The Revenue Sharing business model is one in which individuals, groups, or businesses collaborate and share the resulting revenue. This model is frequently associated with the affiliate marketing schemes that are prevalent on the Internet (for example, an e-commerce site operator may refer customers to a business via an affiliate advertisement and be compensated for 'clicks'). The operator benefits from the revenue generated, while the business benefits from the increased customer base generated by referrals. Other methods allow individuals to register online in order to collaborate on a common objective and share in the profits generated. Additionally, customers may be encouraged to upload content to the Internet in exchange for a percentage of advertising revenue based on the number of ad banner 'impressions' or 'clicks' associated with the content. Revenue sharing can aid in the formation of strategic partnerships that expand a business's customer base, thereby increasing revenue and enhancing its competitiveness. Additionally, they may be used to reduce distribution costs and share risk with other stakeholders. To make the Revenue Sharing model work, one party must increase revenues and share them with another in exchange for participation, resulting in a win-win situation.

When and how to apply Revenue Sharing: 

 As value chains have become more fragmented, open and interdependent, the importance of the Revenue Sharing pattern has increased. Regardless of the industry in which you operate, you will benefit from risk sharing through strategic alliances. This is true for both B2B and B2C transactions.
Well-known companies that use this pattern are Groupon and Seven Ventures.