Types of Revenue Models
- Ad-supported Revenue Model: The ad-supported revenue model generates revenue by displaying advertisements to users. This model is commonly used by social media platforms like Facebook and Instagram, as well as search engines like Google.
- Licensing Revenue Model: The licensing revenue model involves granting permission to others to use a company's intellectual property, such as patents or trademarks, in exchange for a fee. Examples of this include the licensing of software by companies like Microsoft, and the licensing of characters by companies like Disney.
- Affiliate Revenue Model: The affiliate revenue model involves earning a commission for promoting another company's products or services. This is commonly used by bloggers, influencers, and affiliate marketers.
- White-labeling Revenue Model: The white-labeling revenue model involves selling a product or service under another company's brand. This is commonly used in the software industry, where one company may provide a white-labeled version of their product to be sold by another company.
- Freemium Revenue Model: The freemium revenue model involves offering a basic version of a product or service for free, while charging for premium features or content. Examples of this include Dropbox and Spotify. Make sure to read the blog on Better than Free here
- Subscription-based Revenue Model: The subscription-based revenue model involves charging customers a recurring fee for access to a product or service. Examples of this include Netflix and Amazon Prime.
- Consumption-based Revenue Model: The consumption-based revenue model involves charging customers based on how much they use a product or service. Examples of this include utility companies, such as electric and water companies.
- Brokerage (Commission-based) Revenue Model: The brokerage revenue model involves earning a commission for facilitating a transaction between two parties. Examples of this include real estate agents and stockbrokers.
- Hidden Revenue Model: The hidden revenue model involves generating revenue through methods that are not apparent to customers. Examples of this include data mining and advertising.
- Razor and Blade Revenue Model: The razor and blade revenue model involves selling a product at a low or discounted price, while charging a premium for accessories or replacement parts. Examples of this include razors and printers.
- Donation Revenue Model: The donation revenue model involves earning revenue through donations from customers or supporters. Examples of this include non-profit organizations and fundraising websites like GoFundMe.
- Arbitrage Revenue Model: The arbitrage revenue model involves earning a profit by exploiting price differences in different markets. Examples of this include currency trading and stock trading.
- Data Sales Revenue Model: The data sales revenue model involves generating revenue by selling customer data to other companies. Examples of this include data brokers and credit scoring agencies.
- Transactional Revenue Model: The transactional revenue model involves earning revenue by charging a fee for each transaction. Examples of this include credit card companies and PayPal.
- Rental or Leasing Revenue Model: The rental or leasing revenue model involves earning revenue by renting or leasing a product or service for a set period of time. Examples of this include car rental companies and equipment rental companies.
- Borrow / Lending Revenue Model: The borrow/lending revenue model involves earning revenue by charging interest on loans or earning interest on money that is loaned out. Examples of this include banks and peer-to-peer lending platforms.
- Product is Free, But Services Aren’t: The product is free, but services aren't revenue model involves offering a product or service for free, but charging for additional services or features. Examples of this include mobile games and social media platforms.
- Direct Revenue Model: The direct revenue model involves generating revenue by selling products or services directly to customers. Examples of this include retail stores and eCommerce websites.