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New business - Financial Model.

  • 19-08-2009 11:50am
    #1
    TheWaterboy
    Registered Users, Registered Users 2 Posts: 379 ✭✭


    Looking for some advice here - Basically Im hoping to launch a new service in the next few months. Pretty niche market. Basically suppliers of a certain product list their products on my site and users can purchase the product from the site. Supplier receives an email and ships product to buyer.

    Pretty simple model - however Im looking for advice on the financial model I should use. Would I charge suppliers a fee to list on the site and then a set % of the total cost of each transaction.

    I pay them every week / month and deduct transaction costs.

    Has anyone any advice on how to run something like this.


Comments

  • #2
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    TheWaterboy wrote: »
    Looking for some advice here - Basically Im hoping to launch a new service in the next few months. Pretty niche market. Basically suppliers of a certain product list their products on my site and users can purchase the product from the site. Supplier receives an email and ships product to buyer.

    Pretty simple model - however Im looking for advice on the financial model I should use. Would I charge suppliers a fee to list on the site and then a set % of the total cost of each transaction.

    I pay them every week / month and deduct transaction costs.

    Has anyone any advice on how to run something like this.

    Ebay?


  • #3
    SiDay
    Closed Accounts Posts: 21 ✭SiDay


    You could use the same model that many of the hotel portals use.

    The customer pays a deposit for the goods (say 10%) when they order from your website, this is your income. Your supplier then invoices for the other 90% when he delivers the goods.

    The advantages of this model are :-

    Suppliers are more likely to list on a new site if it does'nt cost them anything upfront.

    Your suppliers are likely to make more per unit even after your deduction than they would selling through retailers.

    It's very easy to administer - all the money collected through the site is yours.


  • #4
    knighted_1
    Closed Accounts Posts: 870 ✭✭✭knighted_1


    TheWaterboy wrote: »
    Looking for some advice here - Basically Im hoping to launch a new service in the next few months. Pretty niche market. Basically suppliers of a certain product list their products on my site and users can purchase the product from the site. Supplier receives an email and ships product to buyer.

    Pretty simple model - however Im looking for advice on the financial model I should use. Would I charge suppliers a fee to list on the site and then a set % of the total cost of each transaction.

    I pay them every week / month and deduct transaction costs.

    Has anyone any advice on how to run something like this.


    this is just dropshipping (google it ) widely used on ebay


  • #5
    Fergal C
    Registered Users, Registered Users 2 Posts: 298 ✭✭Fergal C


    knighted_1 wrote: »
    this is just dropshipping...

    You beat me to it. :)

    Some of the larger drop ship suppliers include;

    http://www.doba.com/
    http://www.worldwidebrands.com/
    http://www.salehoo.com/

    I've never used any of the above and I can't vouch for them. I would advise caution and recommend Googling for reviews before you decide on a supplier. Be especially wary of suppliers who require an upfront payment.


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