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Thanks for this analysis... now for some nitpicking, mostly around word usage
In lugnet.market.buy-sell-trade, Morten Soerensen writes:
>
> I have played with the numbers as well, as far I know has Dan so far had a
> revenue since the opening medio June 2000 of approximately USD 450-500,000 -
> that gives him only a profit of USD 9-10.000 since the beginning.
It is probably more accurate to say that the site has had a *turnover* of
500,000 USD, the gross amount that sellers have received for sale of their
1.3M parts (or so) sold so far. That's a turnover number, not a revenue to
Dan as Dan does not collect this money, the sellers do. (this trap is one
that many dotcom retail sites fell into, thinking that the traffic they
moved was money to them)
However I think that turnover number is a bit high as it uses something like
35 cents a part. Even if you average in sets, it may be a bit high. But
let's use it till Dan himself corrects us (he may not, he may consider
turnover proprietary... I bet Todd and TLC do too).
From that turnover, Dan gets 2% or a bit less (as there may be some
refunding going on due to cancellations or whatever) as his gross revenue.
That is his revenue, not his profit, and that 9-10K has to fund everything.
Dan's PROFIT is no doubt far less than 9K.
> There ain't no doubt that sales are increasing, lately has around 15-20 new
> members been registrated daily so the total number of members is about 3,200
> now. Also has the daily order made on the brickbay side rised to around 100
> per day. With the current number of members and a daily increase of 15-20
> the next year will give a suspected revenue of USD 1,600,000 - which will
> give Dan a profit of USD 32,000.
Turnover of 1.6M and revenue of 32K (IF we assume constant growth. Is the
market saturated, though? What will increased bulk sales by LD do to Dan's
growth??? I won't pay more than what i can buy from LD for any part that LD
has, for example. Dunno. Growth could be negative, flat, linear, or even
better than linear, who knows?)
> If Dan shall have the possibility to continuing give us the best service and
> secure that the server system don't break down in the future ain't the
> expected profit he can make not enough.
revenue, not profit.
> Therefore, would anyone care if he charged each member a year fee of USD 10
> ? It ain't much to pay for all the services he provides, but it will give
> him an extra profit of USD 32,000 emediately (under the circumstances that
> everyone pays) and the amount will increase each day from the new members
> that registrate them selves on the side. That way he'll have plenty more
> money to get a reliable server provider and the needed equipment to keep on
> expanding the brickbay site.
>
> What do you say ?
I think a fee to sellers is fine and 10 sounds more than fair. Even 20 would
be fine by me. But I'm a fairly heavy seller by dollar volume (Not Terry
Cruse or Troy C, but in the thousands of USD)
I also think a fee to buyers is OK. (again, to me, but again, I am a fairly
heavy buyer too, in the thousands of USD) Buying at brickbay is a huge
convenience compared to previous mechanisms we had. Consider that you pay a
membership to belong to Costco or Sam's Club, and you pay a fee to bid in
many "estate sale" auctions, as well.
But 10 USD may be a bit high, especially for the casual viewer or buyer.
Maybe a dollar tacked on on each of the first 5 purchases? This would be a
nightmare to collect, though! Make the sellers do it? Some brainstorming
would be needed here to determine a mechanism that didn't cost more to
administer than it raised.
++Lar
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Message has 1 Reply:
 | | Re: Brickbay problems........again
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| (...) Hi Larry, Sorry about the mix-up in the words (I'm from Denmark), what I meant with the numbers was exactly how you described it - the assumed USD 500,000 is what I mean there has been sold parts for - the amount is calculted as current orders (...) (23 years ago, 19-May-01, to lugnet.market.buy-sell-trade)
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Message is in Reply To:
| | Re: Brickbay problems........again
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| (...) Hi Brickbay Fans :-) I have played with the numbers as well, as far I know has Dan so far had a revenue since the opening medio June 2000 of approximately USD 450-500,000 - that gives him only a profit of USD 9-10.000 since the beginning. (...) (23 years ago, 19-May-01, to lugnet.market.buy-sell-trade)
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