The revenue model of an e-commerce website principally consists of sales, transaction fees, subscription fees, affiliate fees and advertising fees. Google, Amazon.com and eBay are successful e-commerce websites which we will look at in analyzing their revenue model.

Google is an example of a very successful online search engine and targeted advertising website. It has two primary advertising programs are AdWords and AdSense–both paid search products, a form of online advertising that displays text ads that are based on the context of a website or a particular search query.

Google does not charge consumers for its search capabilities, instead their revenue are generated primarily from AdWords and AdSense delivering online advertising and a small portion from licensing its search technologies to enterprise companies.

 

 

Being an advertising website, Google does not collect advertising fees for advertisement banners, revenue is generated from affiliate fees base on performance, on cost per click or per thousand impression basis.

 

Amazon.com is America’s largest online retailer selling all kinds of merchandise, including books, VHS, DVD, music CDs and MP3s, computer software, video games, electronics, apparel, furniture, food, toys, etc. It is the company that successfully popularizing on-line shopping.

Through selling various kinds of merchandise online, Amazon.com revenue model consists of sales, transaction fees and subscription fees. Amazon.com charge $40 subscription fees per month on users who sign up the Pro Merchant. Users who sign up for the Pro Merchant program are not required pay transaction fees for every transaction processed by Amazon.com.

Amazon.com will only charge transaction fees and sales on non-Pro Merchant users when their items are sold. Once an item is sold, Amazon.com will be responsible for collect sales price and shipping costs from the buyer. Amazon.com then deducts a 6% to 15% (depending of the type of item sold) of the sales price. Amazon.com also charges transaction fee on the basis of per-transaction at $0.99, and a closing fee varying with the type of trade and items traded.  

eBay is an online auction and shopping website applying the e-commerce business of B2C and C2C, where businesses and people trade variety of merchandise and services online.

eBay generated their revenue mainly through transaction fees, listing fees and subscription fees. When users sell on eBay, eBay will charge an insertion fee on users for listing their selling items on eBay based on the item starting price and a Final Value Fee (equivalent to closing fee in Amazon.com) once an item is sold. The Final Value fee eBay charge depends on the selling price of the items sold, thus the higher the bid price, the hire the closing fee eBay will charge on seller.

eBay also collects subscription fees for users’ monthly subscriptions or other fees that are applied once a month, such as eBay Store subscriptions, seller tool subscriptions, late fees, and declined payment fees.

There is also charges of other optional fees for any additional features for displaying selling items on eBay such as listing upgrade fees, and additional eBay picture hosting fees