Techmall Case Analysis “frank” Qian Zhang

Techmall Case Analysis

“Frank” Qian Zhang

BUS 512A, Dr. Hansen

April 21, 2015

1.  The 3 revenue streams are: nonrefundable setup fee, monthly statement fee and transaction fee.

1. The driver for nonrefundable setup fee is number of new merchants added, not including merchants during beta testing period.  The expected revenue for this driver is $750 per merchant for a one-time fee.  The driver for monthly statement fee is all active “system” merchants, and it is $50 per merchant per month.  The driver for transaction fee are transaction dollars per transaction & total number of transaction, with 2% of total sales dollar, with a max cap at $200 per transaction.

1. Expected nonrefundable setup fee:

Year 2:  2676 new merchants x $750/merchant = $2,007,000

Year 3:  4751 new merchants x $750/merchant = $3,563,250

Year 4:  4883 new merchants x $750/merchant = $3,662,250

Expected monthly statement fee:

Year 2:  

Year 3:

        Year 4:        

        Expected transaction fees: (expected fees without the $200 max cap)

Year 2:  $769,823 x 2% = $15,396.46

Year 3:  $12,616,436 x 2% = $252,328.72