~welcome to e-commerce world~

Post by Jackie, 16 June 09 @ 7:07pm

Revenue model is a combination of strategies and techniques which an organization uses in order to generate income. There are five main types of revenue models :-

1. Sales.

• Revenue from sales of goods, product information and services of an organization.

2. Transaction Fees

• Commision generated based on the volume of transactions achieved. The more transactions are made, the more revenue incurred.

3. Advertisement Fees.

• Organizations allow other companies to advertise in their websites in return for a fee paid. This fee is called advertisement fees.

4. Subsrciption Fees.

• Organizations charge a fixed amount of fees to customers that subscribe to their contents and services. Fees are charged monthly or annually.

5. Affiliate Fees

• Organizations get commission for referring customers to other companies websites.
  

Google's revenue Model

Google gets a large amount of revenue from advertising fees. Their advertising revenue is generated mainly from Google AdWords, Google Adsense and Froggle. Besides that, Google Answers also produce some revenue for the company.

Google AdWords generates more than 90% of the total advertising fees. It is a pay per click advertising program which allows the users to get the information that they need as soon as they start searching for it. Google generates revenue when advertisers present advertisements to the public whom are looking for the information related to what the advertiser is offering and everytime the advertisement is clicked, Google gets paid a certain amout.



Google AdSense is a progamme where owners need to enroll to allow text, image and, video advertisements on their sites. Google generates revenue when the advertisement is clicked or per-thousand-ads-displayed basis.


Froggle is a service which enables users to easily search for products selling online. Froggle is unlike other search engines as it does not charge any fees for listing nor commision on sales. However, it generates revenue by providing advertising space for lease in Froggle in the form of AdWords.

References:
http://www.organicspam.com/google_revenue_model.asp

Amazon's Revenue Model


Amazon generates their revenue mainly by the retail sales of music CDs, DVDs, software, books, personal care items, household, electronics, toys and etc. They are one of America's largest online retailers. This is all done on Amazon Marketplace.

Amazon Marketplace is also a good revenue model for Amazon. A commission rate is charged based on the sale sprice, transaction fee, and a closing fee. These consist of the sales revenue and transaction fee revenue model.

Moreover, Amazon.com also generates revenue by their Amazon Associates Program. This progam is an affiliate program which contributes to their revenue. The fees charged for the affiliate links ranges from 4% to 10% of the product price. For example, Amazon.com receives a commision based on how many products or services of other company's are displayed.

References:

http://www.davechaffey.com/Internet-Marketing/C2-Internet-micro-environment/Online-revenue-models

http://www.ecommerce-guide.com/solutions/affiliate/article.php/3493196

eBay Revenue Model

eBay is an online auction and shopping website where a community of individuals and businesses are able to buy and sell goods and services worldwide. The eBay Marketplace generates a major amount of revenue for eBay as thousands of eager users go online everyday worldwide to buy and sell collectibles, furniture, vehicles, equipment and many more. The items are available for purchase through auction-style or fixed-price trading.

PayPal is one of the revenue models of eBay. It allows for payments to be made and transferred through the internet. It charges a transaction fee at a certain percentage for the collection of money.

Besides that, another revenue model of eBay is Skype. It generates revenue by making premium offerings such as making and receiving calls to and from mobile phones, landlines, voicemail, call forwarding, and even personalization of ringtones.

References:

http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/eBay-case-study-e-commerce

http://pages.ebay.com/aboutebay/thecompany/companyoverview.html