Revenue Model
Originally published: 24/05/2023 13:19
Publication number: ELQ-78798-1
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Revenue Model

A revenue model is a plan for earning revenue from a business or project. It explains different mechanisms of revenue generation and its source's plan for work.

Description
 Since selling software products is an online business, a plan for making money from it is also called an eCommerce revenue model.
The simplest example of a revenue model is a high-traffic blog that places ads to make money. Web resources that present content, e.g., news (value), to the public, will make use of its traffic (audience) to place ads. The ads in turn will generate revenue that a website will use to cover its maintenance costs and staff salaries, leaving the profit.
Revenue models are often confused with business models and revenue streams. To avoid any misinterpretations, let’s quickly define these three terms that form a business strategy.
Revenue model vs business model
A business model (BM) is a broad term outlining everything concerning the main aspects of the business, all of which are contained in the answers to the following questions. 
Numerous forms of business models can’t be classified in a single list because each part is highly individual to the industry, type of product/service, audience, or profitability. A revenue model is used to manage a company’s revenue streams, predict income, and modify revenue strategy. The revenue itself is one of the main KPIs for a business. Measuring it annually or quarterly allows you to understand how your business operates in general and whether you should change the way you sell the products or charge for them.

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