Which of the following is the main revenue model for an e distributor?
How do you get your product, service, or app into the hands of your target customers? Check our guide on the most used revenue models to help you decide. Show
Regardless of how good your product, service, or app is, it’s only useful when you can get it into the hands of your target customers. But once you’ve got a finalized offering, selling it should be easy, right? Not really. There are countless factors that need to be taken into account when you set out to bring your product to market, like the industry you’re in, whether you’re selling a web-based product or physical hardware, the channels you use to attract your customers, etc. The Founder Institute has helped launched many profitable startups around the world. Apply to a program to a program in a city near you! And that’s why we’ve prepared an extensive guide that clearly outlines some of the most commonly used revenue models startups use to sell their offerings, along with the advantages and disadvantages of each to help you pick the best revenue model for your company. Business Model vs Revenue Model vs Revenue StreamBefore we delve into the different types of revenue models, we should spend a little time differentiating between the terms "business model", "revenue model", and "revenue stream", as they are very often used interchangeably. In the GlowingStart article, "What Is The Difference Between A Revenue Model, Revenue Stream And A Business Model", Alex Genadinik does a great job explaining the difference between those terms. They are summarized below:
Types of Revenue ModelsThere are numerous types of revenue models, so this list in no way attempts to list them all, especially since so many of them go by other names in the startup community. However, below are ten of the most popular and effective revenue models employed by companies, both big and small. Genadinik’s article, “Different Revenue Models”, covers some of the more common revenue models that countless recently-launched startups use to generate their first sales. Here are the revenue models he covers below: 1. Ad-Based Revenue Model Ad-based revenue models entail creating ads for a specific website, service, app, or other product, and placing them on strategic, high-traffic channels. If your company has a website or you have a web-based company, Google’s AdSense is one of the most common tools get ads. For most websites, AdSense will earn about $5-10 per 1,000 page views.
2. Affiliate Revenue Model Another popular web-based revenue model is the affiliate revenue model, which works by promoting links to relevant products and collecting commission on the sales of those products, and can even work in conjunction with ads or separately.
3. Transactional Revenue Model Countless companies, both tech-oriented and otherwise, strive to rely on the transactional revenue model, and for good reason too. This method is one of the most direct ways of generating revenue, as it entails a company providing a service or product and customers paying them for it.
4. Subscription Revenue Model The subscription revenue model entails offering your customers a product or service that customers can pay for over a longer period of time, usually month to month, or even year to year.
In the blog post “Comparing Business Models to Sales Models”, Dave Parker outlines the various ways that a company can sell their product or service, emphasizing how the market you pick affects the way in which you take your product to market. Here are the methods he describes: 5. Web Sales This is an offshoot of the transactional revenue model, in which a customer pays directly for a product or service, except that customers must first come to your company via a web search or outbound marketing, and conduct transactions solely over the internet.
6. Direct Sales There are two types of direct sales: inside sales, in which someone calls in to place an order or sales agents calling prospects; and outside sales, which is a face to face sales transaction.
7. Channel Sales (or Indirect
Sales) The channel sales model consists of agents or resellers selling your product for you and either you or the reseller delivering the product. The affiliate revenue model is a good companion model to this one, especially if your offering is a virtual product.
8. Retail Sales Retail sales entails setting up a traditional department store or retail store in which you offer physical goods to your customers. Keep in mind that the retail sales model will require shelf space (that you’ll have to pay for) at existing stores, and is best suited for products that require logistics to reach your customers.
In the Domain.me article, “Planning The Expansion and Revenue Models for your Startup”, Sarah Green lists even more effective revenue models for startups, including two that are based around the idea of giving something to your customers for free to help generate revenue at a later point. 9. Product is Free, But Services Aren’t This model is unique compared to others, in that you have to give your product away for free, yet require customers to pay for installation, customization, training or other additional services.
10. Freemium Model The freemium model is one in which a company’s basic services are free, yet users must pay for additional premium features, extensions, functions, etc. One of the biggest companies to use this model is Linkedin, the most popular business/social media platform.
Final ThoughtsRemember to do your research, and take the time to decide which model is most ideal for your startup, as once you settle on a revenue model, especially if you’re early stage, it can be hard to pick another. As stated before, this blog post doesn’t cover every revenue model used by startups, but by highlighting the most popular ones, you should have enough information to help you pick the revenue model that will boost your startup into the big leagues. Do you want more expert entrepreneurial advice? The Founder Institute is currently enrolling. Apply today!What is revenue model in e business?The sales revenue model is another eCommerce business model where wholesalers and retailers sell their products over the internet. This type of revenue works by reaching out to a wider range of target audiences connected to the internet.
What are the 3 main types of revenue models?Types of Revenue Models. Ad-Based Revenue Model. ... . Affiliate Revenue Model. ... . Transactional Revenue Model. ... . Subscription Revenue Model. ... . Web Sales. ... . Direct Sales. ... . Channel Sales (or Indirect Sales) ... . Retail Sales.. What are the five primary revenue models used by eHere's a look at five common eCommerce revenue models that have proven to be highly successful over the years.. Sales Revenue Model. ... . Advertising Revenue Model. ... . 3 Subscription Revenue Model. ... . Transaction Fee Revenue Model. ... . Affiliate Revenue Model.. What is the sales revenue model?The sales revenue model states that you make money by selling goods and services to consumers, online and in person. Therefore, any business that directly sells products and services uses this model.
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