Techmall Revenue

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Words: 1180

Pages: 5

Category: Business and Industry

Date Submitted: 09/15/2016 10:55 PM

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1. What are the revenue streams for TechMall?

The revenue streams for Techmall includes

Setup fee revenue

Statement fee revenue

Transaction fee revenue

The setup fee is $750 and it is nonrefundable. The statement fee is $50 very month and no charge for initial setup month. The transaction fee is 2% of total sales dollars and the maximum fee per sale transaction is $200.

2. What drives each of the revenue streams and how much does Tech Mall expect to earn from each stream?

Set up Fee Revenue

Merchant setups drive the setup fee revenue and the setup fee revenue is equal to setups multiplies $750.

Statement Fee Revenue

System merchant is the driver of the statement fee revenue and the statement fee is an equal to system Merchants multiplies $50 per month.

Transaction Fee Revenue

The transaction dollars per sale and the number of transactions drive the transaction fee revenues. When the total transaction dollars per sale is less than $10000, the transaction fee revenue is equals to 2% multiply transaction dollars. And when the total transaction dollars per sale is more than $10000, the transaction fee revenue per sale is $200. The formula which can help express the revenue is as follows:

Transaction Fee Revenue=2%*Transaction Dollars (when the amount< $10000)*Total Transactions + (Transaction Fee Revenue =Total Transaction (when the amount>/=$10000)* $200)

3. Given the level of activity in each revenue stream, compare the amount of revenue expected from each revenue stream with their actual revenue. Is TechMall getting their expected revenue from each of the revenues streams?

From the calculation, I can conclude that TechMall doesn’t get their expected revenue from each of the revenue streams. I will take year 4 as an example.

Setup Fee Revenue

From Exhibit 5, in year 4, there are 4883 merchant setups in total. So TechMall should expect $750*4883=$3662,250 as its setup revenue. However, in Exhibit 5, the set up...