E-CommerceJuly 24, 2015

Best Revenue Model for Ecommerce Startup

Best Revenue Model for Ecommerce Startup

Searching for the finest revenue model that suits your needs best is like choosing which horse is right for the race. Horses are basically made for running, similarly all revenue models can help you earn in your e-commerce startup, but which horse is fast enough to win the race?  That is the question you need to ask yourself, which revenue model can help you achieve your goals.

What To Do And What Not To

An e-commerce startup means that you communicate with the customers through internet and sell your merchandise which they buy from your online platform. Your traffic is your blood and flesh and without it you’re just a skeleton. With the ecommerce anatomy functions together the only thing stopping you from earning profits is injecting bad unnecessary revenue models. They do you no good, but instead drain other important resources that you need for the future of the company.

Things To Consider Before Applying Revenue Models

  • You need to make sure you have the undivided attention of the user. Squeezing revenue is not important but winning the trust of the user is. For future conversion rates it is a sound investment for your e-commerce startup
  • With the help of persona making, predict your traffic before employing any revenue models. Your traffic could be seasonal of gender oriented. Any mistake that oversteps any of the aspects can cost your e-commerce startup gravely

Choosing between the best revenue model requires careful analysis and research to make sure your business’s needs are fulfilled appropriately. Your organization might be new in the industry and several aspects that are the center for an e-commerce website need to be present in the revenue model you choose to incorporate.

1) Selling the Product or Service Correctly

One of the most effective and basic revenue model is selling your product. If you own software with powerful algorithms that have always managed to impresses customers then forget everything, you need to make the best of that software.

You may get benefit of FME’s Product Attachments Extension for Magento which will allow you to showcase your product along with pictures, videos, manuals, PPTs and other media types. This will allow you to impress your customers and hence increase your revenue and sales.

You may also get benefit of CSV Table Matrix Based Pricing – Extension of Magento by FME to show your product correctly in a number of dimensions and sizes if your product is of different sizes and dimensions. This will allow your customers to purchase your product according to their custom requirements.

Make Long Term Customers

Adding a little extra appeal to the application and making it available everyone everywhere. This is one of the oldest and most successful revenue models for any company operating at any capacity.  It is also very effective when the product or service is demanded in larger markets because it helps maintain long-term sales and trust in the product.

2)  Subscription Revenue Model

It is important that you have a service or a product that is eligible (meets the requirements of online selling) for your e-commerce website. When someone uses your service free for instance, an online money changing application that is always up to date and easy to use, you can always put a cap on its usage and add charges per hour.

Too Afraid To Change

Since people are already using it and are aware of the interface and functions, it will be a tough call to change loyalty and move to another product after you decide on adding subscription charges to it.

3)  Getting The Best From Affiliate Income

E-commerce stores throughout the world keep squandering the profits on marketing and advertising, when really you can literally sit and earn through affiliate income.

What is Affiliate Income?

Affiliate income is basically the revenues you will receive once you allow a third party to put up it’s add on your website given your website is popular in some way and has a good customer base. The more traffic your website gets the more you will earn as bigger ventures would like to work with you. By adding a small advertisement to your website about a famous product might as well get your own products selling.

4)  Direct Advertising

Direct advertising is rather a very simple way of gathering revenues. You choose a product from a company that has a sharp but steady demand internationally and then allow the company to upload it’s advertisement on your website.

Show Theirs And Sell Yours

By just giving them a small property permanently on you website you will start earning revenues almost instantly. Even if you have signed an extensive contract with the company, you can always add similar products on your page without being affected from the third party and receive greater sales altogether.

The more attention you have online the better the revenues. Finding advertisers is quite a challenging task and a good one can be very profitable.

5)  Contextual Advertising

The only drawback in this revenue model for your e-commerce website is the commission sharing clause. The rest of it is hassle free money making with least effort once you get your hands on the right tools from the Advertising agency for the contextual ads. The tools will carefully select the right type of ads your regular visitors like and the revenue will show up in the form of clicks and views of the page.

Better To Be Safe Than Sorry

Some e-commerce website owners consider this model a much safer option than direct marketing because it takes away the chances of failure from the equation. However, in direct advertising you don’t have to share a dime with anyone since all the revenue rests with you and your startup gets a better debut.

6)   Lead Generation model

This model uses collection methods to neatly gather user’s information and then bid those bundles to other companies interested in buying information of online users in order to set up their market. After collecting substantial amount of information your startup can have its revenue streams running in no time.

Advantages And Disadvantages

It’s basically give and take as well. In return of the services you provide for the clients, they provide you their information. Which then you later sell. That is where it gets a little tougher to wrangle. Folks are sometimes not comfortable with sharing their information and refuse to be a part of the website and damage the day to day traffic of the website drastically.

Use It or Lose It

These six methods to boost revenues for e-commerce startups are battles tested and approved by several accomplished companies. Without the proper application of revenue model in e-commerce business, your startup can cost you dearly while integrating one can help your revenues up the ceiling.