{"id":125249,"date":"2024-04-04T10:04:00","date_gmt":"2024-04-04T14:04:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=125249"},"modified":"2024-04-12T10:28:14","modified_gmt":"2024-04-12T14:28:14","slug":"how-to-earn-profit-in-business","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-to-earn-profit-in-business\/","title":{"rendered":"How to Earn Profit in Business: 3 Money-Making Strategies"},"content":{"rendered":"\n

How do you turn a profit in business<\/a>? What are effective profit-making strategies?<\/p>\n\n\n\n

Turning a profit can be difficult because many strategies can actually decrease your business’s value. Thankfully, Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary have strategies that will guarantee your business earns more money.<\/p>\n\n\n\n

Find out how to earn profit in business below.<\/p>\n\n\n\n\n\n\n\n

How to Turn a Profit<\/strong><\/h2>\n\n\n\n

The authors explain that learning how to earn profit in business can be difficult because most of the obvious profit-making strategies, like charging users to join, can lower <\/em>your platform\u2019s value by impeding easy access and decreasing the size of your network. For this reason, many platform designers elect a free or \u201cfreemium\u201d (free with paid premium upgrades) model until the network is sufficiently built up. Then, they can consider implementing profit-making strategies. If you have a similar plan for your platform, note that charging for benefits that were once free\u2014like access to basic features\u2014is a surefire way to make users feel exploited, which could lead to an exodus of users. Instead, create additional value (like exclusive content or an ad-free experience) and charge for that.<\/p>\n\n\n\n

(Shortform note: Although the authors warn that charging users for benefits that were once free can spur users to leave your platform, recent data suggests the opposite. In 2023, Netflix introduced measures to prevent password-sharing, which sparked user ire but paid off for the company in the form of nearly 10 million new subscriptions<\/a>. In 2024, Amazon introduced ads to its streaming service, offering users the option to pay to get rid of them. This move was also unpopular with users, but experts suggest that it will be profitable and other streaming services are likely to follow suit<\/a>. Users may tolerate such changes if they view a platform as indispensable, as streaming services<\/a> have become in the entertainment sector.)<\/p>\n\n\n\n

Effective profit-making strategies capitalize on user benefits\u2014like producers\u2019 and consumers\u2019 access to each other\u2014without motivating users to leave the platform or use it less frequently. This requires understanding the spending ability of each user market\u2014for example, ultra-profitable producers may have more money to work with than consumers with little disposable income.<\/p>\n\n\n\n

(Shortform note: There are several ways to ensure your platform is affordable for users<\/a>, given their spending ability. For example, you might conduct market research by collecting and analyzing data that capture your targeted users\u2019 spending habits, or you might price-match with competing platforms.)<\/p>\n\n\n\n

Effective profit-making strategies include:<\/p>\n\n\n\n