E-commerce revenue model describe how the firms earn revenue, generate profits and produce a superior return on invested capital from the publisher's websites. As e-commerce develop into a more advanced approach, the traditional revenue model of sales is expanded to more variety of revenue options and e-commerce business model. There are five (5) major types which are advertising revenue model, subscription revenue model, transaction fee revenue model, sales revenue model and affiliate revenue model.
The core revenue of Google came from advertising and the supreme source of revenue to Google is Google AdWords ($21 billion in 2008). Google allowed website owners to advertise on Google search result pages through a program they call Google AdWords. Advertiser will customized their own advertisement and determine how much they will pay for each click on their ads, where the ad will run and how long it will last. These ads will appear on Google's search results, on websites, virtually anywhere a web page can be served. AdWords offer pay-per-click (PPC) advertising and site-targeted advertising for both text and banner ads. PPC is an Internet advertising model used on search engines, advertising networks, and content sites, such as blogs, in which advertisers pay their host only when their ad is clicked. The Advertisers decide the keywords relevant to their offer that should display their ad and the maximum amount they are willing to pay per click for that keyword. Moreover, this enables advertisers easily to sign up and manage an account online.
Amazon.com is the well-known web which was the first major companies to sell goods by Internet. The fundamental revenue of Amazon.com is by generating sales revenue by selling books, computer software’s, video games, etc online. In addition, Amazon.com sanctions independent sellers to sell new and used items under a fixed-price basis on Amazon website via Amazon Marketplace. Amazon will charge a minimal fees based on the sale price, transaction fee and variable closing fee.
Additionally, Amazon.com also generates affiliate fees through Amazon.com Associates. This is a place where can earn up to 15% in referral by advertising Amazon product through Links & Banners, Widgets, and AStore. AStore is an Amazon.com affiliate product which website owners can use to customize an online store on their site in minutes and without the need for programming skills. However, website owner does not allow selling their own product directly but picking products offered by Amazon’s Store and earn referral fees on the products purchased by the reader.
eBay.com is an online auction and shopping website which allow peoples over the world to buy and sell variety of goods and services over the internet. eBay revenue model is totally different from Google and Amazon.com. eBay generates most of its revenue through various sources of fees. There is a list of fees that charged by eBay when customer would like to place an item for sale or auction such as fees to list a product (Insertion Fee) and fees when the product sells (Final Value Fee) plus several optional adornment fees.
In addition, eBay now owns the PayPal payment system which has fees of its own. PayPal is an example of a payment intermediary service that facilitates worldwide e-commerce. It allow user to execute online payment process to online vendors, auction sites and other commercial users for a minimal charges of fee. Besides that, eBay also runs an affiliate program beneath the name of eBay Partner Network. Fees are paid a percentage of the eBay seller's transaction fees. The payout is 50% to 75% of the fees paid for an item purchased.
by, melsiew
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