This document provides different sources of revenue and their advantages and disadvantages. It covers Subscription, Selling Assets , Usage fees , Renting, Licensing, Brokerage fees and advertising fees.
Unit 2
Business Finance
Sources of Revenue
Type Description Advantage/Disadvantage
Subscription Generated by someone purchasing ongoing These are great revenue streams
access to your product or service. because generally the cost is low so
For example: Netflix, Spotify people are keep paying.
if a customer receives something
from you every month – you
become part of their life, and they
can help amplify your brand via
word of mouth, social media, etc.
Selling Assets Asset sale happens when someone sell It is great way of earning money
their company or form a new one with through unused equipment.
another organization. Sometimes we might not get the
For example: Amazon selling books full market value of the assets.
Usage fees When a company makes money by how This allows company to attract
often someone uses their services. more customers.
For example, a cell phone company
generally charge based on how much data
we use
Renting The temporary use of an asset by a it can be a more expensive way to
customer for a fixed period of time. obtain assets.
For example: Zip Car
Licensing When the owner of the content keeps the It creates an opportunity for
copyright, but allows third parties to use passive income.
their content for a fee. It creates new business
For example: Photography and Music opportunities.
Brokerage fees Making money due to essentially We can Negotiate. What we see is not
“matchmaking” people with other people, always what we have to pay.
or people with companies.
For example: Real estate agent
Advertising fees Making money by taking fees for The disadvantage of this is that the
showcasing a product, service, or even advertisers have to bear the cost of
brand on your online or offline property. newspapers, magazines and
For example: Selling sponsorship on provide the reading material to the
podcast consumers at a cheaper price.
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