When we talk about search engine, online auction and online shopping; what is the website that will come in mind for the three activities? Of course, it would be Google.com, ebay.com and amazon.com.
While we are enjoying all the services provided from this website, ever wonder what is their revenue model?
This e-commerce company is actually gaining their profit through the product and services they provide.
Google.com is an e-commerce company that provides user with free search engine service to enable easy and convenient information searching. Although the company is providing free services they earn their profit through advertising. Their profit from advertisement is generated through two different models which is “pay-per-click advertisement” and “per-thousand-ads-displayed”. The function of the “pay-per-click advertisement”: whenever a user click on the advertisement that is published on the webpage, Google will charge an amount that is set by the advertiser and the charges will be accumulated throughout
the time until it reach a certain sum only Google will charge the advertiser. On the other hand, the “per-thousand-ads-displayed” will charge the advertiser for every thousand advertisement that Google post on the WebPages.
In order for this revenue model to function it is work under two programmes which are the AdWords and AdSense which helps Google to post the link of the advertisement and almost 90% of the Google revenue is generated from AdWords programme.
Read more information on the Google’s revenue model.
eBay.com which is one of the most popular online auction e-commerce company in today. The company had changed the auction activity into a whole new dimension where everyone can participate and any item can be place into auction. eBay.com generate their revenue through fees charged on the seller in accordance to the item and price set. The fees include insertion fees and final value fees. The insertion fees is a listing fees that eBay charged the seller for listing their item on sales. This fee is charged on the seller account at the time of the listing. This is actually the same concept for seller selling their house through a real estate agent where they will charge fees for listing through their agency advertisement. The final value fees are same as the transaction fees. These fees are a commission fees that will be charged on the seller’s account when the item listed successfully bid. In an easier way to explain, the final value fees are just like a normal commission fees that is charged on the seller for successfully sell their item.
Read more information on the eBay revenue model, insertion fees and final value fees.
one of the successful e-commerce companies in the world. Amazon had started from an online book seller and evolved to online shopping where user could find item from books to fashion to new gadgets. It revenue model is almost similar with eBay however revenue model includes:
Transaction fees - $ 0.99 (per-transaction)
Commission - the rate of commission is vary on different types of merchandise
Variable closing fee - the price is vary from different type of merchandise
These fees are charged on the seller account.
Get more information on amazon.com fees charges
Between this three giant e-commerce company, they are using different revenue for the business to generate income. Google has been successful on its revenue model with the helps of its two programme that enable user smooth surfing and attract user. With the vast population, advertising in Google could attract more customer for the company and the fees charges to the advertiser are quite fair and with the pay per click the rate are set by the client itself. Comparing to eBay and amazon, which deal more on transaction, they are highly depended on the commission and other fees that are charge on the seller. Both eBay and amazon has set a standard rate of commission for different type of product. However, eBay does charge the seller for listing their product and the charges are not refundable. On the other hand, amazon charge the seller on the variable closing fees.
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