1. E-Business Management
Session Two : Revenue Models

2. Session Objectives
Define the type of revenue collection methods for B2C and BCB marketplaces
What is a revenue model?
Define the type of revenue models available
Understand the changes in the revenue composition of e-businesses

3. Revenue Collection Collection and disbursement of revenue items B2C
Use of credit cards
Digital wallets
Digital Cash

4. Revenue Collection Collection and disbursement of revenue items B2B
Electronic Letters of Credit – where a bank or other authority guarantees the payment, and therefore takes the risk associated with repudiation or order dispute
Internet based EDI – although less standardised than more traditional EDI, this approach has the benefit of integrating payment details with other organisational systems
Electronic billing presentation and payment (EBPP): the process by which companies bill customers and receive payments electronically over the Internet. There are two types of presentment models:
direct model: a biller delivers the bill to customers via its own website, or via a third-party's site
consolidator model: bills from multiple billers are delivered to a single Web site, to be presented in aggregate to the consumer for viewing and payment

5. Revenue Model - Definition
A revenue model is a part of the overall business model, and is essentially the underlying concept of how the e-business will attract and collect revenue
The three forms are:
Sales
Taxes/Individual Service User Payments
Financial Contributions from the public

6. Types of the Revenue Model
Advertising – income from, for example, banner ads and linked to volume and quality of hits
Sponsorship – sponsorship from a company wanting to convey brand values through association with programs that fit the company's product or corporate image.
Subscription – in effect a membership charge for the ability to receive services for a specified time

7. Types of the Revenue Model
Transaction Fee – in effect, a broking fee for facilitating a sale between two parties
Affiliate – referral fees when one website leads a party on to another where they conduct a transaction – and the original site therefore gains a cut of the fee : a referral type model

8. Types of the Revenue Model
Sales – may be of goods or services, which can include information (for example, market information) or provision of web services themselves (such as server spaces for websites, or hot counters)
sales packages may themselves come in diverse forms, such as forward payments for a series of services or deliveries of goods, or agreements to purchase a number of as yet unspecified items (for examples, on a book club model) or basic sales plus discounts on add-ons and so on

9. Sales Revenue
Online sales revenues are further affected by sales channel decisions, such as customer service, purchase processes, website performance

10. Internet B2C Revenue
Before the dot.com crash

11. Internet B2C Revenue
After the dot.com crash

12. Discussion
Discuss the feasibility of the types of revenue models the following companies use:
Harvard Business Review Online

13. References
Afuah & Tucci, Internet Business Models and Strategies: Text and Cases, 2001
Groucutt & Griseri, Mastering E-Business, 2004
Soh & Markus, B2B E-Marketplaces— A Strategic Archetypes Approach, 2002