Revenue Models

Question 1

What are Revenue Models?

Answer 1

Dictates a part of the business model on how a business will charge customers for a product or service to generate revenue.

Question 2

Transactional-Based Model

Answer 2

The revenue is generated by directly selling an item or a service to a customer.
- The customer can be another company or a consumer.
- The price of the product or service constitutes the production costs and margin.

Question 3

Advertisement-Based Model

Answer 3

It is valid both for online and offline businesses. Revenue is generated by selling ad space.

Question 4

Commission-Based Model

Answer 4

Owners earn a share from each transaction processed in the marketplace. Owners can charge a commission at a fixed percentage or fixed flat fees.​

Question 5

Affiliate-Based Model

Answer 5

A business receives its commission from a seller, rather than a customer. An affiliate model is a contract between a supplier of a product/service and a promoter.

Question 6

Interest-Revenue Model

Answer 6

Any type of business generates revenue in the form of interest on their loans or deposit payments. The revenue is generated by making a loan to a customer or by a customer depositing or investing money (or other resources) with the business.

Question 7

Donation-based Model

Answer 7

Based on investments made by businesses or customers on a voluntary basis. The product or service itself is free to use by default, so that’s the primary value a business brings to the customer.