As technology progresses and evolves, more individuals are spending time online to purchase items, connect with friends, and market their businesses. With the coronavirus crisis impacting and restricting brick and mortar, organizations must think outside the box and find new ways to reach customers.
Furthermore, financially strapped businesses have to do everything possible to save as much money on operating costs as to survive this disruption.
One valuable solution is employing an automated business model that harnesses technology to reach a segment of customers. Because automated business systems typically require less internal employees, customer service, and resources, organizations can save money and boost their profit margins.
Read ahead to learn about 4 unique types of automated business systems and how they work.
Statistics Demonstrate Automation is the Future-: According to experts, 45% of current paid activities can be automated by utilizing modern technology. This is equivalent to approximately 2 trillion in total annual wages
Automated Business System Examples
The data-driven world has allowed organizations to have access to more information than they ever had. Data collection tools are frequently employed to analyze sales numbers, identify the customer base, and monitor the company's progress. Externally, people of all walks of life upload their data online every day. Organizations take advantage of this information to advertise and market to targeted individuals.
Some entrepreneurs have even incorporated data and automation into a business model. Because more and more people use their phones or computers to order products, grab a ride, deliver food, or retrieve money from an ATM, employing an automated business model is a smart choice to increase profit margins.
In short, knowing how to harness a BPA strategy in today's digital age can give an organization the competitive edge it needs to succeed.
Here are some top examples of automated business models and how they operate-
1. Become an ATM Company
One automated business system is an ATM company. Entrepreneurs can purchase automated teller machines and place them in specific areas where people may want access to money.
The owner then charges a processing fee every time the machine is used to receive a percentage of the transaction. This allows the entrepreneur to earn a passive type of income while their customers do all of the work. The only requirement is that the owner restock the ATM with more money when needed.
A benefit to this type of model is that the owner doesn't have to put forth much effort, other than to monitor the cash flow of the machines. The investment to purchase these machines can be pricey, but the passive income usually more than makes up for the cost.
2. Become a Publisher
Authors who write e-books or traditional books can upload their work online and sell them automatically. Once the book is uploaded to a particular portal, a contracted publisher sends it to bookstores and other marketers.
When a book is published, both the author and the publisher receive a percentage of the profit. Though the profit margin is on the low side for this type of model, selling a large number of books can help to increase revenue.
Though many big-name authors use this model to sell their work, it is a great option for less-known authors with minimal resources and less advertising capabilities. It provides a way to market oneself without putting a lot of effort or money into the process, other than writing the actual book.
3. Sell Information Online
Millions of people across the United States have started an online company to generate an automated form of income. Many individuals online sell information, software, music, or more to those who visit their website. The website owner doesn't have to send a physical item and instead sells a form of data that is automatically delivered.
Physical items can be sold as well, but this makes it less of an automated model. Most brick and mortars also use an automated business system to increase sales and enhance their marketing strategy. Smaller less-known companies can use this option to increase their profit margins and receive name recognition to attract more customers over time.
4. Utilize Drop Shipping
Many entrepreneurs have formed a drop shipping company to sell items online and use a third-party shipper to manage all of the orders.
For example, sellers on eBay allow eBay to automatically fulfill all of the orders, saving money on time and shipping fees. The seller brings in a passive income by using a third-party to manage all of the delivery services.
Because shipping and delivery fees require resources and hurt profit margins, using a drop-shipping automated business model is a helpful option for smaller enterprises. Larger businesses tend to market the quality of their delivery services to attract new customers, but smaller businesses don't always have that choice. Furthermore, the market is expected to continue increasing due to the year-by-year increase in consumer online spending.
Statistics Show Growth in Drop Shipping Market-: 1. The global drop shipping market was valued at approximately 102 billion in 2018.
2. The market is expected to continue growing due to customer preference for online shipping and cross-state e-commerce trade.
3. E-commerce and drop shipping profits have reached over 4 billion in 2020.
In conclusion, here are the key takeaways to remember about automated business systems-
- Because more people use online systems to shop for products and access services, many companies have employed an automated business model to generate profit.
- An ATM company allows an entrepreneur to gain a passive income by collecting a percentage every time a person uses the machine to get cash.
- A publisher can sell e-books or traditional books online by allowing a publisher to perform all of the work. When a person buys a book, both the author and publisher automatically receive a portion of the income.
- Many individuals sell information and services online to avoid shipping a physical product to the customer. Some brick and mortars use elements of an automated model to increase sales and generate more customers.
- Entrepreneurs can hire a drop-shipper to deliver a product rather than do the work to ship it themselves. This helps to save money and decrease the number of resources needed to run the business.