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How Online Service Businesses Make Money; A Detailed Explanation of Revenue For Service-Focused Businesses

This post is about all the alternatives that service businesses use to make money.

Key Takeaways 

  • There are numerous sources of income for all types of online businesses
  • Advertising is the largest source of revenue for many Internet businesses
  • Online businesses are no longer able to collect any kind of data 
  • If you create great content related to your audiences, you can make a lot of money

Nowadays, more and more entrepreneurs are putting their businesses online. Due to the fantastic network of the digital world and as more people are using the Internet to purchase products and services, there are many significant advantages in this business area to use for your ends. 

Hopefully, small businesses can bring in revenue without even launching a physical store or office. But, it may raise a fundamental question: How do online businesses make money? 

In this article, we will discuss numerous ways that businesses on the Internet can make money. 

What are the types of revenue online businesses can enjoy? 

It may seem odd that online businesses can make substantial profits despite offering services for free. The majority of products and content available on the Internet are provided to users at no cost. 

The truth is that kind of companies can generate massive revenue while offering free services. The most common ways to make money as the online service business includes:

  • Advertising

The primary source of income for most online businesses revolves around advertising. Since engaging and educational content is provided on websites and social media platforms, many users are visiting online businesses.
Each of these users represents a potential customer for other online businesses, and that’s why they are willing to pay you for advertisement.

It’s interesting to say that 80% of Google’s revenue is generated by advertising.
So, if you build a popular website for your business, you can turn it into a cash machine. But it’s important to note that always pay attention to your website advertisement. Your target audiences are visiting your website for specific purposes. And if your advertising is unrelated to your business and target market, you will gradually lose your visitors.

  • Sell Services

The primary purpose of launching an online service business is to offer unique and reliable services. If you are a teacher, lawyer, consultant, or life coach, you are using a service-based business model. In this case, you are exchanging your time and expertise for money.


Service businesses can operate offline without building a website to offer their services on the Internet.
However, an online presence can help you earn a global reputation and reach more clients more quickly and effectively. You charge your clients based on the service they want to purchase, and that’s how you make money.


If you work directly with your clients, build a one-to-one relationship with them, and offer excellent customer support, your business is going to stand out in the online service market. And this is our primary purpose in Frizi to help entrepreneurs build the best online service-based business possible.

  • Subscription

It is the best business model for content-driven websites. As you publish great content or offer high-quality service or product, users are willing to pay for the subscription.


If you are a newbie in the digital world, subscriptions cannot be a great income source for your business. Online users still don’t trust your business. You need to work hard and put a great deal of time into your brand image, especially in the service area.


As your business becomes more popular among your target audiences, you can use subscriptions as one of your leading revenue sources. Moreover, you need to create engaging content for your audiences to keep them attracted to your business. So, they continue to pay for your subscription.

  • Content and Information

Content and information, also known as information products, include an essential part of online businesses' profit. If you sell guides, e-books, video courses, podcasts, or templates, you are selling information products.


It is an excellent source of revenue for service-based businesses as it has several advantages such as,
-      It can scale very quickly: You only create one e-book or guide, but you can sell more copies simultaneously.
-      It is a type of content that people, especially in the service area, are looking for: You, as a service business owner, are selling your expertise in the form of content and information.
-       By providing great content for your audiences, you can benefit from inbound marketing as well.


Like subscription, if you want to make money out of information products, you need to show your target market that your expertise worth money.

  • Data Collection

There is a common myth that Internet service companies make money by selling data. Some people believe that these companies sell user’s data to other companies such as advertising companies. 

However, there are many legal regulations for online business owners that prohibit them from selling data. All online businesses must protect their user’s data and privacy. In May 2018, the General Data Protection Regulation (GDPR) came into effect.

According to this regulation, website owners are required to notify users of the type of data they collect and how they protect it with the user's consent. 

This is not a source of revenue as you cannot sell data to other companies. But it doesn’t mean you can’t process the data you collect to optimize your marketing and promotion strategies. 

Collected data allows you to get to know your target audiences better and offer services that are specifically tailored based on their needs.  

Additional income sources  

As we discussed in the previous section, online businesses have so many ways to generate revenue. And some of them are still looking for new ways of earning profits. For example, Google generates 80% of revenue from advertising and is always expanding its revenue sources into other areas such as cloud storage, apps, Android licensing fees, and self-driving cars. 

These additional income sources are suitable for service-related businesses as well. As long as you know what your audiences are looking for and find a way to solve their problems, you are running a successful online business. 

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