Cash Machine 6#
In the Cash Machine concept, the customer pays upfront for the products sold to the customer before the company is able to cover the associated expenses. This results in increased liquidity which can be used to amortise debt or to fund investments in other areas.
Examples: Iconic Cases
How they do it: In the Amazon web store, customers usually pay in the check-out process prior to the products being shipped (payment upon receivement possible for a fee). This gives Amazon an increased liquidity which e.g. enables growth investments.
Learn more about Amazon Store →
How they do it: Blacksock’s subscribers purchase and pay their sock subscription in advance, allowing the company to use the increased liquidity to finance other areas such as growth.
Learn more about Blacksocks →
How they do it: Amazon Web Services offers pricing for it’s computing pricing on an annual, pre-paid schedule. These so-called ”Reserved Instances” provide customers with a significant discount (up to 75%) compared to On-Demand instance pricing.
Learn more about Amazon Web Services →
How they do it: McFit customer’s pay their monthly subscription fee upfront which gives the company a fixed income stream. This can be used to finance the fitness center infrastructure.
Learn more about McFit →
How they do it: When a merchant accepts a payment via PayPal (e.g. for his E-Commerce shop), the funds are first collected from the customer’s PayPal balance or credit card. Only after PayPal asserted that the payment is genuine and it received the funds from the customer, the payment is ”deposited” virtually in the merchant’s account. Subsequently, the merchant may then transfer the funds to his regular bank account. Both merchant and customer balances lead to PayPal holding an immense amount of funds ”virtually” on his platform, before the funds are at a later stage liquidated or transferred away from the platform.
Learn more about PayPal →
Below, the top industries for the pattern "Cash Machine" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
27% of firms using pattern
9% of firms using pattern
9% of firms using pattern
All Industries
Below, the pattern "Cash Machine" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
5 pattern co-occurrences
5 pattern co-occurrences
4 pattern co-occurrences