Presentation is loading. Please wait.

Presentation is loading. Please wait.

Revenue Models and the Business Plan in E-Commerce Back to Table of Contents.

Similar presentations


Presentation on theme: "Revenue Models and the Business Plan in E-Commerce Back to Table of Contents."— Presentation transcript:

1 Revenue Models and the Business Plan in E-Commerce Back to Table of Contents

2 Revenue Models and the Business Plan in E-Commerce E-Commerce Revenue Models E-Commerce Business Plan 2 Revenue Models and the Business Plan in E-Commerce Section 8-1 Section 8-2 Chapter 8

3 Revenue Models and the Business Plan in E-Commerce Section 8-1 Why It’s Important A revenue model determines how a company makes money and how the company functions. A well thought out model can mean the difference between success and failure. Understanding what revenue models entail can help you understand more about how companies operate. 3Section 8-1

4 Revenue Models and the Business Plan in E-Commerce Section 8-1 Key Terms revenue model e-zine blog affiliate program licensing 4Section 8-1

5 Revenue Models and the Business Plan in E-Commerce What Is a Revenue Model? The type of revenue model you choose will depend on the type of product or service you intend to sell. revenue model how a company generates income 5Section 8-1

6 Types of Revenue Models 6 E-Commerce Revenue Models Section 8-1 E-Commerce ModelsOnline Applications Product Salesconsumer goods, retail, wholesale Advertising search engines, Web portals, directory pages, commercial Web sites Service online fee-for-service, fee-for-transaction, subscriptions Inter-Organizationalprocurement, supply chain, distribution Third-Partye-malls, online auctions, online exchanges Licensingintellectual rights, patents, copyrighted material

7 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models The most basic revenue model involves selling one product or related product line to customers who use your Web site as they would a print catalog. 7Section 8-1

8 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models There are two types of products you can sell: 8Section 8-1 products you make, which you should sell at a higher price than they cost to make products you buy, which you should sell at a higher price than you paid for them

9 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models A wholesale price is the price a supplier charges a business for a product. A retail price is the price a business charges customers. 9Section 8-1

10 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models Like magazines, TV stations, and other media outlets, Web sites can sell advertising space as a source of revenue. An online business must ensure that its ads will reach its target audience. 10Section 8-1

11 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models Most magazines, newspapers, and information services earn income by selling advertising and subscriptions. An e-zine can also generate revenue by selling subscriptions. e-zine electronic magazine 11Section 8-1

12 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models A specialized type of e-zine is the weblog, or blog. blog a public online journal kept by a writer, or blogger; short for Weblog 12Section 8-1

13 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models Another way to generate revenue is through an affiliate program. affiliate program a partnership through which an online business delivers customers to other online businesses 13Section 8-1 In exchange for bringing business to your affiliates, you receive a commission, or a percentage of the sales they make on that business.

14 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models The idea behind licensing is simple. licensing the granting of permission to use intellectual property, such as music, photos, software programs, and inventions 14Section 8-1 Assume you have created a product. Companies would pay you a licensing fee for the right to market, copy, or use the product.

15 Revenue Models and the Business Plan in E-Commerce Types of Revenue Models In the case of musical compositions, licensing is a critical form of protection. Whenever a musical work is performed for the public—beyond family and friends—the performers must obtain a license. 15Section 8-1

16 Revenue Models and the Business Plan in E-Commerce Section 8-1 Review What is a revenue model? What is a major factor in determining the type of revenue model to use? Why is it important for advertisers to know about a company’s customers before advertising on a particular site? What is the difference between wholesale and retail prices? What is a blog? How can it generate income? 1. 2. 3. 16 4. Section 8-1

17 Revenue Models and the Business Plan in E-Commerce Section 8-2 Why It’s Important Creating a company is hard work, and entrepreneurs must have a clear path, or business plan, laid out when they begin and as they continue to operate their businesses. Knowing what a business plan contains will help you to understand more about what creating and running a business entails. Section 8-217

18 Revenue Models and the Business Plan in E-Commerce Section 8-2 Key Terms business plan forward-looking statements income statement balance sheet assets liabilities 18Section 8-2

19 Revenue Models and the Business Plan in E-Commerce What Is a Business Plan? Your business will be defined by your choices. When you have to make tough decisions, such as whether to offer a new product, you’ll be able to refer to your business plan for guidance. 19Section 8-2

20 Revenue Models and the Business Plan in E-Commerce What Is a Business Plan? Your business plan will be used to show potential investors what you hope to accomplish and how you plan to get there. business plan a detailed description of a business’s objectives, products and services, operations, potential customers, and financial resources 20Section 8-2

21 Elements of a Business Plan 21Section 8-2 Cover Page Title Page Table of Contents Executive Summary Management Plan Company Description Product and Service Plan Mission and Vision Statements Industry Overview Market Analysis Competitive Analysis Marketing Plan Operations Plan Organizational Plan Financial Plan Growth Plan Contingency Plan Supporting Documents

22 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan The executive summary of your business plan is a brief but detailed description of the company’s mission, objectives, products, and competition. It is used to convince the reader that an operation is well-planned and has a good chance of success. 22Section 8-2

23 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan Your business plan should include forward-looking statements. forward-looking statements the parts of a business plan that describe the future of a company in both the short and the long term 23Section 8-2

24 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan Investors will want to know about the demographics of your Web site. Demographics include information about a customer’s age, income level, and location. This information is used to identify a target market for a business. 24Section 8-2

25 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan An income statement is an important financial statement. income statement summarizes a company’s revenue and expenses for a period of time and shows profits or losses 25Section 8-2 A balance sheet is another important financial statement. balance sheet shows how much a business is worth at a specific time

26 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan A balance sheet lists all of a business’s assets and liabilities and shows the net worth, or actual value of the business. assets all of the things owned by a business 26Section 8-2 liabilities debts or lawsuits

27 Revenue Models and the Business Plan in E-Commerce Elements of a Business Plan No matter how you choose to raise money, your business plan will serve as your primary set of credentials. If you don’t need to raise money, your plan will serve as a road map for success. 27Section 8-2

28 Revenue Models and the Business Plan in E-Commerce Section 8-2 Review What is a business plan? Why is it important? What is an executive summary? Why is it an important component of a business plan? What does an income statement reveal about a business? Why is it important? What are customer demographics? Why is this information important? 1. 2. 3. 28Section 8-2 4.

29 Revenue Models and the Business Plan in E-Commerce 29

30 Revenue Models and the Business Plan in E-Commerce End of Back to Table of Contents


Download ppt "Revenue Models and the Business Plan in E-Commerce Back to Table of Contents."

Similar presentations


Ads by Google