Success fee model in eCommerce
Increasing eCommerce competition
Services market for e-commerce has become in recent years very competitive. Continuously increasing barrier to entry, and at the same time a lot of undeveloped space functions, business niches. Similarly, the situation is on the market for e-commerce, resulting in increasing pressure for the results to support interactive agency. At the same time the process of achieving results is becoming increasingly complex, as a result of the multiplication of points of contact and integration success is determined more than ever. In this competition landscape of many service providers for e-commerce begins to compete on how far this market incidental: extended payment terms, lowers the price of services, adds freebies. In my opinion they do not succeed.
What’s exactly success fee?
At the same time growing group of entities that puts the complexity of the offer, the investment in human resources to increase the level of services, mergers and acquisitions and market a wide evangelizing activity of the good practices. You have a better chance. Particularly noteworthy is the process of transition to effective models. Its essence is the dependence of the effects of wage service jobs such as in the form of payments for positions in the search engine traffic is the volume harvested (with SEO activities) or payments derived `a lead or other customer desired action.
For customers it is much more advantageous than traditional billing models. In this model, about half the cost of the initial start in the e-commerce service provider bears, and the costs of failure are much smaller than that of the traditional settlements. Not without significance is the fact that the efficiency model is more beneficial for the business decision maker. For customers with a developed network of ground-based facilities key advantage of this model is also the effect of petroleum gratuitous. After the construction of an online store, consumers as a result, accurate product in the store will carry a transaction in a traditional ground-based point of sale. This transaction is not subject to commission the service provider. An increasing number of customers before the purchase is made discernment on the network, and this is no small stream of new revenue that don’t have to commission to agency.Other advantages is that much easier to come to an agreement with the customer, when agency is also the financial sponsor of the project. For example, entering a traditional retailer, e-commerce is often not able to estimate the true cost of an appropriate scale for the implementation, and then the development of the store, and as a result has a planned budget too small, forcing the agency to cut the cost of the project with a negative effect on revenues online channel.
Success fee – better eCommerce effect
Due to the fact that the agency enter into the role of the project sponsor can afford to take more risk. Business partnership with the company is established on a completely different level than traditional models, so it can take much more aggressive action that otherwise would not be possible. In this way, projects that are created are more progressive, innovative, bold and grow dynamically. This is because the decision maker does not risk premium business and the position in the event of the failure of the project too risky. As a result, the business decision maker does not have to always take precautionary strategies. In addition, our revenue models that are beginning to fill that within five years of this type of project revenues of the Agency will be two to three times higher than usual, with only slightly more effort.
Partnership with Global4Net
Gkobal4Net propose some of our clients success fee model on Polish market. Agency is responsible for managements, marketing and sales on Polish market for some part of income. This is great opportunity for British company which would like extend business of new market. They get opportunity to have great partner who knows very well market and specific eCommerce solution.