👓 Want To Upend An Entire Industry? Change Its Revenue Stream | Co.Design

Read Want To Upend An Entire Industry? Change Its Revenue Stream by Ryan Baum (Jump Associates) (Co.Design)

By looking at the eight possible revenue models you can reinvent a business.

There may be an infinite number of variations a company can use to make money, but they really all boil down into eight types:

  1. Unit sales: Sell a product or service to customers. GE uses this method when they sell microwaves.
  2. Advertising fees: Sell others the opportunities to distribute their message on your space. Google uses this method with its search product.
  3. Franchise fees: Sell the right for someone else to invest in, grow, and manage a version of your business. McDonald’s uses this method with its stores that are independently owned and operated as franchises.
  4. Utility fees: Sell goods and services on a per-use or as-consumed basis. Most electric companies use this model when they charge customers only for the electricity they use.
  5. Subscription fees: Charge a fixed price for access to services for a set period of time. Gold’s Gym charges a monthly or yearly subscription fee for people to access their gym.
  6. Transaction fees: Charge a fee for referring, enabling, or executing a transaction between parties. Visa charges a transaction fee to retailers each time a customer purchases a product in their store.
  7. Professional fees: Provide professional services on a time-and-materials contract. H&R Block makes money by charging customers for the time it takes to prepare their taxes.
  8. License fees: Sell the rights to use intellectual property. Every time a customer buys a T-shirt or a hat with the logo of their favorite sports team on it, that team makes money from license fees.

Hat tip: Ben Werdmuller

Syndicated copies to:

Leave a Reply

Your email address will not be published. Required fields are marked *

To respond on your own website, enter the URL of your response which should contain a link to this post's permalink URL. Your response will then appear (possibly after moderation) on this page. Want to update or remove your response? Update or delete your post and re-enter your post's URL again. (Learn More)