IT6506 – Topic 10: Entrepreneurial Opportunities in eBusiness

1

Fiverr · Fee Structure

On a $200 Fiverr order, how much does the freelancer receive, and what service fee does the client pay?

Correct Answer — C Freelancer receives $160; client pays 5.5% ($11) service fee.

Fiverr operates a dual fee structure — it collects from both parties in a transaction.

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Freelancer (seller) fee: 20%. On $200 → Fiverr takes $40 → freelancer receives $160.

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Client (buyer) fee: 5.5% of the order value for orders above $50. On $200 → client pays an extra $11, totalling $211.

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An additional $2 small order fee applies only to orders under $50 — not applicable here.

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Fiverr acts as an escrow service, holding payment securely until delivery is confirmed.

Exam tip: Always distinguish the 20% seller fee from the 5.5% buyer fee. The $2 small order fee is a common distractor — it only applies sub-$50.

2

Dropshipping · Business Model

In a dropshipping business (AliExpress supplier, eBay storefront), who ships the product, and what is the profit on a LKR 5,000 sale costing LKR 3,500 from the supplier?

Correct Answer — B AliExpress ships directly to the customer; profit is LKR 1,500 before fees.

Dropshipping's defining feature is that the retailer never handles or ships the product.

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Customer places order on the eBay store (LKR 5,000).

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Retailer forwards the order and customer's shipping address to the AliExpress supplier.

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AliExpress supplier ships directly to the customer (LKR 3,500 cost).

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Gross profit = LKR 5,000 − LKR 3,500 = LKR 1,500 (before eBay/PayPal fees).

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Advantages: Low startup cost, no inventory risk, location-independent, easy scalability.

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Disadvantages: Lower margins (retail pricing, no bulk discount), no quality control, dependency on supplier, longer shipping times.

3

Google AdSense vs AdMob

A blogger and a mobile app developer both want to monetise with Google ads. Which platform suits each, and what revenue share do they retain?

Correct Answer — B Blogger → AdSense (68%); App developer → AdMob (60%).

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Google AdSense — for websites and blogs. Publishers retain 68% of ad revenue. Formats: display, text, video ads.

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Google AdMob — for mobile apps. Developers retain 60% of ad revenue. Formats: banner, interstitial, rewarded ads.

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Shared advantages: Easy integration, large advertiser network, advanced targeting, multiple ad formats.

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Shared risks: Revenue volatility, strict policy enforcement (account suspension), limited control over ad content, potential ad-blocking by users.

Memory aid: AdSense = Site (S→S). AdMob = Mobile (Mob = Mobile). Revenue: AdSense 68% > AdMob 60%.

4

Affiliate Marketing · Mechanism

How does an affiliate (e.g. a YouTuber with an AliExpress affiliate link) earn money, and what are the key risks of this model?

Correct Answer — B Commission earned only on completed sales via unique link; risks include commission-only income and merchant dependency.

Affiliate marketing is performance-based — earnings depend entirely on successful referrals, not clicks or views alone.

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Mechanism: Affiliate promotes a product using a unique tracking link. A commission is paid only when a sale/lead is completed through that link.

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Popular platforms: Amazon Associates, eBay Partner Network, AliExpress Affiliate (up to 9% commission, 150M+ products, 200+ countries).

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Advantages: Passive income potential, no product/inventory management, flexible and scalable, targeted niche marketing.

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Risks: Commission-only (zero income if no conversions), merchant dependency (fulfilment failures hurt your reputation), market saturation, payment delays.

5

Cryptocurrency · Mining vs Staking

Compare cryptocurrency mining and staking: what consensus mechanism does each use, and what is the primary resource required?

Correct Answer — C Mining = PoW (hardware + energy); Staking = PoS (locked digital assets).

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Mining (Proof-of-Work / PoW): Miners solve complex mathematical puzzles using specialised hardware (GPUs, ASICs) to validate transactions and earn newly minted coins. High energy consumption; highly competitive — often requires joining mining pools.

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Staking (Proof-of-Stake / PoS): Participants lock (stake) existing coins in a compatible wallet to validate transactions and earn rewards. Far more energy-efficient than PoW.

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Other earning methods: Trading (exploit price fluctuations, use exchanges like Binance/Coinbase/Kraken/Bybit/Crypto.com) and Investing (long-term holding based on growth potential).

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Key cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Tether (USDT), BNB, USD Coin (USDC), and many others.

Summary table:   Mining → PoW → Hardware & Energy → Competitive.  |  Staking → PoS → Held coins → Efficient.

Topic 10 AnswerSummary Notes

Topic 10 Answer
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