Breakdown of revenue model — E-commerce
This is the second article in the series “How do companies make money?”. These articles will cover different industries and will give a snapshot view of revenue models for different companies in a particular industry.
*Links for other articles at the end of article.
To breakdown revenue model from a particular industry one needs to understand the core business model prevalent in the industry, know the key players’ positioning — old and new, understand how companies have been diversifying in the industry and note how new trends and business models are disrupting the industry.
Most companies in an industry specialize in one offering. Then as competition increases these companies start diversifying. We also see other new players coming in who are either category specialist (verticals) or are heralds of change (new business models).
Another way of adding revenue streams is to assess how your product is being used and the various stakeholders involved and see if collaborating with them you can enhance your ecosystem and monetize this interaction. eg: Social Media App — The various stakeholders would include users, brands, content creators, sellers etc. Ways social media app monetizes these interactions :
Brands
i. Partnerships
ii. Exclusives
iii. Advertising
Content Creators
i. Virtual Gifting
ii. Subscriptions
iii. In-app purchases
Sellers
i. Transaction Sales
ii. Advertising
E-commerce Revenue Model Comparison — India
E-commerce Revenue Streams :
Listing Fee — Fee that sellers have to pay to list their products on eCommerce platforms
Transaction Fees — Sellers are charged commission fee for every sale
Advertisement — Advertising space on website is sold to sellers
Subscribe and Save — Allows customers to subscribe to products they need on a recurring basis
Membership Subscription — Recurring charges for continued access to its products or services. Subscriptions have a monthly or annual fee and help generate recurring revenue.
Gift Card —Cards purchased by customers for gifting purposes. The receiver may redeem the gift card amount on their purchase.
Private Label — Private label products produced by a third-party and sold by retailer under its own brand name.
Nyka — Nykaa Naturals, Nykaa Cosmetics, Kay Beauty, Nykd by Nykaa, 20 Dresses, RSVP, Mondano, Likha, Pipa Bella
Myntra — Roadster, HRX, Dressberry, Mast & Harbour, All About You, Moda Rapido, and Anouk
Logistics — Logistic company started to support the logistic needs of the e-commerce company.
Flipkart — Ekart was established in 2009, as Flipkart’s in-house supply chain arm.
Pay Later — Allows consumers to make purchases and pay for them at a future date
Check out revenue models for other industries :
