Browse Definitions :
Definition

revenue model

Contributor(s): Ivy Wigmore

A revenue model is a component of a company’s business planning that describes the way it intends to make money. The revenue model is an important element of an organization’s business model and business plan

Basically, the revenue model details on what the business will offer and how it will charge customers: What product or service it will offer, what it will charge for the product or service and the method it will use to generate revenue. 

Examples of revenue models include:  

Advertising (ad-based): A website or app owner can contract with marketers to place advertisements on their content.  

Manufacturing: Manufacturers create products and sell the finished goods.  

Markup: Resellers purchase goods, typically at a discounted bulk purchase price, and sell at a higher price.  

Licensing: Producers of software often charge a per-user licensing fee for use of their product over a specified time period. 

IT services provider: Less formally known as a body shop, an IT service provider or consultancy hires employees and subcontracts them out to other companies.  

Freemium: A basic but functional product is offered without charge and an upgraded version of the product made available for a price.  

 

 

This was last updated in July 2018

Continue Reading About revenue model

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

SearchCompliance

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

  • PCI DSS (Payment Card Industry Data Security Standard)

    The Payment Card Industry Data Security Standard (PCI DSS) is a widely accepted set of policies and procedures intended to ...

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

SearchSecurity

  • tokenization

    Tokenization is the process of replacing sensitive data with unique identification symbols that retain all the essential ...

  • incident response

    Incident response is an organized approach to addressing and managing the aftermath of a security breach or cyberattack, also ...

  • Federal Information Security Management Act (FISMA)

    The Federal Information Security Management Act (FISMA) is United States legislation that defines a framework of guidelines and ...

SearchHealthIT

SearchDisasterRecovery

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

  • cloud disaster recovery (cloud DR)

    Cloud disaster recovery (cloud DR) is a combination of strategies and services intended to back up data, applications and other ...

SearchStorage

Close