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Revenue Models Essay

2499 words - 10 pages


A revenue model defines as in a business how a trade or commerce produces returns from the product or services that the business provides (1).This is one of the most important model of the business model. As a current business wants to involve in the new upcoming areas of trade it should be able to defend the new competitors in the market. Therefore, a business needs to create their revenue models wisely. At the beginning of the business one need to keep in mind to build a good revenue model as it is important to keep up the business growth initially as the stockholders are very much concerned and intelligent in investing their shares in the business.(1)
Defining the revenue model of the business and also judging how to price the products and technologies that are manufactured by the business are the most crucial part in development of products and tools. Finally the business model is includes by pricing the products and technologies and the revenue model which effects the marketing decisions by means of the customer service decisions.(2) The revenue model is used for middle and lengthy period estimates of a company’s revenue process and procedures and also by what means a business is going to get income, profits and produce more returns on what a business has invested.(3) The effect of revenue model and set a price judgments are difficult and have a basic effect in what way the business is going to operate. Every business is going to have their own innovative revenue model.
Finally there are many different revenue models that a business is going to consider and also reinvent their revenue models. The revenue model finally needs to satisfy the customer and client decisions. Many businesses have their own techniques to get the revenue by least pricing, advertising, auctions bids, licensing, premium, online shopping, commercial and retail. The revenue models are divided into eight different categories as below: (1)
Commercial and Retail: As time went on till the markets were existed the physical goods were sold, then many services were presented. In these recent years the digital products were also developed. The method of selling the products to private clients and business clients are same. The risks that include in the commercial and retail model are: Rotating the business like sale at once, repeating the sale and also selling it before the product gets released in future. Selling products ties the customers to the business (classic examples: printers and ink cartridges), Pricing the highest premium products to lowest with offers (e.g. first class on airlines). In the traditional retail world there were products selling in stores and streets but later in 90’s companies like Amazon began and offered goods through e-commerce and provided customers with lower prices than the stores gave. Digital goods can be downloaded and consumed instantly and usually have no extra...

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