When it comes to choosing revenue streams as part of the overall
Business Model Canvas, there are many factors that affect your sources of
revenue.

Pricing Mechanisms

Your first consideration when defining your revenue streams is to give some
thought to your general pricing mechanisms. Your
pricing mechanism can be either to employ fixed pricing or a form of dynamic
pricing for your product or service.

Fixed Pricing

When it comes to defining fixed pricing, do you only offer just a single list price, like a restaurant menu? Or do you offer customer segment pricing which features different prices based on specific customers, such as offering reduced prices for seniors or veterans? Finally, do you offer volume-dependent pricing where you provide discount pricing if the customer buys in bulk? In all fixed pricing situations, you have a defined price for your product or service based on a set of defined rules.

Dynamic Pricing

In addition to the more traditional fixed pricing mechanism, your revenue
streams may come through a dynamic pricing mechanism. One form of dynamic
pricing might be negotiated pricing, such as buying a car or
home where the final price is negotiable. Another form of dynamic pricing is yield
management pricing, where the price changes based upon your inventory,
like airline ticket prices changing based on the time left and how many available
seats are yet unsold. Real-time market pricing is defined by
supply and demand factor, like how stocks or commodities go up and down. Lastly,
you might offer pricing based on an auction price through a
bidding process, similar to how buyers make a purchase on platforms like eBay.

Transactional or Reoccurring Revenue Streams

Your next major consideration is to determine if your revenue will come from
a single transaction or reoccurring transactions When you have a revenue stream
based on a single transaction, you receive a single one-time payment for your
product or service. However, when you have a reoccurring revenue stream, you
receive ongoing payments that deliver value or provide post-sales support to
your customers.

An important consideration when deciding between a transactional or
reoccurring revenue stream is related to your cost of customer acquisition. For a single
transaction, your customer acquisition costs are spread across just one
transaction opposed to a recurring transaction, where your customer acquisition
costs are spread across many transactions.

Fee-Based Revenue Streams

When you sell a product like a car or furniture, the customer is buying a
physical asset. Once it is owned by the consumer, they are free to do whatever
they want with it. They can use it or sell it without your permission. However,
there are a bunch of other revenue streams that are fee-based revenue streams. With
fee-based revenue streams, the business continues to own the underlining asset
and gives permission to the customer to use it.

Here are some common examples of fee-based revenue streams you may want to
consider for your business.

Usage Fees

The more they are used,