Analysis of E-Business Revenue Models in K.S.A. for ECOM 421

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This essay provides an in-depth analysis of e-business revenue models utilized by companies operating in the Kingdom of Saudi Arabia (K.S.A.). It begins by introducing the fundamental concept of e-business revenue models, emphasizing their significance in the digital marketplace. The essay then delves into three primary revenue models: advertising, subscription, and affiliate marketing. For each model, the essay offers a detailed explanation of its mechanics, including how revenue is generated and the specific strategies employed by businesses. Furthermore, the essay meticulously examines the advantages and disadvantages associated with each revenue model, providing valuable insights into their respective strengths and weaknesses. The discussion includes real-world examples of K.S.A.-based companies that have successfully implemented these models. The essay concludes by summarizing the key findings and highlighting the evolving landscape of e-business revenue generation in the K.S.A. market.
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E-BUSINESS REVENUE MODEL
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E-BUSINESS REVENUE MODEL
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E-commerce business is referred to vending, purchasing, and making the transaction on
internet in digital market. The product and amenities are presented by website, application, and
digital signage methods which are incorporated by the secured payment gateway by facilitating
financial transaction and product purchase. The front end of the organization is as important as
the back end. E-commerce organization plans revenue models in many ways. E-commerce
businesses have become more elastic and broader. E-commerce business revenue model has seen
the high level upsurge through the technical advancement, online spending, digital space, and
opened flexible options to reach out the customers (ZeePedia, 2020).
E-commerce revenue model is considered to classify E-commerce trade as revenues
present the whole amount of money which is received by organization after the trading of
product and services with the customers. There are many options from which revenue can be
made through affiliate marketing, advertising, subscription and many more. Industry never limits
upcoming new ways to generate revenue. Following are the E-commerce business revenue
models used by organizations in K.S.A.
Advertising business revenue model
Commission charged to promoter to put advertisement in appropriate online marketing platform
(Smith, 2020). It is classic principle which is followed for the business categorization, for the
advertising business revenue model. It help to take the advantage of high traffic that
continuously visit to chosen platform regarding shopping, see the advertisement and redirected to
real site. It is related to increase the leading way of business such as Haraj, Souq, and Cobon.
The disbursements are made to host platform which are based on the permanent commission or
decided according to the traffic density.
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E-BUSINESS REVENUE MODEL
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(Huang, and Benyoucef, 2013)
Advertisement business revenue model has the advantage as present the indirect way to earn
revenue by digital platform and conventional way to put advertisement by including the display
marketing and include the banner, wallpaper, and rectangular advertisements. The structure of
the income is based on invoice raised against cost per action. The continue display of marketing
strategies have the objective to address from where traffic coming on Ecommerce platform and
linked to the search engine marketing and affiliate marketing. Google AdSense is effective
option which allows placing advertisement by Google search engine and allowing to bringing
business site to top of the search results while searched through related keywords. Similarly
platforms such as Facebook allow to displaying the advertisement on the basis of Cost per Mile.
Advertisement business revenue model has the disadvantage as increase the production cost with
no assurance regarding income and click by ratios are very low, that contribute to the falling
values of advertisement. It is very important to have the large and loyal following to the
command higher compare to the rates of market. Research presents that consumers tune out to
many advertisement forms on platforms (Al-Mudimigh, 2015).
Subscription business revenue model
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There is unlimited services are enjoyed on the Netflix, Amazon Prime, and YouTube Premium.
These all charge from users and subscribers on the basis of particular time, monthly, and yearly
services. The services of organizations include music, videos, magazines, special services and
many more that offer subscribers for the price to watch and get latest edition. Internet services
providers are familiar with annual and monthly subscription through the broadband connection
that enable subscribe to enjoy unlimited services. Many organizations such as Aliexpresss, Jarir,
and Extrstores offer the subscription to avail the additional services which get the subscription to
access short notices, updates and newsletters. These updates are conveyed to customers directly
to belonging account.
(Barnes, and Hunt, 2013)
Subscription business revenue model works regarding contents, services, and products.
Consumers sign up and pay until the cancellation. It has the advantage as include the steady
revenue stream which built in base to increase sales and consumer’s inertia that minimizes the
dissolutions.
Subscription business revenue model has the disadvantage as use of every shipment billing
procedure offers the opportunity regarding cancellation and businesses are required to deal by
the lag time to minimize production after the dissolution.
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Affiliate business revenue model
Affiliate business revenue model deal with the organizations which follows the commission
principle. Vendors and merchants partner up with effectively known Ecommerce platform to
advertise and sell good and give the percentage of profit as the commission. This is known very
effectively for inviting and driving quality leads within the businesses such as Opensooq and
Marvip. This kind of process works as the ling which is hyperlinked to associate and archived on
the host platform which get regular traffic. The user who clicks to the associate link directed to
the website where services and products are cataloged. These pay the commission to host
operation which carry link for traffic. Affilinet are one of the effective examples which affiliate
links of product and drive the traffic. For every lead driven regarding website it is important to
pay the particular percentage as commission. These use many variations like revenue sharing
program which aim to drive audience from one to another platform.
Affiliate business revenue model has the advantage as works for facilities such as physical and
digital goods. This creates linkage of associates that endorse the product. This minimizes and
eliminates the cost of advertising and accelerates the reach within marketplace and more appeal
to niche market through effectively choosing the affiliates.
(Chang, and Graham, 2012)
Affiliate business revenue model has the disadvantage as organization is required to pay the
commission and affiliate behavior can damage the reputation and it can be typical to fill and
services is get high level of sales. This present the uncertain revenue stream cannibalization of
product is similar and risk to the reputation is high while consumers are ill-fated and risk is high
for merchant if not pay the commission.
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In the limelight of the discussion it is concluded that most of the business in today’s time
uses the many way to rule on physical and online market. It also increases the scope to defining
the new ways of doing the business on the internet. This is also present that more business will
be established for the online Ecommerce market. Further discussion cover the detailed
description with the advantages and disadvantages of advertising, subscription, and affiliate
business revenue models.
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E-BUSINESS REVENUE MODEL
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Bibliography
Al-Mudimigh, A.S., 2015. E-business strategy in an online banking services: a case study. The
Journal of Internet Banking and Commerce, 59(06), 85-96.
Barnes, S. and Hunt, B. eds., 2013. E-commerce and v-business. Routledge.
Chang, K.P. and Graham, G., 2012. E-business strategy in supply chain collaboration: An
empirical study of B2B e-commerce project in Taiwan.International, Journal of
Electronic Business Management, 10(2), 101-102.
Huang, Z. and Benyoucef, M., 2013. From e-commerce to social commerce: A close look at
design features. Internation Journal of Business Management, 12(4), 246-259.
Smith, N., 2020. Advantages and Disadvantage of Different Business Revenue Model. [Online]
Available at: https://smallbusiness.chron.com/advantages-disadvantages-different-
revenue-models-74343.html
[Accessed 12 03 2020].
ZeePedia, 2020. E-business Revenue Model. [Online]
Available at: https://www.zeepedia.com/read.php?e-business_revenue_models_e-
commerce&b=10&c=30
[Accessed 12 03 2020].
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