The simplest business ideas can be hugely profitable
If you need an example of this, just think of the person who decided to bottle water and sell it.
Diane Hall
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If you need an example of this, just think of the person who decided to bottle water and sell it.
Think about it: water. A naturally occurring resource that falls from the sky for free, yet someone thought of putting it in a bottle and selling it to the public for more than a quid a time.
I get that there’s more to it than that, such as filtering, the adding of nutrients and the cost of packaging, but you’ve got to admit, as business ideas go, that is genius. And, from a profitability point of view, the mark-up on a bottle of water must be huge.
It’s the same with takeaway coffee. Froth a bit of milk, call it something fancy, and you can get people to part with three quid for something they could make at home.
Here are a few more examples of successful brands and business models that bring a good profit from the simplest of ideas…
Dollar Shave Club (DSC)
This brand disrupted the market when it came on the scene. Despite selling items that already existed, which are used daily, and being in a market populated by household names, DSC still felt that they could fill a gap most people had no idea existed.
The common issue with refillable razors is that consumers can’t always remember (or be bothered) to buy replacement blades. When their current blade is on the way out, the pain of making the effort to buy new ones is seemingly a greater pain than the blunt blade ripping into their skin when they try to have a shave.
DSC was one of the first companies to use a subscription model in an innovative way. They send replacement blades, as well as other shaving paraphernalia, via the post, direct to consumers’ door every month.
Their business model is genius, as they’re essentially just packaging up other people’s products and posting them out. However, the pain they’re solving for their consumer is huge, and it’s the reason why they achieved a billion-dollar valuation in 2019.
Drop-shipping
A relatively new phenomenon, drop-shipping allows the business owner to import/sell loads of different product lines, but without the need to store them—as each product order is shipped directly from the manufacturer to the consumer. Drop-shippers don’t need to order in bulk, either, to take advantage of decent profit margins; the way the model is set up means that the business owner doesn’t even pay for a product until they’ve sold it to their consumer, which makes drop-shipping an attractive business, as there’s so little upfront investment required.
eBay
Ali Baba was, perhaps, the forerunner of this kind of ‘marketplace’ website; however, eBay is perhaps the most well-known, in the UK at least. Though they sell no products of their own, they’ve certainly made a lot of money from everyone else’s.
Mirroring the traditional car boot sale, eBay encourages users to sell items they no longer want or need. They use the concept of bidding on their platform—they don’t set the price of an item, the consumer does, in how much they’re willing to pay for it. eBay simply provides the platform and makes its money by taking a percentage of revenue from successful sales as well as advertising fees for higher-priced items.
One of the most successful sites/businesses in recent times, Facebook started as a website that rated the attractiveness of girls at founder Mark Zuckerberg’s college. The site then launched into other colleges and, eventually, the whole world; as it did so, it went from a site that rated girls to being a credible social media platform.
Once the site’s functionality was set up, allowing users to post their personal details and any other information they wanted to share, that was the essence of the business. For many years, the social media giant didn’t make any money, until it went public on the stock exchange—now, Zuckerberg is one of the world’s youngest billionaires.
So, no complicated engineering involved, no manufacturing…these businesses have made money from simply an idea.
Which successful company do you wish you’d launched? Tweet us at @intheknowemag.
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