What track to take???

[amesibub]

I own www.lot123.com.au but I'm confused as to what path to take next.

People don't want to list their products because there's no buyers.

However, buyers don't want to come to the site if there's no products.

I've gone on a strategy of going to companies, listing their items and I'm looking after them for a commission. I've only been able to get about 10 companies to do this with, but it has build item numbers up dramatically.

What I want to know is... How can I attract both Buyers And Sellers if both are being stubborn?... haha

Thanks!
Amie

[Scott Taylor]

let sellers list free, theres no advertising better than free advertising.. get traffic and the sellers will eventually come in flock. Remember that everything takes time, it could be year before this will become a profitable company, could be longer... just dont expect it to become the next eBay tomorrow.

[amesibub]

Scott...

I certainly don't expect to take over eBay too quickly to even think I could is ridiculous...

The thing is.. I do offer free listings...... and only 3% sale fee.

I'm starting a campaign over the weekend to try and get more people to use their affiliate methods to obtain new members and get more Credits on the website (pays for fees, sms messages, etc)

I will just have to keep plugging away and try any methods I can

[akhan]

Hi Amie,

You could also adopt a completely different revenue model. In this model, the use of the site by sellers and buyers will be 100% FREE, income will be generated from advertising.

Free services usually attract high traffic and as the traffic grows your advertising revenue should also grow with it.

Hope you succeed in this venture.

[fattony]

I was thinking of setting up a site reselling domains (still might). But as you say its impossible to get people to browse or sell on an auction site thats empty. Its a big dilemma. Now the idea i came up with (dont know if this has been done before) was to make it look like there was activity on the site.

1st step for me: would be buying about 200 domains, some good some bad, and then listing them on the site.

step 2: create 20 or so users and start bidding on the different items( in effect buying back your own domains)

step 3: peolpe will see theres some activity and might list there domain. Now, you have got to makes sure there domain gets bought. Bid a few times on it with different a/cs. Dont pay them too much but give them a fair price.

step 4: Resell that domain on ebay, namepros, webmaster-talk, sedo or whereever to get your money back.Try your hardest to sell it quick and for the same price you bought it, then buy another domain.

step 5: keep doing this until there is enough users to sustain a market

Now i know its not a perfect plan and doing this all by yourself would be impossible, but get your freinds, family, partners to help and your site should take off. Also (do what akula said and make the site COMPLETELY FREE TO LIST AND BUY). One problem is this would require a lot of capital minimum 10-15000 dollars.

The reason my plan could work though is that its a niche, im selling only one product.Your problem is that you are catering for too many product types.(more than ebay even) so my advice is pick 1 product area and follow the plan above. once you are off the ground break into other areas. its expensive but its the only way to get people to use your site. Hope this helps.

BTW the site looks awful too

[3ntrepreneur]

^^^is a lot of help. When i visited your site I was a bit confused. Maybe fixing the design would help.

[akula]

amie,

i've been through what you're going through a lot more times than I care to remember.

all of the (very helpful) posts above - as helpful as they are - will do little to solve your problems. Chucking a kitchen sink full of rhetoric and guesses at your startup - is not the best course of action.

the only solution that you do have is to get to get back to basics. This means:

a) Make the right decisions as an investor (i.e. whether you should be doing this venture, and in what form) by way of b) Doing the right things as a founder.

Look, unless you specifically request it - I am not gonna do a unsolicited post of how to practice entrepreneurship.

The only quick answer is this; you must approach your customers - do qualitative surveys and offer them a competitive value proposition as a result of doing those surveys. That way - you'll both have a killer product and plenty of people who've indicated that they're gonna be buying it.

what not to do: continue doing what you've already been doing. you started a company without doing primary market research. and now, you're living through the results of making this decision.

you gambled on the assumption that you know what people want, and you were wrong. by coming up with a yet another "101 ideas" list, you will have made another 101 wild guesses (again), which is not what you need to do to salvage your startup.

you need to do a good job as a founder. This means going back to the Silver equation.

[nado]

Yep, I agree akula.

The major thing I would be thinking is "why would an aussie use lot123 over ebay?"

And ebay is not your only competitor in the online auction market (a simple search in the forums will bring up at least 3 others).

Since you've already started though, I'll share an idea I had a while back which sort of follows on from what others have said.

The two major flaws I see with ebay is their security and their fees.

Security

People continue to get ripped off by others on ebay. It's happened to my dad twice, even though the seller had excellent feedback.

One solution would be to actually act as a 3rd party cushion between the buyer and seller.

What I mean by this is ensuring that the buyer gets what they paid for and the seller gets what they sold for.

So maybe:

1) Auction complete
2) Buyer pays money to the 3rd party (i.e. you)
3) Seller sends the goods to the 3rd partys nearest postage/handling warehouse
4) 3rd party checks to see that the goods are undamaged and what the buyer was after
5) If all is good, the 3rd party sends that onto the buyer and pays the money to the seller if all turns out to be good

... though of course that would be an expensive operation and a logistical nightmare. But at least you can be 99.9% sure that no scams will occur.

Fees

Make it COMPLETELY FREE.

Run ads. Sure you're income will be a lot less, but at least there will be traffic and users.

And give sellers the ability to place and pay for their ad banner to be displayed around the site.

e.g. someone might be selling a digital camera and want some extra exposure on the site. They can pay (cheaply) for a banner to be displayed to people when they're on the "digital camera" page.

The Something Awful forums do this, and they are an absolutely massive forum, but they allow members to place ads and publicly shame and humiliate other users by paying to add a few 'nice' words around the place... it's lots of fun

You can then also charge for additional features, such as auction video, podcast, ways-to-stand-out etc

Other Stuff

A lot of Ebay's success I think has come from their buyout of PayPal and in a way has helped lock out competition.

What I would do if I were doing an online auction site is start my own PayPal-like system. Or, better yet, partner with Google and exclusively use their new GBuy system which is soon to be released in return for long-term advertising.

And also remember to focus on being "completely Australian owned and operated".

BUT, do not compare yourself to or mention eBay at any time during your marketing/advertising campaigns... you don't want them to see you as a threat.

http://marketingplaybook.com/the_5_marketing_plays.php


Hope that helps

cheers
nathan

[akula]

amie,

if you've got a dog on your hands, there's nothing you can do to disguise the fact that it's not a cat.

likewise, if you've got a fundamentally unsound start up on your hands - there is no use in applying gimmickry, smoke and mirrors - to disguise the fact that there is no demand for what ever you're doing.

the early auction places overcame the catch 22 you're talking about because there was evidence of unmet demand for what they were selling. there is no evidence of unsatisfied demand for what you have on offer.

if there is no demand - and you're not gonna be creating it - you're dead in the water and there is nothing you can do but change what ever it is you have on offer.

i.e. changes to your marketing plan will not overcome the fact that there is no demand for what you're selling, because this demand has been satisfied by your competition who you're not in a position to compete with, because you've chosen to compete in a market where you can't win.

these problems are less visible when people do a good job of being both investors in and founders of startups. if you rewind the clock; you'll find that there probably wouldn't be even 100 in Geelong who'd tell you that there is a need for a new online auctions market.

it's brutal.

[NeeJam]

All i can say is your site is offering to many sections, downgrade them.

Work on one particular niche i.e. Selling Electroincs ok this is still a big section but then you can take a chunk of the market share of people like eBay and eventually introduce a couple more sections i.e. Clothes etc.

Then you will have a sustainable traffic already coming to your site and then you can start builing up your auction website.

Also make it free, place ads on it. Ok your not going to make loads of this until your getting decent amount of traffic about 3000 uniques daily + and then you'll be recieving a decent amount of money from this.

Plus make sure you offer buyer protection so they don't get scammed, then you'll get more people going onto your site as they will go i won't get scammed there and i can still get it for a low price, so then you've built a nice reputation for yourself and are getting decent traffic.

Anyways that my advice.

[907Group]

Hi Amie,

Lot of people here made very good points and I agree with them as well.

Website like yours take lot of time to build and money to advertise the site to bring in traffic. It's very difficult to do this without having any funds.

1. You said so yourself, you are not in for this for much profit so like everyone said. Make your site FREE! there are plenty of sites that still make profits from giving things away for free but in exchange you get visitors and things will start picking up. If you are worried about making money on the site? you can insert ads to generate income for you. Once you get traffic flowing steadily, you can sign up for many advertising programs to generate income that way instead of fees from the sellers.
Few ads throughout the site and popup/popunder advertising wouldn't hurt because the site is free (people tolerate that and use to it).

2. I'm going to be honest and up front with you about this. You have your picture and little words about who you are right on the front. REMOVE IT! You are using valuable space.. I'm not saying anything bad against you but you want to attract people by placing items that are on the aucton! That area is the key because most computer screens are fixed at certain screen size and thats where people look at. You already have link for "My Story" section, if people want to visit about you they can click on that link on the left side. First impressions count and people are there to buy/sell items and want to see what those items are fast! As of right now, people could be thinking of your site as not so professional because it looks like a blog/myspace.. some people might be turned off by it<-- sorry if I'm being too harsh but I'm looking at this as business aspect. Look at ebay's site on the main page.. you see the same area? they have items displayed! so people will stay a while to browse around and maybe buy items. Use your webpage wisely and definitely needs to get organized.

3. I'm not too offended but there are people who do not like seeing "Adult or XXX" posted on anywhere on the site. You have XXX on the top right corner as your partner site. Your "personals" site? hmm If you want.. you can put your partner links on the bottom of the page instead of top location. Use that space for your auction item links or something... I strongly suggest redesign of the site... or least move things up a bit so people don't have to scroll down at to see some items. MOST PEOPLE WILL CLICK "X" button at first look.

Best luck to you..hope some of this helps.

[amesibub]

Hey everyone, I just wanted to say thanks for keeping the posts coming. I will be away for a couple of days sick. I went to hospital the other night and am still recovering.
This is a standard message I'm putting on all threads I'm subscribed too so people don't think I'm too chicken to reply or something.
I will reply when I get back
Thanks and take care,
Sparky

[akula]

you know, I've been thinking about this deal, and there is an available course of action you can pursue which has higher chances of making yours a successful startup than other courses of action.

I can write more if you'd like.

[amesibub]

I would really appreciate you writing more

I will read it when I get back on top of things. Should be in a day or so

Thanks Akula *hugs*

Cheers,
Sparky

[akula]

ok, good. I'm writting a post to outline the kind of problem you're having and the possible way to solve this problem, so as to achieve superior results using your existing resources. having read this post, I do encourage you to take action.

the problem: you're at a competitive disadvantage and what you're currently doing breaches the rule that you shouldn't compete if you don't have a competitive advantage.

Specifically, you're competing with Ebay, Amazon and a number of other listed companies for the same customers. If you continue doing this, and play on their turf, using their rules (i.e advertise on Adwords etc): you will lose, because there is no reason that you should win.

the bad solution: to win in online auction markets you can apply disruptive and incremental innovation. Even though you're probably not aware of it - that's what you're doing now by implementing different features to that of Ebay in the hope that these features will attract customers who would otherwise go to Ebay. That's called incremental innovation, and it's the worst of three options available to you. Businesses who invent better mouse traps do not survive.

Then there is disruptive innovation. Typically, in any other industry but online auctions - this would require you to target Ebay's unwanted customers as Ebay continues to place emphasis on more profitable customers, and leaves the unprofitable ones for you to pick on. This won't work in your industry because Ebay is a long tail business. Unlike pawn shops, they specialise in fulfilling everyone's need - even if you're selling a single pez dispenser. I.e. you won't find people who were prohibited from selling their item on Ebay because their listing price was either too small or too large.

In other words - what you shouldn't be doing is trying to win in your market using innovation because neither disruptive or incremental innovation is a good bet in your circumstances.


the right solution: If you want to win - you need to stop competing with Ebay for customers. That's where you're disadvantaged. You need to target customers with different needs than those of Ebay sellers.

Specifically - what you should be engaged in are point of sale loyalty programs. This is the niche where you can win.

- The problem: In your local area and Melbourne, there are malls. These are ultra competitive hubs of commerce with multiple vendors fighting in close quarters for the same foot traffic.

For shop keepers doing business in these places is all about cashflow and repeat purchases because their overheads are very high. What these shopkeepers need is a tool to help make sure that they don't lose the people who entered their shop and a tool that helps make sure their existing customers buy from them again.

- The solution: To help mall shopkeepers both retain customers and convert prospects, you can pitch them your online market place where they can list their entire inventory, or items on sale - or overstocked items that need to be liquidated.

You will send out a brochure, and instructions for how to use this online market place. This pack will include an option for you to organise the printing of pamphlets for the shop in question, using the money you charged them for setting up their online store. These pamphlets will be available on the shop counter.

-Example: Recently I visited a shoe shop in my local mall. I didn't find anything I wanted, but I did have the option to leave my email address at the counter and subscribe to the shops newsletter.

A day later, I received an email from the shoe shop directing me to their online shop where I could browse their selection of shoes and other recommended items from other shops in the lot123.com.au electronic mall. Likewise, I expressed an interest to be notified of a future time when the shoe shop had items on sale. I received such a notification the next week. Liked what was on offer. Went to the mall and bought the shoes.

Finally: So what I am saying to you is this: if you're gonna be characterised as an online auctions market place - you're buggered. If you, however, characterise your self as Australia's largest mall which existing small businesses use to compliment their marketing mix: then you have a foot to stand on.

People will say things like: "Hell, they could turn out to be bigger than Westfield", and "Wow. This really works. Lot123's customers end up working as an involuntary sales force for the online mall".

So. This is a way you can solve your problem of competitive disadvantage by targeting customer Ebay does not want, using a different value proposition: it's not about "Will help you sell online", it's about "Hey, everyday you have hundreds of people walking out your shop without buying anything - and this product makes sure that you keep in touch with those prospects".