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INTRO Introducing me, buying a tourism marketplace

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Quim Baig

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Hi there, My name is Joaquin and I am a young entrepreneur who wants to reach financial freedom. I am located in sunny Barcelona on the east coast of Spain. I have launched my first business when I was 16. It was a pay per click website. And in 2018 I tried dropshipping.

My educational background is Chemical Engineering with a few years of work experience, mainly internships. Along with that, I have been teaching myself digital marketing and now I am taking a mini MBA with a focus on Lean start-up and Innovation.

Right now I have encountered the opportunity to buy a market place that connects tourists who want to have cool experiences with locals who have something interesting to offer them.

I would like to know where I can post this issue and get feedback from experienced people, and also find some mentorship.

Thanks to you all, and have a good day.
 

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MJ DeMarco

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Welcome aboard.

Right now I have encountered the opportunity to buy a market place that connects tourists who want to have cool experiences with locals who have something interesting to offer them.
Need the numbers to make any kind of analysis.
 
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Quim Baig

Quim Baig

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Welcome aboard.



Need the numbers to make any kind of analysis.
Thanks MJ for replying. Such a nice surprise:peace:the numbers are the followings:

200 visits a day. They have their blog very well positioned with SEO, and then they lead the clients to buy the experiences. They earn 20% per sale, the other 80% goes to the host. 100 purchases in the last 10 months with an average ticket of 35€. So I did the math, and they made 700€ gross margin approx. This is their website

Additionally 400 likes on FB and Instagram. The booking process is completely automated.

They are selling because they have another business that requires more of their time.
 
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Quim Baig

Quim Baig

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Welcome.

If you can see multiple areas where you can add significant value, it would be a worthy pursuit.
They have run only one FB ad with great success according to them. I have checked their website and they do not have the FB pixel installed so they do not register that much data from the visitors. This is an area with a lot of space for improvement.

On the other hand, they have experiences in 4 cities already. But Barcelona is not one of them yet. This city has a huge potential for any business in the tourism industry. I only need to add my city with, let's say, 20 experiences, and write some nice blog posts about it.

What are your thoughts on this??
 

MJ DeMarco

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Based on the numbers, the site isn't worth much. But I think the value is there and the need. In fact, I think @biophase 's brother or friend was doing something similar if I recall correctly.

What are they asking?
 

arl

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Bienvenido Joaquin! Another spaniard over here.

It can be an interesting opportunity if you think you can provide value in the space and grow the company. It will be hard though. Airbnb is already doing that, and there are also plenty of other websites selling activities to tourists like civitatis.

How would you differentiate yourself from the competition?
 

biophase

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A site that made $700 last year is not worth that much. The issue with this business is the very low payouts per customer. Getting 20% of something that costs $40 is tiny. Making $8 per customer is not worth the level of responsibility. Does this site manage any of the customers, or is it a pure pass through?
 

Xavier X

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I don't think making 20% off $40 is bad at all. It is well within the ball park for business models of this nature. Airbnb - 15%, Uber -25%.

It's a matter of scale. Similar to credit card processors charging 3% per transaction on a $1 purchase.
The more important aspect to consider is how much he can scale it.
 
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Quim Baig

Quim Baig

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Based on the numbers, the site isn't worth much. But I think the value is there and the need. In fact, I think @biophase 's brother or friend was doing something similar if I recall correctly.

What are they asking?
I thought to offer them 250€. Too much?? 125€ at the moment of the sale and the rest 125€ periodically as long as they keep transferring the know-how and providing me useful insights. Right now the business is run by 4 people and I believe they are valuable so I want to slightly keep them around.

He states that they just want to get the investment back (the cost of the website) and they do not value the business by the amount of money they have made. At the same time, he sounded very enthusiastic about this project and I do not want to offend him with a low offer.

What should be the best strategy to make this offer??

P.S. Thanks to you all for your comments. That was a lot of food for thought. I feel that you guys are really interested in helping out other people.
 

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biophase

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I don't think making 20% off $40 is bad at all. It is well within the ball park for business models of this nature. Airbnb - 15%, Uber -25%.

It's a matter of scale. Similar to credit card processors charging 3% per transaction on a $1 purchase.
The more important aspect to consider is how much he can scale it.
it all depends on how much work is required after someone makes the booking.
 

biophase

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I thought to offer them 250€. Too much?? 125€ at the moment of the sale and the rest 125€ periodically as long as they keep transferring the know-how and providing me useful insights. Right now the business is run by 4 people and I believe they are valuable so I want to slightly keep them around.

He states that they just want to get the investment back (the cost of the website) and they do not value the business by the amount of money they have made. At the same time, he sounded very enthusiastic about this project and I do not want to offend him with a low offer.

What should be the best strategy to make this offer??

P.S. Thanks to you all for your comments. That was a lot of food for thought. I feel that you guys are really interested in helping out other people.
why are there 4 people running a business that makes $700?

What are they asking?
 
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Quim Baig

Quim Baig

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why are there 4 people running a business that makes $700?

What are they asking?
It was a startup idea wannabe (I guess). They even attempted to raise money from investors.
You know, just graduated from college youngsters who want to build something.

Right now they found something more interesting to work in, and want to pass their previous work to somebody who can make something out of it.

I believe there is very little work to do after the customer has made the booking since the booking process is automated, and the experience is provided by a third party, which has its quality verified. At that moment the only work needed would be, maybe send some satisfaction questionnaires to measure the Net Promoter Score (NPS). And definitely pay the host their commissions through Stripe which can be eventually automated.
 

biophase

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I think you need to understand the work done after a booking and what happens if the tour guide doesn't show up or the client has a shitty experience.

you never answer the question about their asking price?? Do you even know it?
 

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