5. Auction Site
OVERVIEW OF BUSINESS MODEL
Online auction sites are one of the fastest growing businesses on the Internet
today. Almost everyone knows at least one person who has either bought or
sold a product through an online auction service such as eBay or Yahoo!
Setting up an auction Web site may seem easy at first glance. However, the
popularity and success of online auctions has led to an explosion of these sites.
This has resulted in stiff competition among auction sites. You must find a
niche market—for example, rare collectibles, baseball cards, celebrity memorabilia,
or autographed items—to set yourself apart from the competition.
If you decide to open an online auction site, you will be using a special
computer program that places items up for auction on your Web site. People
interested in the auctioned item place bids. If you are using a good auction
program, then your computer will keep track of these bids and will finally close
the auction and notify the seller and the successful bidder. The bidder and seller
must arrange for the shipping of the item privately. Your sources of income will
be the commission earned from the sale of each item on your site or the fee
charged to submit an article and banner advertising revenue. Some auction sites
also include a membership fee for access to selling on the site.
SKILLS NEEDED
What you’ll need to embark on this opportunity is basic Web publishing and
digital imaging know-how, and an in-depth knowledge of the auction software
program you are going to use. You will also want a robust list of contacts with
items available for auction on your site or knowledge of Internet marketing to
spread the word about your business online.
COST TO START THIS BUSINESS
The cost to set up and run this type of business ranges from as low as $10,000
into the millions for a presence like eBay. The most expensive elements of the
startup will be the auction software and the extensive marketing needed to
launch this type of business. You will also have to pay for the design, development,
and hosting of your Web site.
NUMBER OF EMPLOYEES NEEDED TO START
The number of employees needed may change as the business grows. It will
depend on the volume of business you handle and the degree of automation of
your online presence. To start, one competent person can handle operations.
INTERNATIONAL POTENTIAL
Online auctions have strong international potential. Unless you are a specialty
site, anyone can place anything up for auction. It is the customer’s responsibility
to arrange for the transfer of auctioned items. So it is entirely possible for
someone in Zimbabwe to use your site to buy a lock of Elvis’s hair from someone
in Greenland.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 3 is most appropriate for an auction site. You will need some
sophisticated software and online payment processing (if you are going to take
care of the financial arrangements from your site) to be competitive in this
market.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
There is already a saturation of auction sites; some have proven to work and
others have flopped. Getting the buyers to your site will be the biggest challenge,
so once you build a somewhat dedicated audience, it’s important to be
responsive to their needs by incorporating a rating system that is regulated by
the users of your auction site. You want to develop a system to ensure that you
are paid your fee or commission if you don’t handle the financial transaction
from your site.
Niche auction sites still provide a great opportunity. Stamp auctions, coin
collector auctions, and similar types of niche auctions provide for easier marketing.
ONLINE MARKETING TECHNIQUES
• By asking if your customers would like to be kept updated on any great
deals in their field of interest, permission marketing could be one of
your greatest assets. For example, an Elvis fan might be interested in
knowing when an Elvis-related item comes up for auction.
• Banner exchange and banner advertising on sites that have the same
target market you do can be very effective.
• Consider using viral marketing. This will allow your customers to invite
friends to join the auction site. If users see something a friend might
like, they will most likely pass on the information.
• Develop a sponsored listings campaign to bid on appropriate keywords
with the popular search engines.
• Develop and implement a comprehensive link strategy.
ADDITIONAL INCOME
Banner advertising can generate a substantial income as long as you have a lot
of visitors to your site.
ONLINE EXAMPLES
eBay
http://www.ebay.com
eBay is synonymous with online auctions in the same way as Nike is synonymous
with sneakers.
uBid
http://www.ubid.com
Another well-designed auction site. Not as omnipresent as eBay, but a welllaid-
out site nonetheless.
6. Auto Advice
OVERVIEW OF BUSINESS MODEL
Through providing sound advice to visitors wondering how to solve a problem
with their current automobile or whether or not to purchase a certain year or
make of automobile, you have the opportunity to develop a nice little business.
If you offer your visitors quality auto advice, they will return to your site again
and again to see how your advice can help them to maintain a better, longerlasting
automobile.
Advice Web sites allow you to “data-mine” in targeted markets. Consider
your users as your source of income. The more visitors you have and the more
information you gather from the people you counsel, the better. There are a lot
of permission marketing opportunities available with this type of business. You
can ask your visitors for permission to send them specific types of information
and then you can charge a sponsorship or advertising fee to those suppliers
who have information they want distributed to these opt-in lists.
Your main source of income will be from selling banner advertising on your
site to businesses that share the same target market—automobile retailers, used
car dealers, after-sale product suppliers, and auto parts suppliers. Since this
type of business targets individuals interested in automobiles, you are providing
an optimal banner advertising opportunity for all businesses in the auto
industry.
SKILLS NEEDED
This form of business requires that you have expert knowledge in the area of
automobiles. If you don’t offer quality advice, your visitors will notice and will
not return to your site. This could seriously hinder the profitability of your
business.
COST TO START THIS BUSINESS
The cost to start this type of business ranges from approximately $1,000 to
$5,000. Initially you will have to pay for the design, development, and hosting
of your Web site. Additional costs associated with starting this type of business
include online and offline advertising costs.
NUMBER OF EMPLOYEES NEEDED TO START
Typically, one part-time person is needed to run this type of business, depending
on the volume of requests received from visitors.
INTERNATIONAL POTENTIAL
This business has high international potential.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 1 is most appropriate for this type of business.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
It is important that you offer sound advice on your site. If you offer advice that
is incorrect or inappropriate, it could seriously hinder your business potential.
You should place a disclaimer on your site in case this problem arises. This will
exclude you from any legal action that may result from accidents or damages
resulting from your automotive advice.
ONLINE MARKETING TECHNIQUES
• Viral marketing with a catchy “Tell a Friend” element would be appropriate
for this type of site.
• Make sure there are plenty of areas on your Web site that encourage
users to provide their e-mail address—for example, “Click here if you
would like to be notified when we update our advice column.” You
could also have product-specific mail lists to which visitors could opt
in. Having an RSS feed to let subscribers know when you add new
content is another neat feature to generate targeted traffic.
• Participate in newsgroups, mailing lists, and discussion forums related
to automobiles with a cleverly designed signature file.
• Have your Web site listed and linked from as many auto-related directories,
meta-indexes, and Web sites as possible.
• Develop a sponsored listings campaign to bid on appropriate keyword
phrases with the popular search engines.
• Develop online press releases and have them distributed to as many
automotive-related publications and e-zines as possible.
• Web ring participation can have a significant impact on traffic, as there
are many auto-related Web rings accessible from Webring.org and
Looplink.com.
ADDITIONAL INCOME
There are plenty of avenues to create additional income in the advice Web site
business. You can set up mailing lists targeted toward specific car owners and
sell or provide sponsorship opportunities to industry partners that want to reach
that target market. For example, you could have a Volkswagen mailing list, or
for an even more targeted approach you could have a Volkswagen Beetle mailing
list. The possibilities are endless. You can ask people if they would like to
receive different auto maintenance advice via e-mail daily. This form of permission
marketing enables you to send them an e-mail at their request. Proper use
of these targeted lists could result in a tremendous money-making opportunity
for your business due to the nature of readership.
ONLINE EXAMPLES
AutoAdvice.com
http://www.autoadvice.com
An in-depth site offering auto advice and tips on how to buy a new car.
FreeAutoAdvice.com
http://freeautoadvice.com
This site is operated by a collection of mechanics and technicians who repair
cars.
7. Banner Ad Designer
OVERVIEW OF BUSINESS MODEL
One of the primary forms of advertising on the Internet today is through banner
advertisements placed on high-traffic Web sites. Banner ads quite often are
designed by a graphic designer. With the Internet growing at an exponential
rate, more small businesses are going online. Most of these small businesses
can’t afford to have their own in-house graphic designer, so they have to outsource
the creation of their ads to outside firms.
As a banner ad developer, you will take requests for banner ads via e-mail.
After consulting with customers via e-mail or phone, you will construct a banner
ad that meets their requirements and price. The revenue will come from the
payment for these services.
SKILLS NEEDED
The most important set of skills for creating banner ads lies in superior graphic
design abilities. Familiarity with the standard graphical programs is a must.
More recently, however, animated banner ads have become quite popular. To
create these types of ads, you will need to be familiar with the Java programming
language or Macromedia Flash.
COST TO START THIS BUSINESS
Costs can be minimal to begin this business if you have a computer and the
proper software needed to complete the work. Most graphic designers have the
necessary hardware and software and are more than capable of designing and
developing their own Web site.
NUMBER OF EMPLOYEES NEEDED TO START
One part-time person can start this business.
INTERNATIONAL POTENTIAL
The international potential for this business is without limits. If your graphics
are catchy, your ads will be noticed and you no doubt will be contacted for
your services. If a client requests banners in another language, have them provide
the text and there should be no problem.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 1 or 2 is appropriate for this type of business. You will be taking requests through e-mail, but since the
customers will desire input into the creative process, you will be in contact with
them over the phone and they can pay you directly.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
Online competition could be formidable. For this reason, great design and excellent
customer service are very important. The graphical presentation of your
own Web site is of particular importance. Show off your stuff and have an area
for client samples and testimonials viewable to the public.
ONLINE MARKETING TECHNIQUES
• Develop a comprehensive link strategy. Establishing links from related
sites such as online marketing e-zines, ad agencies, and newsletters is an
excellent way to bring targeted business to your Web site.
• Circulate a series of dynamite banner ads for your own services.
• Develop a sponsored listings campaign to bid on appropriate keyword
phrases with the popular search engines.
• Participate in marketing mail lists, Usenet newsgroups, and forums.
ADDITIONAL INCOME
By increasing your services into related fields such as graphic corporate ID
development, e-book covers, e-brochure development, and Web site development,
you could expand your income.
ONLINE EXAMPLES
Addesigner.com
http://www.addesigner.com
This Web site lets you design your own banner ads in a short time and then
download them if you are a member. The banner ads are of the simplest kind,
but it is a good low-end solution for some businesses.
Mouser Art
http://www.mouserart.com
A typical small entrepreneurial Web site. However, the excellent site design and
layout gives the site a really professional feel.
OVERVIEW OF BUSINESS MODEL
Online auction sites are one of the fastest growing businesses on the Internet
today. Almost everyone knows at least one person who has either bought or
sold a product through an online auction service such as eBay or Yahoo!
Setting up an auction Web site may seem easy at first glance. However, the
popularity and success of online auctions has led to an explosion of these sites.
This has resulted in stiff competition among auction sites. You must find a
niche market—for example, rare collectibles, baseball cards, celebrity memorabilia,
or autographed items—to set yourself apart from the competition.
If you decide to open an online auction site, you will be using a special
computer program that places items up for auction on your Web site. People
interested in the auctioned item place bids. If you are using a good auction
program, then your computer will keep track of these bids and will finally close
the auction and notify the seller and the successful bidder. The bidder and seller
must arrange for the shipping of the item privately. Your sources of income will
be the commission earned from the sale of each item on your site or the fee
charged to submit an article and banner advertising revenue. Some auction sites
also include a membership fee for access to selling on the site.
SKILLS NEEDED
What you’ll need to embark on this opportunity is basic Web publishing and
digital imaging know-how, and an in-depth knowledge of the auction software
program you are going to use. You will also want a robust list of contacts with
items available for auction on your site or knowledge of Internet marketing to
spread the word about your business online.
COST TO START THIS BUSINESS
The cost to set up and run this type of business ranges from as low as $10,000
into the millions for a presence like eBay. The most expensive elements of the
startup will be the auction software and the extensive marketing needed to
launch this type of business. You will also have to pay for the design, development,
and hosting of your Web site.
NUMBER OF EMPLOYEES NEEDED TO START
The number of employees needed may change as the business grows. It will
depend on the volume of business you handle and the degree of automation of
your online presence. To start, one competent person can handle operations.
INTERNATIONAL POTENTIAL
Online auctions have strong international potential. Unless you are a specialty
site, anyone can place anything up for auction. It is the customer’s responsibility
to arrange for the transfer of auctioned items. So it is entirely possible for
someone in Zimbabwe to use your site to buy a lock of Elvis’s hair from someone
in Greenland.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 3 is most appropriate for an auction site. You will need some
sophisticated software and online payment processing (if you are going to take
care of the financial arrangements from your site) to be competitive in this
market.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
There is already a saturation of auction sites; some have proven to work and
others have flopped. Getting the buyers to your site will be the biggest challenge,
so once you build a somewhat dedicated audience, it’s important to be
responsive to their needs by incorporating a rating system that is regulated by
the users of your auction site. You want to develop a system to ensure that you
are paid your fee or commission if you don’t handle the financial transaction
from your site.
Niche auction sites still provide a great opportunity. Stamp auctions, coin
collector auctions, and similar types of niche auctions provide for easier marketing.
ONLINE MARKETING TECHNIQUES
• By asking if your customers would like to be kept updated on any great
deals in their field of interest, permission marketing could be one of
your greatest assets. For example, an Elvis fan might be interested in
knowing when an Elvis-related item comes up for auction.
• Banner exchange and banner advertising on sites that have the same
target market you do can be very effective.
• Consider using viral marketing. This will allow your customers to invite
friends to join the auction site. If users see something a friend might
like, they will most likely pass on the information.
• Develop a sponsored listings campaign to bid on appropriate keywords
with the popular search engines.
• Develop and implement a comprehensive link strategy.
ADDITIONAL INCOME
Banner advertising can generate a substantial income as long as you have a lot
of visitors to your site.
ONLINE EXAMPLES
eBay
http://www.ebay.com
eBay is synonymous with online auctions in the same way as Nike is synonymous
with sneakers.
uBid
http://www.ubid.com
Another well-designed auction site. Not as omnipresent as eBay, but a welllaid-
out site nonetheless.
6. Auto Advice
OVERVIEW OF BUSINESS MODEL
Through providing sound advice to visitors wondering how to solve a problem
with their current automobile or whether or not to purchase a certain year or
make of automobile, you have the opportunity to develop a nice little business.
If you offer your visitors quality auto advice, they will return to your site again
and again to see how your advice can help them to maintain a better, longerlasting
automobile.
Advice Web sites allow you to “data-mine” in targeted markets. Consider
your users as your source of income. The more visitors you have and the more
information you gather from the people you counsel, the better. There are a lot
of permission marketing opportunities available with this type of business. You
can ask your visitors for permission to send them specific types of information
and then you can charge a sponsorship or advertising fee to those suppliers
who have information they want distributed to these opt-in lists.
Your main source of income will be from selling banner advertising on your
site to businesses that share the same target market—automobile retailers, used
car dealers, after-sale product suppliers, and auto parts suppliers. Since this
type of business targets individuals interested in automobiles, you are providing
an optimal banner advertising opportunity for all businesses in the auto
industry.
SKILLS NEEDED
This form of business requires that you have expert knowledge in the area of
automobiles. If you don’t offer quality advice, your visitors will notice and will
not return to your site. This could seriously hinder the profitability of your
business.
COST TO START THIS BUSINESS
The cost to start this type of business ranges from approximately $1,000 to
$5,000. Initially you will have to pay for the design, development, and hosting
of your Web site. Additional costs associated with starting this type of business
include online and offline advertising costs.
NUMBER OF EMPLOYEES NEEDED TO START
Typically, one part-time person is needed to run this type of business, depending
on the volume of requests received from visitors.
INTERNATIONAL POTENTIAL
This business has high international potential.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 1 is most appropriate for this type of business.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
It is important that you offer sound advice on your site. If you offer advice that
is incorrect or inappropriate, it could seriously hinder your business potential.
You should place a disclaimer on your site in case this problem arises. This will
exclude you from any legal action that may result from accidents or damages
resulting from your automotive advice.
ONLINE MARKETING TECHNIQUES
• Viral marketing with a catchy “Tell a Friend” element would be appropriate
for this type of site.
• Make sure there are plenty of areas on your Web site that encourage
users to provide their e-mail address—for example, “Click here if you
would like to be notified when we update our advice column.” You
could also have product-specific mail lists to which visitors could opt
in. Having an RSS feed to let subscribers know when you add new
content is another neat feature to generate targeted traffic.
• Participate in newsgroups, mailing lists, and discussion forums related
to automobiles with a cleverly designed signature file.
• Have your Web site listed and linked from as many auto-related directories,
meta-indexes, and Web sites as possible.
• Develop a sponsored listings campaign to bid on appropriate keyword
phrases with the popular search engines.
• Develop online press releases and have them distributed to as many
automotive-related publications and e-zines as possible.
• Web ring participation can have a significant impact on traffic, as there
are many auto-related Web rings accessible from Webring.org and
Looplink.com.
ADDITIONAL INCOME
There are plenty of avenues to create additional income in the advice Web site
business. You can set up mailing lists targeted toward specific car owners and
sell or provide sponsorship opportunities to industry partners that want to reach
that target market. For example, you could have a Volkswagen mailing list, or
for an even more targeted approach you could have a Volkswagen Beetle mailing
list. The possibilities are endless. You can ask people if they would like to
receive different auto maintenance advice via e-mail daily. This form of permission
marketing enables you to send them an e-mail at their request. Proper use
of these targeted lists could result in a tremendous money-making opportunity
for your business due to the nature of readership.
ONLINE EXAMPLES
AutoAdvice.com
http://www.autoadvice.com
An in-depth site offering auto advice and tips on how to buy a new car.
FreeAutoAdvice.com
http://freeautoadvice.com
This site is operated by a collection of mechanics and technicians who repair
cars.
7. Banner Ad Designer
OVERVIEW OF BUSINESS MODEL
One of the primary forms of advertising on the Internet today is through banner
advertisements placed on high-traffic Web sites. Banner ads quite often are
designed by a graphic designer. With the Internet growing at an exponential
rate, more small businesses are going online. Most of these small businesses
can’t afford to have their own in-house graphic designer, so they have to outsource
the creation of their ads to outside firms.
As a banner ad developer, you will take requests for banner ads via e-mail.
After consulting with customers via e-mail or phone, you will construct a banner
ad that meets their requirements and price. The revenue will come from the
payment for these services.
SKILLS NEEDED
The most important set of skills for creating banner ads lies in superior graphic
design abilities. Familiarity with the standard graphical programs is a must.
More recently, however, animated banner ads have become quite popular. To
create these types of ads, you will need to be familiar with the Java programming
language or Macromedia Flash.
COST TO START THIS BUSINESS
Costs can be minimal to begin this business if you have a computer and the
proper software needed to complete the work. Most graphic designers have the
necessary hardware and software and are more than capable of designing and
developing their own Web site.
NUMBER OF EMPLOYEES NEEDED TO START
One part-time person can start this business.
INTERNATIONAL POTENTIAL
The international potential for this business is without limits. If your graphics
are catchy, your ads will be noticed and you no doubt will be contacted for
your services. If a client requests banners in another language, have them provide
the text and there should be no problem.
E-BUSINESS MODEL/PAYMENT PROCESSING METHOD
E-business level 1 or 2 is appropriate for this type of business. You will be taking requests through e-mail, but since the
customers will desire input into the creative process, you will be in contact with
them over the phone and they can pay you directly.
IMPORTANT BUSINESS ISSUES TO BE ADDRESSED
Online competition could be formidable. For this reason, great design and excellent
customer service are very important. The graphical presentation of your
own Web site is of particular importance. Show off your stuff and have an area
for client samples and testimonials viewable to the public.
ONLINE MARKETING TECHNIQUES
• Develop a comprehensive link strategy. Establishing links from related
sites such as online marketing e-zines, ad agencies, and newsletters is an
excellent way to bring targeted business to your Web site.
• Circulate a series of dynamite banner ads for your own services.
• Develop a sponsored listings campaign to bid on appropriate keyword
phrases with the popular search engines.
• Participate in marketing mail lists, Usenet newsgroups, and forums.
ADDITIONAL INCOME
By increasing your services into related fields such as graphic corporate ID
development, e-book covers, e-brochure development, and Web site development,
you could expand your income.
ONLINE EXAMPLES
Addesigner.com
http://www.addesigner.com
This Web site lets you design your own banner ads in a short time and then
download them if you are a member. The banner ads are of the simplest kind,
but it is a good low-end solution for some businesses.
Mouser Art
http://www.mouserart.com
A typical small entrepreneurial Web site. However, the excellent site design and
layout gives the site a really professional feel.
