Chapter 147 - 147 This Is Your Profit Model? Of Course It"s Normal To Make A Loss
147 This Is Your Profit Model? Of Course It’s Normal To Make A Loss
Luo Feng could be said to be quite ruthless, and his questions were very sharp.
Xie Yan and the others were stunned on the spot. They seemed to have never thought about what Luo Feng had said. In the early stages of the website, they had completely relied on their pa.s.sion. To put it bluntly, it was driven by their dreams.
His words woke them up from their dreams. They had really not investigated the format of the market carefully. There were actually so many potential compet.i.tors.
Xie Yan panicked.
Luo Feng acted as if he did not see everyone’s solemn expressions and continued, “There’s another very important question. Where’s your profit model?”
“We once… experimented with charging a 2% commission…” Xie An’s voice was as soft as a mosquito.
“Then let me guess. After you started charging, there was a large loss of users, right?” Luo Feng said heartlessly.
Xie Yan and the others’ expressions became even uglier. They hated being criticized by strangers. What was even more infuriating was that this stranger was very right.
Luo Feng did not need to guess to know that the main target audience of the website service was students without income. They were not merchants nor businesses. They sold second-hand goods to recover some of the cost.
They still wanted to collect commission? The university students chose to trade offline. Not to mention that there was a similar website nearby.
Everyone kept nodding. After a large number of users left, they had an internal discussion and came to a similar conclusion as Luo Feng. This was also why they had never been able to make a profit.
Xie Yan thought that it was because the users had yet to rely on the website. After the success of hunger marketing, it would definitely be time for them to earn money.
However, they no longer had the money to support it before users got used to the website.
Luo Feng said casually, “Don’t tell me you only thought of collecting commissions as a profitable line?”
“Of course not!” A girl said stubbornly, “We can still sell advertis.e.m.e.nts. Several advertisers have looked for us!”
Luo Feng looked at her stubborn expression and said, “Then why don’t you sell it? I’ve seen your page. The advertis.e.m.e.nt s.p.a.ce is filled with warm notifications. There are no advertis.e.m.e.nts. I guess it’s not a serious advertis.e.m.e.nt to be able to find a small website for university students.”
The few of them looked at each other with shame and stopped refuting.
Luo Feng was really right.
When large companies placed advertis.e.m.e.nts, they would definitely go to a large website with a larger number of users. The advertisers who came to look for Xie Yan to cooperate were either for mahjong or to loan money.
University students who have yet to enter society were simple-minded and had broad horizons. It was inevitable that their consumption would increase. Many illegal small loans had targeted this. More than one company had found Xie Yan.
The advertising fee they promised was very generous. After all, small loans were very profitable and they were not short of money.
However, Xie Yan’s conscience did not allow him to take on the loan advertis.e.m.e.nt, so he rejected them sternly.
The team had always looked down on despicable businesses that took advantage of loopholes. It was just that they did not expect themselves to bring up these advertis.e.m.e.nts one day to give them face. They were even ruthlessly exposed.
Luo Feng’s eyes were like poisonous spikes, sinister and accurate.
Xie Yan was so ashamed that he could not raise his head.
Actually, he had long known the weight of his website. This was because he had gone out to pull advertis.e.m.e.nts. Only a few small businesses in the nearby student business were willing to get advertis.e.m.e.nts. Powerful companies did not even look at them.
Luo Feng felt that their position was too poor. “The consumption power of the student faction might not be weak in terms of consumption for themselves. However, wanting to earn their intermediary fees is similar to taking advantage of them in their eyes. Moreover, if you want to make a profit, there are still too few users.”
How much money could students have in this era where the economy was still slowly growing? Every cent must be spent on the blade.
In their school, the average student’s living expenses were about 800 yuan. Other than food, daily expenses, and other expenses, they occasionally had to buy books. The students had to plan their expenses under this standard of living.
Since he had already come to this point, Luo Feng might as well say a few more words. “Big companies don’t set their sights on the present when they place advertis.e.m.e.nts. Instead, they pay attention to the nurturing of potential customers. Even though there are many users on your website, their activity is very low, right? They will only log in to take a look when they are buying and selling things. Do you think the advertis.e.m.e.nts placed under such circ.u.mstances will be effective?”
“No.” Xie Yan lowered his head to his chest. “It won’t be of any use not only for the current effect but also for future development.”
“Yes.” Luo Feng nodded. Xie Yan had a good personality.
“Do you have anything else to say?” Xie Yan’s voice was dry.
The company had been open for half a year, but there were still so many problems. Xie Yan knew that he had failed in his duty.
Luo Feng dragged a chair and sat down. He said bluntly, “Do you know what’s the most important thing about an all-rounded second-hand website?”
“What?”
“Reputation! And it’s the user’s reputation! Think about it. How can you guarantee the quality of the things sold by the user and whether the description matches the real thing? How can you guarantee that the buyer will pay voluntarily after receiving the goods?”
“I don’t think I’ve encountered such a problem.” Xie Yan scratched his head.
“That’s because the customer base is small and the circle is small. Moreover, they’re all university students. Everyone has their own ethics and knows how to protect their reputation,” Luo Feng said. “If we expand the customer base outside the school, do you expect to be exposed on the school forum after suffering a loss in the future?”
Luo Feng was not scaring them.
He had seen real second-hand websites in the future. This was even on the basis that the shopping website was already mature. It could only develop normally with the reputation system established by payment software.
If he was like Xie Yan and the others, who knew how much trouble he would cause if he completely relied on the students’ ethics.
In other words, there had to be a perfect reputation system that was intimidating to users before establishing a second-hand trading website.
This was exactly what Xie Yan and the others did not have.
Xie Yan and his team were not stupid. They understood everything with a little guidance.
“There were strong compet.i.tors in the past, but the reputation system was not perfected. The development goals are still unclear. Cla.s.smate Xie Yan, don’t you think your website is worthless?” Luo Feng’s throat was parched as he was finally understood.
Xie Yan’s face was pale. Even though he was in despair, he did not forget to pour Luo Feng a gla.s.s of water.
The others’ expressions were also very ugly.
Luo Feng’s words were like needles that pierced their hearts one after another. To be honest, they were all students of top universities and each had their own pride.
Now, their remaining confidence was shattered by Luo Feng’s words.
Xie Yan muttered to himself in despair, “Could I have been wrong from the beginning?”
He shouldn’t be so childish as to insist on his dream. Instead, he should listen to his parents’ arrangements obediently. Complete his studies step by step, enter his family’s company after graduation, and walk the path his parents had taken?