Points for building different revenue modelsRevenue Sharing Model -
Commonly used in cellular phones.Supplies (Disposable) -
The equipment can be borrowed for free or at a relatively low price. The main profit is generated from the sale of "consumables" or providing on going service for the use of equipment.SAAS Model -
Sale and access to licenses or rights to use the Company's software applications regularlyOEM Model -
Commonly used in hardware - integrating company products as part of larger systems in the manufacturing phaseRoyalties Model -
Royalty for the right to use the company's products. Revenue Sharing Model
A. Full calculation must be made while taking into account all the assumptions about the market, sales, and prices along with the company's expected share income according to the company's agreements. SAAS Model
In this model, the company develops a web platform or software application and allows its customers to use the software/web platform on a regular basis for a fee according to the amount of licenses / period of use by the customer.
The company needs to invest in the development and maintenance of the platform. You will need to quantify the budget spending. Maintenance expenses following the development are to be considered as part of the cost of sales / service.
The company for the purpose of estimating revenue must take into account, among other things, the following parameters:
a. The number of potential customers should be divided according to the scope of their use (large, medium, small). The difference between customers can be shown by the number of licenses or other activity metrics.
b. Type of service (free, professional, premium)
c. Prices according to each service type or license type
d. Attention should be paid to customer aquistion and retention rates
e. You will need to check and asses revenue estimates from the very beginning, training, and implementation of the system. In addition the cost of revenue from the adjustments for specific customers needs to be checked. Model OEM
In this revenue model, this physical product or software product or other intangible product of the company is integrated within the product or system and sold by another company.
Usually the company is only eligible for revenue after the sale to the end customer.
The company must be certain that it has the ability to track the quantities sold by the distributing company to the end customer.
There will be questions regarding the exclusivity for the selling company as well as a minimum sales commitment by the selling company (and the company's commitment to supply the required quantities).
When there is no exclusivity agreement, you should request from the selling company an estimate in terms of their expected sales for budgetary purposes.Back