The five primary revenue models used by e-commerce firms are advertising revenue model which is when a company provides a forum for advertisements and receives fees from advertisers. Subscription revenue model which is when a company offers its users content or services and charges a subscription fee for access to some or all of its offerings. Transaction fee revenue model is when a company receives a fee for enabling or executing a transaction. Sales revenue model is when a company derives revenue by selling goods, information, or services and affiliate revenue model which is when a company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales
The five primary revenue models used by e-commerce firms are:
the advertising revenue model
the subscription revenue model
the transaction fee revenue model
the sale revenue model
the affiliate revenue model
The advertising model derives its profit by displaying paid advertisements on a Web site. The goal is to convince advertisers that the site has the ability to attract a sizeable viewership, or a viewership that meets a marketing niche sought by the advertiser. Firms that use the subscription model offer users access to some or all of their content or services for a subscription fee. Firms that use the transaction fee model derive profit from enabling or executing transactions. For instance, transaction fees are paid to eBay when a seller is successful in auctioning off a product, and E*Trade receives a transaction fee when it executes a stock transaction for a customer. In the sales revenue model, companies draw profit directly from the sale of goods, information, or services to consumers. In the affiliate model, sites receive referral fees or a percentage of the revenue from any sales that result from steering business to the affiliate.