EC REVENUE MODEL

FOLLOWING ARE THE MAJOR REVENUE MODELS FOLLOWED BY VARIOUS ONLINE BUSINESS

Sales

• Companies generate revenue from selling products or services on their

websites.

• An example is when Net-a-Porter, Starbucks, Amazon.com, or

Godiva sells a product online.

Transaction Fees

• Commissions are based on the volume of transactions made.
• For example, when a home owner sells a house, he or she typically pays a transac tion fee to the broker.
• The higher the value of the sale, the higher the total transaction fee. Alternatively, transaction fees can be levied per transaction .
• With online stock trades, for example, there is usually a fixed fee per trade, regardless of the volume.

Subscription Fees

• Customers pay a fixed amount, usually monthly, to get some type of service.
• An example would bethe fee you pay to an Internet access provider (fixed monthly payments).

Advertising Fees

• Companies charge others for allowing them to place a banner on their sites.

Affiliate Fees

• Companies receive commissions for referring customers to certain websites. A good program is available at Amazon.com.

Licensing Fees

• Another revenue source is licensing fees. Licensing fees can be assessed as an annual fee or a per usage fee.
• Microsoft receives fees from each workstation that uses Windows NT, for example.

Other Revenue Sources

• Some companies allow people to play games for a fee or to watch a sports competition in real time for a fee (e.g., see espn.go.com )

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sagar gupta