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sohaib
12-02-2010, 01:00 AM
Hi, I was in the planning stages of launching a website where you will be able to sell a particular type of vehicles, the revenue streams will be through the listing fees and advertising on the website, however, I have come to a tricky situation; the initial pricing strategies.

I have come up with a few initial strategies however, each has its own advantages and disadvantages and I am not quite sure on which one I should go with. :confused:

The strategies are below, I would appreciate if you could tell me what you think of these and any other strategies that you may feel suitable. I would love to hear from someone who is running a similar kind of business.

Strategies:
1. Launch website with FREE Listings for a limited time period.
Pros: easier to get more listings and vistors
Cons: no revenue for at least 2 months to reinvest in the business, take longer to break even and potential customers may get used to the idea of FREE and not like to pay when FREE period expires.

2. Give FREE Listings to few selected dealers and businesses for limited time and introduce normal pricing on the website for normal customers.
Pros: Able to get a lot of listings quickly, appear to be a successful website to potential customers
Cons: All initial listings will appear to be from a few sellers only.

3. Introduce normal pricing for all customers from Day 1
Pros: Revenue from Day 1, so can reinvest in business
Cons: Customers may not trust the site if it doesn't have many listings.

4. Discounted Price for Limited Time period for all customers
Pros: (Similar to 3)
Cons: (Similar to 3)

5. Make FREE Listings forever and create advertising as only revenue stream
Pros: More listings = more vistors
Cons: Limited revenue stream, finding potential advertisers

Please PM me if you have any questions.

I look forward to your replies.

Thanks in advance!

James Smith
12-02-2010, 10:50 AM
You wont be able to charge people for listings before you have traffic.
Generally go start with free to get traffic, and then introduce 'premium' adverts at a later date.
Payper click advertising may add a small amount of revenue, but its not likely to be much unless you have a phenomenal level of traffic.

aa412
12-02-2010, 04:42 PM
I second what James has said. There's no way at the early stages that people will hand over money when they don't know whether the site is any good or not. Unless you do something like if their vehicle isn't sold then you refund all fees. But even then unless this is a real niche that no one else is doing people will be more likely to go elsewhere if it came down to fees.

Joshua Mason-Allen
12-02-2010, 04:51 PM
When I think of buying or selling anything automotive: I think of Autotrader, I don't think of Googling for what else might be out there, and I'm not alone. I know a lot of people think like this, so why would I pay someone else when I can get maximum exposure with a massive company? aa412 appears to think the same.

Perhaps if this is a niche section of vehicle selling that you're entering (albeit, I can't think what) then there might be some sort of associated promotion you can do.

Regards,

sohaib
12-02-2010, 05:05 PM
Hi, thanks for your feedback but I think i may have not made clear what type of vehicles this website if used to sell; its for Taxis mainly.

Autotrader doesnt sell taxis or it might just have 1 or 2.
For normal vehicles, I dont think its going to be very easy to set up a successful website with the likes of AutoTrader around, like you said Joshua.

What do you think of Strategy 2?, as i will be advertising through a number of different taxi related mediums, people who are looking for a taxi, will at least look at the website and if they see quite a few vehicles for sale then they may think that this is a suitable medium for them to advertise too, especially if I can get the 2 major Taxi Manufacturers/Converters to advertise for free.

(I hope that makes sense :confused: )

Regards,

markocosic
13-02-2010, 11:57 AM
Charge dealerships and traders, make it free for private individuals. Everybody can go premium, for a fee. Offer history/finance checks for a fee, taking a cut off them. Use the individuals to get the volume, make money off the people shifting enough units to notice the benefits of the website. Use private individuals to test-drive the website for you, then open it to the dealerships and traders later once bugs are out.

If you can offer to run all the 'backend' for print publications for 'free' that might be useful - conditional on you being able to display the same adverts (free) on your site. Early days your site gets filled with all the same ads as the print magazines, with the print magazines being the major player. Later your site is the major player, and there are tickboxes in it (+ 10 quid) to advertise in each of the print magazines as well. You take a cut/hand the magazine a kickback. Giving the 2 majors one year free isn't a bad plan.

What cross-selling (taximeters, servicing etc) do you propose?

Richard.curran
13-02-2010, 04:00 PM
Charge dealerships and traders, make it free for private individuals. Everybody can go premium, for a fee. Offer history/finance checks for a fee, taking a cut off them. Use the individuals to get the volume, make money off the people shifting enough units to notice the benefits of the website. Use private individuals to test-drive the website for you, then open it to the dealerships and traders later once bugs are out.

If you can offer to run all the 'backend' for print publications for 'free' that might be useful - conditional on you being able to display the same adverts (free) on your site. Early days your site gets filled with all the same ads as the print magazines, with the print magazines being the major player. Later your site is the major player, and there are tickboxes in it (+ 10 quid) to advertise in each of the print magazines as well. You take a cut/hand the magazine a kickback. Giving the 2 majors one year free isn't a bad plan.

What cross-selling (taximeters, servicing etc) do you propose?

Interesting post and probably a good strategy to take. I am currently in the process of launching my website and I have decided that it is not in my interests to have adverts on the websites as it is disruptive to the end user experience and I want to ensure that the user experience is as focused and genuine as possible. I am not going to distract them with adverts.

Being honest and upfront with people who arrive at your site is the best strategy. Thinking of possible alternative revenue streams is a good idea.

I find that customers are happy to take advantage of a free period at the start when a website is launching and these customers express interest in paying a fee at a later date when the business is more established, having asked them first. However, you are quite right that if you get people to join your site on the basis that it will be free for the foreseeable future then suddenly start charging them they will leave.

Difficult one, I'll keep my eye on this to see what you end up going for. ;)

markocosic
13-02-2010, 06:50 PM
Generic AdSense adverts are a turn-off, but I'd say that people like properly targeted, properly timed, adverts.

Opie Oils (textbook SEO in my view: http://lmgtfy.com/?q=opie+oils) sells oil for cars and other service fluids/filters. Every month he'll have a competition that you can enter for a related prize - polishing kit, cd player, sat-nav unit, free track-day experience. They're all provided by selected 3rd parties, who make use of Opie's customer base to advertise to whilst Opie makes use of their products to draw traffic back to his site.

So long as its relevant (people who change their own oil tend not to object to being offered the chance to play with a ferrari for the day, though they opt-out of the monthly competitions if they so wish) the customers quite like it. Brings business back to his site, and they get advertising out of it too.

Other classic tactics include discount coupons on the bottom of Opie invoices for their services - Opie gets to "give something away" at no cost to him and they get to advertise. Again, so long as you don't take the **** with what you consider relevant it seems to work well.

I guess the LowPriceLessons equivalent would be fleecing 'Red' 'AA' and 'BSM' (payable in arrears) but making it free for Dave's School of Motoring? Offering discounts on selected driver training aids/advanced tuition/parental refreshers to your customers? Chris Knott and Adrian Flux (brokers, not underwriters) 'own' the online enthusiast business and are active on all the discussion forums. A genuinely good deal on insurance is high value to the learner and worth a chunk (5% on a 1000 GBP policy not uncommon) to the broker too. Doesn't take many of them to earn a living, all the while satisfying the ravaging hordes of (reputation forming) individual learners/instructors with 'free' service.

sohaib
14-02-2010, 03:16 PM
Hi,

markocosic, I think thats quite a good idea of charging dealers and not individuals, but dealers will be more picky as to where they want to advertise as they have greater power than us however, if you do manage to get a dealer on board then I think its very profitable thereon.

And I do like your idea about offering to run all the backend for print publications.

I am initially proposing to sell Taxi Vehicles themselves, but ideally would like to have an online shop where I would be able to taxi-related accessories as the website grows.

One limitation I have, like many other people do as well, is the finances, I wanted to invest a small amount and then keep reinvesting the profits I get from that back into the business.

Richard.curran, I quite like your LowPriceLessons website, there is nothing like that, as far as I know, so I think you should be able to make it a success very quickly.
Have you considered getting some Stickers printed and sending them to the instructors to place on their vehicles, similar to the Yell ones you find where they say "Find us on... ". That would be advertising for your website as well as for the instructor/driving school and they dont cost that much either.

Thanks for all the replies guys

Regards,

Richard.curran
14-02-2010, 05:53 PM
Richard.curran, I quite like your LowPriceLessons website, there is nothing like that, as far as I know, so I think you should be able to make it a success very quickly.



Thanks very much for saying so Sohaib! (Shamless plug approaching, take cover!) Please vote for me in the grand ideas section via your "my business kit". (/Shameless plug)

I really appreciate the comments and I really hope that it takes off. Currently I am finding there is a certain level of misunderstanding about the name, some instructors think it is a site for only low price lessons and don't feel their lessons are low enough priced, which is frustrating. The site is an attempt to lower their costs and therefore lower their price or at least allow them to offer a reduced rate.

I am offering them a free trial for three months, so it is a case of needing the site to take off fairly quickly as I want to get to a stage where by the volume of instructors on there really offers customers the best choice. Then it will be natural for the instructors to stay on board. If there is just one in a particular area then no matter how little I charge if they don't get bookings then they will leave.


Have you considered getting some Stickers printed and sending them to the instructors to place on their vehicles, similar to the Yell ones you find where they say "Find us on... ". That would be advertising for your website as well as for the instructor/driving school and they dont cost that much either.

Thanks very much for the tip, I have thought about it and it is the sort of thing that I could get done at a low cost if I got enough made so I will certainly look into it. Previously I was thinking I would hold off until a lot signed up so I would have someone to send it out to but I suppose it might be a better idea to have them made now if I can get a good price.

sohaib
14-02-2010, 06:03 PM
I really appreciate the comments and I really hope that it takes off. Currently I am finding there is a certain level of misunderstanding about the name, some instructors think it is a site for only low price lessons and don't feel their lessons are low enough priced, which is frustrating. The site is an attempt to lower their costs and therefore lower their price or at least allow them to offer a reduced rate.


I actually had this idea couple months back but I didnt have enough contacts in this industry or finance at that time to develop a website. And I have to say, your website looks great as well, you have done a much better job than I could have ever done.

I would suggest changing the name to something like "CompareLessonPrice.com" or "Compareyourinstructor.com", because from where I see it, thats what it is effectively doing; comparing instructors on the basis or vehicle, experience, rating, price etc.

I wish you good luck, and keep me posted on how it goes.

Regards,