Define Your Revenue Model
Identify how you will generate revenue from your Web site.
There are several basic approaches to producing revenue on the Web:
- Direct Sales:
Your revenue comes from selling products or services. Profit comes when
you can sell your products at your target price. The cost to design and
operate your site is figured into your overall expense figure.
- Indirect Sales:
Your revenue comes indirectly from your site content through sales of
advertising space. This approach works well when your web site offers
appealing content that attracts visitors. By attracting a large number
of visitors and a desirable visitor type, you make your site appealing
to advertisers. Your advertising rates will depend on the number of
visits your site gets and the type of visitor.
Another variation of the indirect model is to provide
space on your site for associate buttons. Associate programs pay you a
referral fee when someone leaves your site, goes directly to their site
and then buys something.
- Licensing/Selling Content:
Your revenue comes from licensing or selling your content to other
sites. "Content" can be feature articles, weekly columns, polls, etc.
-- anything that keeps people connected to a site. Good content makes a
site "sticky" - meaning that people stay on it and don't click off to
another site.
Example: Travel sites sell air, hotel and
rental car tickets - they want visitors to stay connected (which ups
the likelihood that make a purchase), so they provide content that is
related to their products. These sites lease weather reports, and they
create affiliates with hotels, airlines and rental car agencies. These
added benefits create repeat visitors because they can find everything
they need at one site.
Answer these questions to define your e-biz revenue model:
- What is my eCommerce strategy for making money on the Web?
- Who is the customer in my revenue model? Describe what benefit your customer will get from your eBusiness.
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