Revenue model for Google, Amazon.com & e-Bay

E-commerce consists of buying and selling products through computer process and it is quite popular nowadays. Some company focusing on using e-commerce to conduct their business. Some people may be confused that without physical transfer of money, how are these companies going to survive? How are they going to earn money? The answer is through revenue model.

A Revenue Model lays-out the process by which a company actually makes money by specifying how it is going to charge for the services provided. What is the revenue model for Google, Amazon.com and eBay?

Google is a useful and popular search engine; it has many revenue models such as Google AdWords and Google AdSense. Google Adwords is a pay per click advertising program designed to allow the advertiser to present their advertisement to the user. Pay-Per-Click (PPC) is an online advertising payment model in which payment is based on qualifying click-through. An advertiser has to pay every time his advertisement receives a click. When a user search for something, there are some related advertisement will be shown on the right side of the screen. You can see a clear picture as below:

If you are interested to advertise in Google you can log on to www.adwords.google.com for more information.

Google AdSense is an advertisement serving program. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the advertisement are administered by Google. AdSense program includes AdSense for search and AdSense for content. Advertisers are required to pay Google a fee each time a user clicks on one of their ads displayed on Google Network members’ web sites. Here is the picture for Google AdSense:

Amazon.com is an American-based multinational e-commerce company. It sell product online such as electronic device, books and games. Amazon is the most successful online-shopping website.

Amazon Marketplace is an online marketplace that allows sellers to sell their product. Buyers can buy new or used items which are sold directly by a third party through Amazon Marketplace; this has created profit for Amazon. Besides that, Amazon will charge a commission rate based on the sale price of an item. When each transaction is being done, Amazon will also charge transaction fee to the seller. In addition, Amazon also allows some user to advertise their advertisement on their website.

eBay is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. It also establishes localize website in many countries including Malaysia. EBay generates revenue from a number of fees such as insertion fees, promotional fees, and final value fees.

Insertion fees: When an item is listed on eBay, a non-refundable fee is charged.
Final value fees: Fees that charged to the seller at the end of each auction.

Here is an example of the auction:

Every e-commerce business is continuously creating new revenue model in order to bring more profit to the organization. We hope to see a lot of revenue model in the future.