e commerce revenue models
TRANSCRIPT
Presented by Kaung Myat Htut
Global Entrepreneurship Week 2016
National Enlightenment Institute (NEI)
20th November 2016
Web Catalog
Digital Content
Advertising-supported
Advertising-subscription mixed
Fee-for-transactionFee-for-transaction
Fee-for-service
Web Catalog Revenue Model
• Key characteristics– Adaption of mail order catalogue
– Mail order business expanding operations on the web
– Firms with physical stores offering online capability– Firms with physical stores offering online capability
– Access to customers throughout the world
– Enable customers to complete payment via phone or
mail if required
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Business Using Web Catalog Models
• Computers and consumer electronics
• Books
• Music and videos• Music and videos
• Luxury goods
• Clothing
• Flowers and gifts
• General discounters
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Digital Content Revenue Model
• Key characteristics– Used by firms that own rights to information
– Highly efficient distribution mechanism
– Flexibility in purchasing information including – Flexibility in purchasing information including
subscriptions or one-off payments
– Information can be customized to meet user’s
requirements
– Electronic distribution offers cost benefits over printed
matter
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Businesses Using Digital Content Models
• Providers of legal information services
• Access to digital copies of published
documents
• Subscriptions to academic journals
• Access to bibliographic database
• Subscriptions to digitized news sources
and magazine content
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Advertising-supported Revenue Model
• Key characteristics– Similar to that used by network television
– Advertising revenue pays for content development and
deliverydelivery
– Requires specific groups of visitors and targeted
advertising messages
– Problems with how to measure and charge for number of
site visitor views
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Business Using Advertising-Supported
Models
• Web Portals– Yahoo!
– AOL– AOL
– MSN
• Newspaper publishers
• Targeted classified advertising
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Advertising-Subscription Mixed Revenue
Models
• Key characteristics – Model originally used by traditional print newspapers and
magazines
– Subscribers pay a fee and accept some level of – Subscribers pay a fee and accept some level of
advertising
– Level of advertising is far less than on advertising-
supported sites
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Business Using Advertising-Subscription
Mixed Models
• Online editions of newspapers and
magazines
• Advertising used to part fund the website
• Payment for article retrieved from archive • Payment for article retrieved from archive
• Subscription to print version of magazine
gives free access to online version
• Access to member-only sections of sports
news sites
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Fee-for-Transaction Revenue Model
• Key characteristics– Business offers service for which they charge
– Scale of charge dependent upon number or size of
transactions processedtransactions processed
– Provides personal service
– Provides service at competitive rates compared to
traditional providers
– Commonly referred to as re-intermediation
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Businesses Using Fee-for-Transaction
Models
• Travel agents
• Car sales
• Stockbrokers
• Insurance brokers• Insurance brokers
• Event tickets
• Estate agents
• Online banking services
• Online music
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Fee-for-Service Revenue Models
• Key characteristics – Fee charged for service offered
– Fee based on the value of the service provided
– Often related to entertainment and leisure activities– Often related to entertainment and leisure activities
– Increasing interest from professionals
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Businesses Using Fee-for-Service Models
• Online games sites
• Delivering video content to subscribers
• Professional services offering advice:• Professional services offering advice:– Doctors
– Lawyers
– Accountants
– Engineers
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Revenue Strategy Issues – Channel
Conflicts
• Website sales can have a negative
impact on established outlets and
networks
• Known as cannibalization• Known as cannibalization
• Requirement to coordinate presence
across all distribution channels
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Revenue Strategy – Strategic Alliance
• Companies join forces to sell on the web
• Can increase speed of entry into a market
• Websites can join with channel distribution
management companiesmanagement companies
• Channel distribution manager develops
specialist knowledge of a product line
• Channel manager takes a percentage of
the sales volume as a fee
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