NevBlog

Neville's Digital Surrogate Brain

Business Models

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  1. Subscription Model
    • Example: A streaming service charges $10/month per subscriber. If the cost to serve each subscriber is $4/month, the profit per subscriber is $6/month.
    • Real World Company: Netflix.
    • Revenue: Netflix reported revenue of approximately $29.7 billion in 2022.
  2. Freemium Model
    • Example: A productivity app offers basic features for free and charges $5/month for premium features. Assuming 1000 users with 10% upgrading, the revenue is $500/month.
    • Real World Company: Spotify.
    • Revenue: Spotify reported revenue of approximately €9.67 billion ($10.9 billion USD) in 2022.
  3. E-commerce Model
    • Example: An online store sells a product for $50 with a COGS of $30. The profit per product sold is $20.
    • Real World Company: Amazon.
    • Revenue: Amazon reported revenue of approximately $514 billion in 2022.
  4. Affiliate Marketing Model
    • Example: A blog earns $10 for each sale through its affiliate link, with a conversion rate of 2% from 100 clicks, earning $20.
    • Real World Company: Wirecutter (A New York Times Company).
    • Revenue: Specific revenue for Wirecutter is not publicly disclosed, but it operates on affiliate marketing revenue.
  5. Ad-based Model
    • Example: A website earns $0.50 per 1000 views (CPM). With 500,000 views, the revenue is $250/month.
    • Real World Company: Google (primarily through AdSense).
    • Revenue: Alphabet (Google’s parent company) reported revenue of approximately $282.8 billion in 2022, with a significant portion from advertising.
  6. SaaS (Software as a Service) Model
    • Example: A tool charges $100/month with a COGS of $20/month. The profit per customer per month is $80.
    • Real World Company: Salesforce.
    • Revenue: Salesforce reported revenue of approximately $26.5 billion in 2022.
  7. Dropshipping Model
    • Example: A store sells a product for $20, purchases it for $10, with a $10 profit per sale.
    • Real World Company: Wayfair.
    • Revenue: Wayfair reported revenue of approximately $13.7 billion in 2022.
  8. Consulting Services Model
    • Example: A consultant charges $200/hour with costs of $50/hour. The profit per hour is $150.
    • Real World Company: McKinsey & Company.
    • Revenue: McKinsey reported revenue of approximately $10 billion in 2022.
  9. Franchising Model
    • Example: A franchisee pays $10,000 upfront plus 5% of monthly sales of $20,000, making $7,000 after fees.
    • Real World Company: McDonald’s.
    • Revenue: McDonald’s reported revenue of approximately $23.2 billion in 2022.
  10. Digital Products Model
    • Example: An e-book sold for $30 with a $1 transaction fee has a $29 profit.
    • Real World Company: Adobe.
    • Revenue: Adobe reported revenue of approximately $15.79 billion in 2022.
  11. Marketplace Model
    • Example: An online marketplace takes a 10% commission on a $500 transaction, earning $50.
    • Real World Company: Etsy.
    • Revenue: Etsy reported revenue of approximately $2.3 billion in 2022.
  12. Direct Sales Model
    • Example: A distributor buys products at a 25% discount and sells them at retail price, making $10 on a $40 product.
    • Real World Company: Amway.
    • Revenue: Amway reported revenue of $8.5 billion in 2022.
  13. Crowdsourcing Model
    • Example: A platform takes a 5% fee on a $100,000 project, earning $5,000.
    • Real World Company: Kickstarter.
    • Revenue: Kickstarter’s revenue is not publicly detailed but operates on this commission model.

 

  1. Subscription Model
  2. Freemium Model
  3. E-commerce Model
  4. Affiliate Marketing Model
  5. Ad-based Model
  6. SaaS (Software as a Service) Model
  7. Dropshipping Model
  8. Consulting Services Model
  9. Franchising Model
  10. Digital Products Model
  11. Marketplace Model
  12. Direct Sales Model
  13. Crowdsourcing Model
  14. Data Monetization Model
  15. Economy Sharing Model