Tuesday, June 10, 2008

Revenue Model

Revenue model is description of how the company or an E-commerce project will earn revenue. It is include 5 models such as sales revenue model, transaction fees model, subscription fees, advertising model, and affiliate model.

Sales revenue model is companies generate revenue from selling merchandise on their web site of from providing a service.
Transaction fees is company receives a commission based on the volume of transaction made.
Subscription fees are customers pay a fixed amount, usually monthly, to get some type of service. Fee from subscribers is in exchange for access to content or service.

Advertising fees is companies charge others for allowing them to place a banner on their sites.
Affiliate fees are companies receive commissions for referring cust
omers to other Web sites.

Now, let me compare each revenue model for Google, eBay, and Amazon.com.

Sales Revenue Model: The main representative is Amazon.com.
The major revenue of Amazon.com is selling book, CDs, DVDs, software and so on. Amazon.com reported over 1.3 million sellers sold products through Amazon's worldwide web sites in 2007. Not only Amazon.com, eBay also make revenue through sales revenue model as well. However, Google seldom involve in such model as it major business is search engines.

Transaction Fees Model: eBay is classical example for this model.
eBay is platform let people buy and sell their goods through their website. It become the intermediate in this trade and received transaction fee between them. Amazon.com and Google not many this kind of revenue compare with eBay.

Subscription Fees Model: These three companies all got this kind of model. The following link is can let u see how they can earn this revenue.
eBay
Amazon.com
Google


Advertising Fees Model: it is Google major revenue sources.

Almost 99% sources revenue of Google is advertising fees
, such as Google AdWords and Google Adsense.

Clickriver Ads can place advertisement on the Amazon.com

Same as the Amazon.com, eBay also got some this kind of model.

Affiliate Fees Model: Pay-Per-Click is most popular that Google use it generates revenue. As compare with eBay and Amazon, Google also very famous in this. Nowadays, affiliate program is also become more popular compare with advertising as it also part of the advertising. eBay and Amazon trend to become most using it as well.


2 comments:

joyne said...

Did you think many websites earn money through provide advertising services?

Lynn said...

ya. because advertising is the most easy and faster way can earn money.