Customer Funded Business Models

This article discuss about various customer funded business models on which various compiles are running. Many great company such as Amazon, Microsoft are built using this models.

Matchmaker Models

Some companies are in the business of matching up buyers and sellers, such as Expedia. They simply take the order, but never own the goods or services that are sold. The fees or commissions they earn from customer and sellers provide the cash required to launch the business.

Matchmaker models brings together buyers and sellers without actually owning what is bought and sold. They completes the transaction, earning fees or commissions for transaction done on their platform.

Pay-in-Advance Models

Customers traditionally pay the supplier in advance for at least part of the price of goods or services before receiving anything. Consultants, architects, and many kinds of other services firms are good examples.

In this model the business asks the customer to pay something up front, as a requirement to get started on building or procuring whatever it is that the customer has agreed to buy.

Subscription Models

In this model a subscriber pays for goods or services, that are then delivered over an ensuing period of weeks, months, or years. Sometimes the subscription fee is paid entirely up front. Sometimes they are paid on a recurring basis—typically the case with cable TV.

Thus in subscription models customer agrees to buy something that is delivered repeatedly over an extended period of time.

Scarcity Models

Scarcity models is used to achieve rapid inventory turnover i.e. the customers buy the goods before the retailers vendors are paid. In effect, the retailer finances its business using your and my money.

In scarcity models, what’s for sale is severely restricted by the seller to a limited quantity for a limited time period. Supplier being paid after the sale is made. When the goods are gone, they’re gone, and there will be no more!

Service-to-Product Models

Service-to-product models are those in which businesses begin their lives by providing customized services and eventually draw on their accumulated expertise to deliver packaged solutions that stand on their own.

Sometimes the products are delivered in physical containers. Sometimes as software-as-a-service (SaaS) digitally downloaded to our PCs, iPads, or mobile phones.

Summary

Summary of what we discussed above with example.