Bagahe Padala App [Week 11: Perspectives]
Math and numbers.
These two words are the main stars for this week. This week we crafted the Bagahe Padala App`s Revenue Model.
Along the process, the team has done a lot of revisions to come up with the perfect revenue model that fits the start up.
ZDMC decided to use the Commission Revenue Model.
Below is our business model. This a linear business model that reaches the goal of generating profit through cheap charging fee and advertisements methods.
A user is charged a fee for each transaction in the commission model. It is by far the most common business strategy for an online marketplace. The marketplace receives a percentage or a fixed fee for its services when the client pays the provider. Either the customer or the consumer might be charged by the platform.
For now, Bagahe Padala App will operate free of charge and we will profit the business by taking commission rates every transaction.
We take 3% commission rate from every transaction which is the cheapest rate among the competitors. Our lowest commission rate could be our competitive advantage among the competing business.
Revenue Streams
We can profit Bagahe Padala App by taking other businesses` advertisements following the CPA, CPV, CPC, and CPM advertisement method. Each click could amount to a corresponding rate.
OUR VARIOUS COMPUTATIONS
TOTAL REVENUE FOR THE ADVERTISEMENT METHODS
We get the total revenue of APP ads by using this formula EX: ₱11.55 (ADS RATES) * 10 est. No of ads = ₱115.50 : ₱1,055.108 (overall total of rates) * 30 (days Fee for Advertisement) = ₱31,653.00
Computation for transportation revenue
Since our computed TAM is 1,000,000 customers, we can assume that number to compute the commission revenue and net revenue.
1,000,000.00(Frequency of customers) * ₱547.66 (riders transportation payment)= ₱547,660,000.00
Computation for founders commission revenue
1,000,000.00(Frequency of customers) * ₱16.94(Founders commission)= ₱16,938,000.00
Computation for Net revenue
₱564,631,653 + ₱31,653,000,000 = ₱564,631,653 - ₱6,502.81 (fees we need to pay)
Total Net Revenue =₱564,635,533.71
LIFETIME AVERAGE OF THE CUSTOMER
LIFETIME CUSTOMER VALUE= AVERAGE VALUE OF SALES * NUMBER OF TRANSACTIONS * LIFETIME /COURSE OF YEARS
LIFETIME CUSTOMER VALUE= 564.00 (Estimated minimum charging fee from Laguindingan to CDO proper ) * 5 (Average number of travel/arrival per year ( Interviewed 10 persons Travellers and OFW)) * 5
LIFETIME CUSTOMER VALUE= Php 14,100
ESTIMATED MINIMUM COST OF TRANSPORTATION FEE FROM LAGUINDINGAN AIRPORT TO CDO PROPER= 564.00
NUMBER OF TRANSACTION PER YEAR BASED LATEST SURVEY = 5 PER YEAR
Average time a customer remains active before they drop off and go “dormant= 5 years