10 Revenue Models for Social Media Startups

Just as Beauty lies in the eyes of beholder, same way the value of your product lies in the eyes of your customers. Creating value is all about entrepreneurship and in today’s world even governments are relying on Social media for key decisions, below are ten standard revenue models used in the online Social media Startups nowadays which may help you to find out your revenue model or even multiple revenue models for your startup.

Ways to make money with online Businesses

Commission Based – Similar to eBay, Airbnb, and Amazon Marketplace, in India many such platforms are coming up in Indian art EX: Anaiika, Craftsvilla, Shopo [Listed on Startupfreak ]. when a sale is made on a platform, the provider charges the seller a commission.

Services provided – You can think of Buildabazaar which gives you a complete platform to build your own online store and charge monthly Rs. 1000 for the service additional to the commission on sales and on the transaction fees. It is a SAAS  model and you don’t have to worry about eCommerce software and other expenses which comes when building your own eCommerce site.

Freemium -A business model by which a product or service (typically a digital offering such as software, media, games or web services) is provided free of charge, but a premium is charged for advanced features, functionality, or virtual goods. (Wikipedia). A lot of games on Facebook, such as those provided by Zynga, follow this model. LinkedIn heavily relies on this model as well.

Pay per item fee – If you upload/download a picture, game, file, etc., the firm charges a fee. Similar to Etsy charging $0.20/picture, Flickr, stock photos etc

Selling virtual goods – Buying virtual gifts on social media like how Facebook use to sell Virtual Gifts for $1 back in the day. Can be applied to games, gifts, or basically any other electronic form of good. Zynga games selling credits and coins for real money

Periodic usage/subscription fees – Charging users fees for using the platform for a period of time. Wall Street Journal charges monthly subcription fees to read and watch their material, Some closed group social media communities charging annul subscription fee.

ECommerce -Buy/ Purchase inventory and sell them on your site, similar to Amazon, Flipkart.

Advertising – Put up banner, text, or video ads. Direct ads which you can tie up with the local service provider to display their Ads on your website or contextual Ads using the global service provider like Google Adsence, infolink, etc. If clicked on, recieve revenue for the click-through or for providing an impression to users.

Affiliate Commission – Provide a platform servicing whatever purpose – Pinterest relies on this model heavily. In this model, if a user clicks-through to another site, and the other site makes a sale, your site takes a cut of the commission from that sales (typically between 3%-25%)

Deal Sites – Build a community of buyers and tell them about great deals and charge 10-50% from the sales made because of the deals. Ex: Groupon, snapdeals, etc.

 Hosting/Storage Service Fees – Charge fee for storing Data. Provide cloud storage or web hosting for a fee. Dropbox, Amazon Web Services is a dominant player in cloud storage, Go Daddy is a major provider of hosting services.