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Jack (JMAC) McLaughlin
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Jack (JMAC) McLaughlin   My Press Releases

What is Revenue Sharing?

Published on 4/13/2017
For additional information  Click Here

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Revenue sharing is a business arrangement that makes it possible for two or more parties to share in the profits and losses realized by a business operation. The exact structure of the revenue sharing strategy will vary based on governmental regulations that may apply in the jurisdiction in which the business is located, and the terms and provisions found in the contract that establishes the working relationship between the concerned parties.

This approach may be used to compensate employees of the firm above and beyond the usual salary or wages, or be used to provide compensation to affiliate partners in an online business venture. Revenue sharing can even be used as a means of sharing funds collected by a national government with the states or provinces that are part of that particular nation.

The advent of the Internet provided another expression of revenue sharing. With this approach, individuals provide some type of services or support to the site owner in exchange for receiving a certain amount of the profits that are generated from online sales, the amount of traffic to the web site, or possibly from ad revenue that is generated when visitors to the site click on ads residing on the site’s pages.

Typically, site owners will share the profits with providers, with a specific percentage of those profits going to the site’s partners or affiliates. For example, a web site may provide an outlet for affiliates to post short articles for free, then compensate the posters by splitting 50% of the monthly earnings generated by views of the article by visitors to the article, or revenue generated by visitors clicking on ads that are placed on the page along with the article, or a combination of the two.

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