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In lugnet.market.buy-sell-trade, Larry Pieniazek writes:
> 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
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 since the beginning x expected average order of USD 35 (I'm
having the brickbay shop "bricks4you.com" and my average order is far higher
- but I also know some US shops, and have the idea that these shops has a
lower average because it's cheaper in shipping costs, and it's therefore
possibel to place a smaller order without having to pay to much in shipping
costs when you live in the USA).
That's also why I determinate Dan's profit before any expenses to USD 10,000
- and that's why I'm later saying that profit/revenue for Dan has to
increase from this level if he should be able to run this site with a decent
server provider and the possibility to expand the site with new functions etc.
I agree that it's wrong to charge everyone a fee - but I feel that he may
be allright that sellers and buyers has to pay for the extra tools like
"Making wanting lists" that provides them with emails when wanted items is
added, also find that sellers should pay for the possibility of getting
informations like "Average price".
Sp what I suggest is that he makes two kinds of members - those who only
wants to buy can do it for free - and those who wants to use the tools he
provides (wether they are seller or buyer) shall pay a yearly fee for that.
It's very valuable informations you can get - so it may be reasonable to pay
for them - you don't as far I know get the same possibilities on eBay - I
haven't found any tools that gives me an email the moment anyone put on a
375 set for an example ?
I have made some research for a time in the increase of members (that
information is free as well right now), and I used this information to
calculate the expected sales revenue in the shops for the next year. But I'm
pretty shure I maked a low number - because if you take a close look you'll
find out that us Europeans is behind as usually when it comes to the
internet - at the moment is about 2,500 out of 3,200 members living in the
USA - but Europe is having the same amount of citicens as in the USA - so in
time should there be as many European users as American users !
Morten
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Message is in Reply To:
 | | Re: Brickbay problems........again
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| Thanks for this analysis... now for some nitpicking, mostly around word usage (...) 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 (...) (23 years ago, 19-May-01, to lugnet.market.buy-sell-trade)
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