How will two different marketing and business development models handle the same fundamental mistake? Is there a right approach or a fool proof plan in starting a online business? What’s the biggest threat one can face.
Making the decision to start your own business and dedicate a lot of your time to try to grow and push forward a certain idea is certainly a big decision for any one. But as with any ongoing process the time you spend on preparation is somewhat underestimated.
If you start building a house and choose all the wrong materials it doesn't matter how hard you work and what building methods you use the house won't stand for long. With online business and Penny auction sites for that matter the situation is roughly similar; if you make even a single wrong choice when planning your future venture, sooner or later your past errors will crawl out from under the surface and back fire where it hurts the most.
Before I start to plan for anything I like to open my Murphy's law spreadsheet and meditate on it for few minutes before making any corner stone decisions that will form the frame work of my future plan (it doesn't matter is it a business plan Im working on or a road trip just a useful habit I worked out)
But I'm getting a little bit sidetracked. Now all of the above might seem like obvious things but let's consider the dangers of taking shortcuts in planning and harsh decision making when it comes to high risk online businesses like casual gaming or in our case penny auction sites when regarding two effective business development models.
The two main approaches a lot of entrepreneurs use are largely defined by the size of the project being launched but not always , everyone has an individual system of markers he uses when deciding to apply one method over the other.
Let's call the first method "aggressive development" The point is to build your sites online influence as fast as possible and ride out the momentum to reach even more costumers. The initial thought here is to achieve a reaction where people will think "there's a lot of people here must be worthwhile " if you manage to catch and navigate the initial buzz you can quickly build a developing client base that you can nurture later on. This strategy however dose requires a significant promotional budget. Not only will you have to organize a good advertisement campaign that will reach far and wide in to your target group but you'll also need to list impressive prizes on your site as your start up auction items. Expensive electronic goods like wide screen TVs and high performance computers, and other popular luxury items. In other words anything that will astonish your visitors when they land on your site via the advertisement campaign. Keep in mind that the demand might be higher than your supply and soon you might need to run as many as 20 live auctions per day to sustain the user's interest.
The second method is slower in development and building up a client base so we'll call the "a step by step approach"
This method is less demanding towards your advertisement expenses however it is more demanding in terms of paying closer attention to details, and largely benefits from a more personal touch. Try to narrow down your target group as best as you can. Find a way to address them personally on a popular forum or a portal they all visit, and offer prizes unique to the niche and people are pensioned about. There's no need to run 20 or even 10 live auctions a day when using this approach at least not while your project is still growing. The amount of auction events you should be able to run profitably is somewhere from 2 per day to 2-4 per week depending on your audience activity. Costumers like these brand new penny auction sites as they feel more connected with the owner not to mention that the competition is less aggressive and there's more chances to win. It's important to provide outstanding customer support and keep your clients as happy as possible. You should view every client as a potential source of good feedback and honest advertisement as word of mouth will be your strongest tool when developing your business.
Now both strategies are valid and have at large have a common goal - build a client base to make the auction site profitable. So where can things go wrong? You have to remember that when running a internet business you don't have a physical channel of communicating with your clients or conducting business like a store or a kiosk or anything of the sort. You fully relay on the tools that allow you to sustain an effective and functional presence online. If your site goes offline you immediately start to lose money. Now when you're starting a penny auction site there are two big components that you have to decide on when planning your project. A server host and penny auction software. And if it's always possible to change your hosting provider later on, switching the software platform is practically impossible. So when you decide what software pack you'll use to power and shape your site you need to be absolutely sure it won't let you down. Just remember that even a badly coded script can run well on a powerful server with just a small amount of visitors but when the site begins to hit its first waves of increased traffic it can easily fall apart as result immediately bringing down your site along with your hopes on success. When we apply this to the two strategies we described earlier we'll get the following.
"Aggressive development" After spending a large amount of money on advertisement and active marketing, as well as expensive prizes if you made a bad choice of penny auction software to operate your project you're site will immediately go down as you hit your first big wave of paying clients resulting in significant revenue losses and probably the fast declaim of your venture. Less chances to see your ROI period
"A step by step approach" It gets even nastier in this case. Since you start of slow it's often harder to predict how your site will behave under larger amounts of traffic might even happen that you won't see any trouble before it happens. But when finally all of your dedication and hard work begin to payoff in the form of converting traffic you start hitting trouble. Timer lag, accounts going down or the site just crashing. With trouble like that no amount of pre-existing word of mouth will be able to save you. And even after you realized your mistake and went out of your way to get a new software platform to replace the old one there is no guarantee that you won't have to start from scratch.
By no means is this mean that you don't have to start a penny auction site or that any project doomed to fail sooner or later. The point is simply this - don't take preparation lightly. Take your time and plan ahead. Evaluate the details correctly. For instance are you sure that an $800 script is enough to sustain a website with a turnover of over 20 000 a day? It's a complex product that you have to put your trust in, and then nothing will hold you back.
Responsible development of penny auction sites
To be completely true in answering this question we have to first understand what penny auctions are in truth. For some reason a lot of people think that penny auctions are discount sites and think of them as of sites like groupon and other daily deal sites. At a first glance this might be true because in both cases the site's lure in customers with extreme discounts on eye catching products. But the goals the two sites have are completely different and from a costumers point of view might seem somewhat sinister.
Why Do We Need Penny Auction Sites
Why do people go to online auctions, or better online penny auctions? Why are they becoming so popular and what makes an penny auction tick, making it different from regular options like ebay.
