ECOM 421: Second Semester Essay on E-Business Revenue Models

This essay provides an overview of e-business revenue models, discussing various types and their respective advantages and disadvantages. The introduction defines e-commerce revenue models as plans for generating profits for online businesses, differentiating them based on their similarities to traditional businesses. It outlines the advertising, subscription, transaction fee, and sales revenue models, providing examples of each. The essay then explores the benefits of e-business models, such as lower costs and wider reach, alongside their drawbacks, like the lack of personal interaction and security concerns. The essay concludes with a discussion of how these models are employed by companies in KSA.

Running Head: E-Business Revenue Model
E-Business Revenue Model
Name of the Student:
Name of the University:
Author’s Note

1E-BUSINESS REVENUE MODEL
Introduction
E-commerce returns model can be defined as a plan for generating profits for any online
business (Laudon & Traver, 2016). The models are divided on the basis of similarities with
mortar and brick businesses where it enables the customer to reach around the sphere and
recommend more varied models of generating sales.
Types of E-Business Revenue Model
The following are different types of revenue model:
 Advertising Revenue Model: it is a direct way of earning revenue in the digital platform
which includes the banner, regular ads, wallpaper and skyscraper.
 Subscription Revenue Model: this is used by most of the online services which comprise
of charges on an interval basis (Trad & Kalpić, 2016). The service offering includes
music, video, TV channels and magazine.
 Transaction Fee Revenue Model: this model uses the platform of ecommerce which
relies on the transactions and includes the vendor to be too registered. A good example
of transactional revenue model would be Pay Pal.
 Sales Revenue Model: this model is mostly used by the wholesalers and retailers who sell
their product via internet and intends to reach and cater large audience. The prices are
competitive among all the retailers in the market along with comparison with the actual
store.

2E-BUSINESS REVENUE MODEL
Advantages and Disadvantages of E-Business Revenue Model
Some of the advantage of E-Business Model is as follows:
 Cheaper than traditional Business
 No geographic boundaries
 Online business grants the benefits from government.
 With the help of the software it is easy to set up as it can be handled even sitting
back home (Aithal, 2016).
Some of the disadvantage of E-Business Model is as follows:
 Short of individual touch as one cannot tap and feel the product. It becomes
complex for the clients to check the quality of the product.
 There is a factor of security issue as people cannot rely with the financial details
shared while making a purchase.

3E-BUSINESS REVENUE MODEL
Reference
Aithal, P. S. (2016). A Review on various E-business and M-business models & Research
Opportunities. International Journal of Management, IT and Engineering, 6(1), 275-298.
Laudon, K. C., & Traver, C. G. (2016). E-commerce: business, technology, society.
Trad, A., & Kalpić, D. (2016). The E-Business Transformation Framework for E-Commerce
Architecture-Modeling Projects. In Encyclopedia of E-Commerce Development,
Implementation, and Management (pp. 733-753). IGI Global.