The 6 revenue models for your eCommerce business

A revenue model is how your eCommerce business makes money. It is how your business will earn income from its target customers of the product or service that you are offering. Revenue can be generated from an innumerable of sources, such as adverts, subscriptions and pay-per-view models.

  1. Freemium Model
    The freemium model is one in which the company’s basic services are offered for free, however your customers must pay for additional premium features or extensions. The most popular company that uses this model is LinkedIn.
  2. Subscription Model
    This model is a great example of a recurring revenue strategy. The subscription revenue model involves offering your customers a product or service that they periodically pay for monthly or weekly. DEOD uses this model.
  3. Pay-as-you-go Model
    Unlike other models, the pay-as-you-go model charges your customers for the actual quantity they have used. This revenue model is common in telecom and cloud-based services industries such as Amazon Web Services.
  4. Affiliate Model
    The affiliate model is arguably the most popular eCommerce revenue model. It allows people or organizations to promote your eCommerce products or services and receive a commission for any sales made. ProGifts and eBay are some of the eCommerce companies that are using this model.
  5. Ad-Based Model
    By using this model, you allow other companies to advertise their services or products on your eCommerce website. You can either manually post the adverts on your website or use Google’s AdSense.
  6. Transactional Model
    Countless companies, both eCommerce businesses and otherwise, use the transactional revenue model as it is one of the most direct means of generating revenue. Your eCommerce company earns revenue from a one-time purchase from the customers. Tekospares uses this model.