Identify and compare the revenue model for Google, amazon.com and eBay.

Every company has its own Business Model in helping the company to generate revenue from various ways in order to sustain in the future. Business model must specify two things which are the value proposition and revenue model. Value proposition is the benefits that a company can derive from using e-commerce. On the other hand, a revenue model is a description of different techniques used in a company on how that particular company will earn revenue. There are five common techniques which are usually used in the commercial world nowadays. These include sales, transaction fees, subscription fees, advertising fees and affiliate fees.

From what I had noticed from Google, Amazon and eBay’s website, I found that each of this website has its own way to generate income. Google, a search web with its search engine attracted many loyal web searchers by providing simple and easy usability web search services for its web searchers. The number of internet users is growing since the day Google had officially launched. Whenever the web searcher click on the result from the Google’s search results or Google content network, Google automatically earned affiliate fees either through a cost-per-click scheme or a cost-per-view scheme.

While being a company which its primary business activity is in the web search arena, Google also earn advertisement fees from the advertisement from those companies that wish to advertise their products to the public. After Google purchased a radio advertising company “dMarc” which provides an automated system for companies to advertise their products on the radio, its allowed Google to combined two main advertising media which are the internet and radio.

Besides, Google also earned other source of revenue such as the revenue from the web-based e-mail service which known as Gmail or Google Mail. It helps Google generate revenue by displaying links and advertisement that are tailored to the content of the e-mail messages displayed on screen.

Secondly, the eBay website, a website that provide an electronic market place for the sellers to list all items they wish to sell on internet and buyers to bid on items they interested based on the items listed by the sellers. Items posted by the sellers will be arranged based on its own category and buyers will browse through all the listed items.

Basically the services that eBay actually provided is the auction services and eBay earned its revenue from affiliate fees and transaction fees. eBay generate affiliate fees as the buyers click on the items posted by the sellers for auction purposed. Once the item is successfully sold, a final value fees will be charged against the seller’s final sale price. Usually it is ranges from 1.25% to 5% of the final sale price. The more the sellers sell his/her products, the more the eBay can earn this final value fees from the sellers. This is considered as part of the transaction fees.

Moreover, eBay generate its revenue from other source of income which are the insertion fee, additional listing options fee and final value fee. Insertion fee is a non-refundable fee. It is charged against the sellers once an item is listed on eBay. The amount of insertion fee charged is depending on the seller’s opening bid on the item. If the seller which to promote his/her item in a different way such as highlighting or bold the name of the listed item, an additional listing options will be charged against the seller.

Lastly, the Amazon website, a website that sell goods and products to its consumer by using an internet basis. It is most likely a supermarket, the only different is it held on the internet, the sellers and buyers will not be meeting each other and every transaction will be on computer and internet based. Since it is not much different with a supermarket, they way Amazon generates income also most likely a supermarket style.

Amazon earn its revenue in sales, once Amazon sells its goods and products, it earned revenue from what it had sold. Follow by the transaction fees, Amazon earned income on the variable basis, depending how many goods or products it had sold. The more the goods and products are being sold, the more income the Amazon earned. Besides these two ways, Amazon does advertise some of the companies’ advertisement. By dong so, Amazon manage to earned the advertising fees.

In short, Google, eBay and Amazon has their own ways in generating their revenue. The major different between Google, eBay and Amazon is on the services provided by each of the website. Google is a website that is totally different from eBay and Amazon because Google provide service for its users for searching the information which is globally available whereas eBay and Amazon only provide services for its users for searching items that are available in its database. Another major different between Google and others is Google do not provide places for business dealing such as making the sellers and buyers to meet up whereas eBay and Amazon major function is the selling and buying process.

By making comparison between eBay and Amazon, although both of these two websites providing a quite similar services but they are different. For eBay, it is a auction based where else for Amazon, it is a deal transaction based. Meaning to say, for eBay, the selling and buying process is between individual and individual. Individual posted items they wish to sell off and another individual buy for that particular item. For Amazon, the selling and buying process is between business/firm and individual. Firm sells the goods and products for a fixed price and whether or not to purchase the item is all depends on the consumers themselves.

As a conclusion, Google, eBay and Amazon run their business on different ways and having the different business line but the way they generate revenue more or less are the same, which fall back to the five common techniques, sales, transaction fees, subscription fees, advertising fees and affiliate fees.