Day 21: Revenue Model

[Day 21/30: Product Manager to CEO 30 Day Challenge] It's time to get down to business.

When you're ready to start your own business, it can be a little overwhelming to decide which revenue model is right for you.

There are a lot of different ways to make money, and the type of business you're in will dictate which one is right for you. Here are some of the most common methods:

1. Subscription-based: This is where users pay a monthly fee to use your service or marketplace (think Netflix or Spotify). The benefit of this model is that you can charge customers more than once per product purchase, which means higher revenue potential.

2. Fee-based: This is where customers pay a one-time fee per product purchase (like eBay). It also gives you the opportunity to lower your costs because you're only paying for one transaction instead of having to process multiple purchases.

3. Commission based : This means that when a transaction happens on your site, you get paid based on the commission rate set by the seller (like Etsy). The benefit here is that it allows sellers to keep their prices low and still make money off their products; however, it also means that if there aren't any sales happening on your site, then neither are there any commissions being made from those sales happening elsewhere online.

Depending on the type of business you have (B2B or DTC) you will want to model which revenue model works best for your business.

B2B stands for Business-to-Business. These are platforms that are used by businesses to run their business—think accounting software or customer relationship management (CRM) platforms.

DTC stands for direct-to-consumer. These are platforms that allow businesses to sell directly to consumers—think Shopify or Square.