Hello everyone..
I have been thinking about setting up online businesses that dont involve selling physical goods but rather making use of existing online resources and putting them to use. I have a few ideas that could work and this is about one of them.
Now.. my proposed idea has already been implemented by another site but I intend to add a small twist to it. The site in question charges a certain amount for people to have access to a resource but the site gets the resources for free and does not need to reward the resource in anyway. ie.. User A pays a certain amount to the site to have access to a resource but the resource gets nothing from it so the site is always making profit.
My idea would actually be to undercut the site in question and reward the resources too, so in effect, my profit margin will be much lower but the idea is to use the reward as an incentive to get the resources and also the lower cost should hopefully attract the users (customers) of the resources. The idea is to generate revenue by getting more users and resources that site X... ie large volume sales but with a smaller profit margin per sale than site X which works on large profit margins per sale of service. The idea is not exactly fast-lane but has the potential to be so if I can get enough customers and traffic.
Now.. I have a few concerns about this and it dosnt help if you have no business experience at all so I'm looking for some advice from people here who have 'been there.. done that'.. especially with online businesses. Here are my concerns and questions.
1) When competing with well established sites, how hard is it to get customers to use your service..even if your charging much less? Do people think more about the 'brand' or how much they are paying?
2) Catch 22... Promoting and getting customers and resources.
Lets side track and think of another example. Say I have a site where people advertise rentals and I charge them to advertise. Now.. advertisers wont use my site if I dont have any visitors interested in renting. And the people interested in renting wont come unless I have lots of ads so the situation becomes a catch 22 and the site dosnt take off.
Now if I use this example on my site.. The customers wont come if the resources arnt there, the resources wont come unless they are getting the promised rewards. How can I crack this catch 22? I suppose the incentive might attract the resources but if there are no customers then they will loose interest in the site and disappear.
3) What is the best methods of marketing a website. Obviously I cant go to the rival site and shout 'my site is cheaper'.. whats the next best step to try.
4) What are the chances of the established site cutting their prices to match mines and hence try and drive me out of the market? I guess 'only the strongest will suvive' in that scenario and that wont be me.
As I have said.. I'm very new when it comes to the business world and some of the answers might be very obivious but I would be greatful if people could give me some advice and help.
Many thanks
Rob
I have been thinking about setting up online businesses that dont involve selling physical goods but rather making use of existing online resources and putting them to use. I have a few ideas that could work and this is about one of them.
Now.. my proposed idea has already been implemented by another site but I intend to add a small twist to it. The site in question charges a certain amount for people to have access to a resource but the site gets the resources for free and does not need to reward the resource in anyway. ie.. User A pays a certain amount to the site to have access to a resource but the resource gets nothing from it so the site is always making profit.
My idea would actually be to undercut the site in question and reward the resources too, so in effect, my profit margin will be much lower but the idea is to use the reward as an incentive to get the resources and also the lower cost should hopefully attract the users (customers) of the resources. The idea is to generate revenue by getting more users and resources that site X... ie large volume sales but with a smaller profit margin per sale than site X which works on large profit margins per sale of service. The idea is not exactly fast-lane but has the potential to be so if I can get enough customers and traffic.
Now.. I have a few concerns about this and it dosnt help if you have no business experience at all so I'm looking for some advice from people here who have 'been there.. done that'.. especially with online businesses. Here are my concerns and questions.
1) When competing with well established sites, how hard is it to get customers to use your service..even if your charging much less? Do people think more about the 'brand' or how much they are paying?
2) Catch 22... Promoting and getting customers and resources.
Lets side track and think of another example. Say I have a site where people advertise rentals and I charge them to advertise. Now.. advertisers wont use my site if I dont have any visitors interested in renting. And the people interested in renting wont come unless I have lots of ads so the situation becomes a catch 22 and the site dosnt take off.
Now if I use this example on my site.. The customers wont come if the resources arnt there, the resources wont come unless they are getting the promised rewards. How can I crack this catch 22? I suppose the incentive might attract the resources but if there are no customers then they will loose interest in the site and disappear.
3) What is the best methods of marketing a website. Obviously I cant go to the rival site and shout 'my site is cheaper'.. whats the next best step to try.
4) What are the chances of the established site cutting their prices to match mines and hence try and drive me out of the market? I guess 'only the strongest will suvive' in that scenario and that wont be me.
As I have said.. I'm very new when it comes to the business world and some of the answers might be very obivious but I would be greatful if people could give me some advice and help.
Many thanks
Rob
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