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<aside> 🛗 Business models in conversions define online earnings and costs, balancing Payout and Revenue. They guide accurate financial decisions and ensure fair partner compensation.

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Table of Contents:

💡Understanding Business Models in Conversions

Hey there, curious reader! 🌟 Have you ever wondered how businesses determine their earnings and liabilities from online conversions? It's all thanks to a clever concept known as a "Business Model". Let's explore this together!

❓What is a Business Model in Conversions?

In the digital world, every conversion (such as a sale or sign-up) is influenced by a business model. Think of it as the secret sauce recipe that explains how two key ingredients – Payout and Revenue – are combined.

• Payout: Think of this as the bill a business has to pay when a conversion happens. For example, if you're an online marketer, it might be what you earn when you generate a sale for a company.
• Revenue: This is the sweet cash the company earns from that very conversion. It's the financial success every business enjoys!

🧮How's the Magic Calculated?

👟Let`s say you're promoting an exclusive pair of sneakers. For each pair sold in Bulgaria, the company earns a revenue of 1000 USD. This is a straightforward explanation of the **CPA (Cost per action)** model.

🧑Now imagine you are running a campaign to attract potential customers. Each customer who visits the shop brings you 5 USD, following the CPL (Cost Per Lead) model.

💰Now let's discuss the **RevShare** model. Continuing the analogy, it's similar to receiving a percentage of the revenue from each sneaker sale. In this model, if a customer makes a deposit, the business may receive a percentage of that deposit as revenue. This percentage is determined by a formula, which is also a part of the business model.

📝Here's a quick bite-sized example