Directory + 2 dollar shop = crazy idea that might just work!

[jacque]

BEFORE READING REMEMBER $5 Australian is about $2.50 US.....

Hi guys not long ago I proposed an idea about starting a, Australian web directory as a business. Since than ive done many things such as register an .com.au, register my business and purchase directory software (WSN Links).

Anyway I really feel like that runing a sole directory is not really going to make me any serious money, so I got thinking....

An idea which I have honetly thought up about 30 minutes ago is to still allow people to submit their site for free to my aussie directory, however the new idea ive had is to allow them to pay me a silly low figure such as $5 a year to join up and this would allow them to:

1) get the site listed above all other sites in their category..

AND NOW FOR THE REAL CRAZY IDEA.....

2) Since ive purchased the software, once edited I could easily make a shopping directory. My idea is to alllow members to sell anything they desire, however it would have to be at a fixed price such as $5 per year. They can sell what they like and how much they like for 1 year and they would get 100% profits. This means no listing fees or any other fees. What this also means is visitors can buy what they see and obviously it would be really cheaps eg $5. In basic words it would be an online version of the $2 dollar shops crossed between a web directory.

This service would only be for Australians and when you put everything together I belive this is very niche. I know $5 a year for every person doesnt sound like a lot however its easy to get $1 million people to pay $5 but its hard to get 1 person to pay $1 million.

Anyway id really like to hear your suggestions and thoughts on this idea.

[mylnjbiz]

I allow members of my site www.rs25.com to sell Subaru related stuff and it is very popular. However, it never seems to make it to the $1m mark. I think eBay has that nailed.

Just a quick comment on your last quote. about 1million people paying $5 rather then 1 person to pay 1 million.

I think this is in the eye of the beholder. It entirly depends on the market and the type of product, yes this may be the case for your product. but it could be the reverse for some industries.

[jacque]

I dont acutally think that I will get a million bucks but it was a nice quote I found and gives me the confidence I need. Anyway I am going ahead with this idea and at the moment Ive upped the amount to $10 ($5 US) but I may make it that you can sell an item for as high as you like if I think it would be better.

Anyway I have a test page up on the site, only the home page has been done and its not complete as u can see links to Froogle( I just put some links up to get an idea of what it will look like) Check it out at http://urldirect.com.au/test/shoptest.htm

It is a interesting concept but there are a couple of things i should probably point out that i have noticed from the business idea.

1. I hope you have a good marketing budget to get people visiting it.
2. There is a catch 22 in this business idea, where you wont get return visitors unless you have a lot of listings and you wont get a lot of listings unless you have a lot of return traffic, I wish i could offer a solution here but i am a little stuck as to how.

This was a business idea i had considered but i end up not being able to find a financial benifit to continueing when i looked at the cost of the script to make the site $700 for the one i was looking at that did everything i wanted.(most did not). The other thing was the amount of time i would have needed to put into build a half decent directory with maybe 40-50% of the target market i was looking at would have been huge, week sor even months of time entering data collecting data and such. Which i beleive is necasary to come extent when your directory is new because otherwise you would be looking at asking people to input there links on a practically empty directory and i know i would be inclined to not do this.

I think that it is a good idea it just needs refining a little.

[jacque]

Thanks for the comments Joel. Id like to explain my plan a bit better...

I plan on "luring people" with the free site submission, and I hope they come back since the software I purchased allows visitorts to post reviews and score ratings on the website. A lot of people wont pass the opportunity to advertise there website's for free, you can trust me on that one.

Im also in the process of contacting some popular Aussie forums and offering a deal were we can offer say " 50 free memberships" to get the ball rolling...

I plan on writing articles, monthly newsletters and advertising as much as I can within my very small budget.

Anyway Im hoping once the site has a lot of traffic, they will jump at the fact to pay the measly $10 a year to sell what they like, of course the main selling point is the no additional fees what so ever unlike other auctions sites. My site wont acutally be an auciton site, just fixed prices of the sellers choosing.

If people dont end up selling anything they wont really lose anything, because at the least they will have there link placed above the non paying links.

I wish there was a safe way to allow people to pay me the $10 (AUS) after they sell something but it would be far easy for them to rip me off.

Keep in mind there really is nothing like this available to Australians besides Ebay, and 1 or 2 other auction sites which all require lots of money (due to fees). I plan to bring an affordable approach that anyone can give a go.

[f3adventure]

The cost per customer is too low at $5. I suppose you will value your time at around $50 per hour. By the time you install thier entry onto your site and maintain the site for 1 year you will have used up more than the $5 they are going to pay you.

By the way, those $2 shops in Australia you refer to were built by an Englishman who had seen the same thing operating in the UK. He made himself a millionaire after only a few years. What he sells from those shops is 5c Chinese junk which he sells for $2 of course. There is VAST quantities of low grade junk like that in auctions in asia. Companies can't sell it so they just dump it at auctions.

Dick Smith Electronics did the same thing. Dick Smith bought electronic JUNK at the auctions in asia and sold it as premium grade electronics knowing that it was rubbish. He made himself into a multi-millionaire too.

The Trading Post (TP) in Australia is another prime example of people doing extremely well out of a simple idea. The TP offered ads-only for anything used or new at $10 for 2 weeks. They expanded so fast that they went from 5 original pages to 300 weekly in only 10 years. They routinely boast they have:

Total Ads: 143,809
Total value: $1.70 billion
Fresh Ads: 40,388
Updated: 17 June 2005

The TP owners have made themselves multi-millionaires too.

LOOT is another good example too. It is a UK ads-only paper which sells people's used and new items and has made the owners into multi-millionaires.

eBay are just phenomenal. I don't know how many billions weekly they have in advertised items but it would have to be (guessing) $20 billion.

If you could think up something a bit similar to eBay and is fraud proof but earns you $10 to $100 per item sold then you may have a winner. The toughest part is having enough money to stay afloat for the period it takes you to get known and earning publicity for the site.

It is really time that an eBay type of site that specializes in (say) cars or computers or wholesale quantities of items (like a trade portal but auction style) was built. The online auction market is ripe for segmentation and specialization.

Hope that helps.

[jacque]

Thanks for the comments Machine. Specializing is good idea, but if I where to go down that road, what could I really specialise in. My website is called URL Direct, so maybe an Internet flavoured auction site, were ppl can sell their own scripts, web design templates, e-books, but id need more, what else could I sell. Well would that even be worth trying, is there a demand for these things?

[f3adventure]

If you were to build an eBay type auction site (big cost) you could specialize in cars, car components, car stereos, cars for international trade...

Maybe that could be a good start 'cars for international trade'. You wouldn't need to spend $100,000 on a website, just maybe $10,000 at first. Car stereo equipment can be a very high value item. I have heard that some guys spend up to $50k on a car stereo !!!

Maybe you could try car stereos and related components.

One of my friends built a dating website and spent AUD$20k, only a few customers so far, but it's building. He offers free listing for now. Later he'll start to charge.

If you build an eBay type site you could maybe offer free listing until you start getting plenty of customers. The Trading Post offered free listing originally and only charged for the paper. Now an ad is around $15.

Well there's just some more ideas for your mind to work with...

[jacque]

Thanks for your input Machine, however I have no interest in cars at all(plus dont have thousands to start) , I love webdesign/Internet and was thinking of starting an Aussie Internet flavoured Auction site where people can sell websites, domains, templates, scripts, ebooks etc. What do you think about this idea?

PS: There will also be a free directory submission service.