ASSIGNMENT NO 1

E-COMMERCE

SUBMITTED TO: DR ARSLAN

SUBMITTED BY: HAJIRA ASIF

NATIONAL DEFENCE UNIVERSITY

QUESTION NO 1
From the models studied in class today, what model is more suitable for start-
ups?
Never before has the e-Commerce market been as flexible and expansive. The digital
environment has provided flexible ways to put up your e-commerce income model in the array
and reach out to your audience much more easily in response to the recent growth in worldwide
companies, technical improvement, and the number of individuals following online shopping.

The internet has only been around for 25 years, but it already puts the entire market at your
fingertips. This has created a branching path for e-commerce, enabling users to create various
online businesses that are grouped into broader areas. But first, let's update our definition of an e-
commerce business before we classify various e-commerce, business models.
The e-commerce revenue model is typically taken into account when categorizing an e-
commerce business because revenues represent the total amount of money that the business
receives after exchanging goods or services with its clients. There are numerous ways to create
income, including

 Advertising revenue model

 Subscription revenue model
 Transaction fee revenue model
 Sales Revenue Model
 Affiliate Revenue Model

The optimal income model for your company will depend on the goods or services you offer,
what other companies in your sector are doing, and how clients are most likely to find your
offerings online. Every e-commerce has its advantages but we are discussing here the most
suitable model for startups, so the best-suited model according to the research is the transaction
fee revenue model.
AFFILIATE MARKETING REVENUE MODEL
The affiliate marketing model works for services and both physical and digital products. If you
own the business, you build a network of affiliates who promote the product and receive a
percentage of each sale they deliver to you. The upside is that you can reduce or eliminate
advertising costs, vastly increase your market reach and appeal to niche markets by carefully
selecting affiliates . 
TRANSACTION FEE REVENUE MODEL:
In the transaction fee revenue model, the e-commerce business charges a fee to a seller for every
transaction made through them. They are the payment companies that provide payment gateway
services to other e-commerce business platforms. Generally, the profit is derived through
enabling or executing transactions. 
A number of businesses mostly rely on this revenue model to get maximum output. This strategy
is one of the more straightforward ones because it involves a business offering a good or service
and receiving payment from clients. There are a number of advantages of this revenue model and
of which many startups prefer this model for revenue generation.
 The ease of use and variety of options make this experience more appealing to
consumers. Amazon is the best example and it uses this transaction fee revenue model.
 Every time an item is sold on eBay, sellers are charged a fee; the same is true for PayPal
users when sending money; the same is true for eTrade when selling stocks; and so forth.
 Although fees are often low, if there are hundreds of transactions each day, the revenue
might be enormous.

So we can see that many major businesses in the market use this revenue model to get higher
returns, but every business has to choose its model according to its product or services
requirement.