services to get noticed in the media and thus build a strong brand name for yourself/your-company. Once your brand name becomes popular in the market, you can sell your upcoming products/services at a premium price.
Affiliate marketing
You can signup for affiliate programs being run by companies related to your product/service and convert your users to customers of your affiliates.
Limited-period-Promotion business model
Start with giving away the product/service for FREE. This will help you get a strong customer base. Start charging once you have a substantial number of customers using your product/service.
Acquisition/Merger business model
Build something so big that would attract a big player of the market; like Alphabet (google), Facebook, Apple, Microsoft, Adobe, Oracle, etc.; to either acquire or acquihire or merge you.
Funding business model
Build something so good that would attract a big funding player of the market to fund you.
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