January 27, 2010
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Company Culture
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As time goes on, one of the more interesting trends that continues to happen with surprising regularity is how frequently new business models and ways of doing business are emerging through social media and online tools. In many cases, these trends are helping to reinvent how businesses sell and consumers buy all kinds of products. For that reason alone, new sites are worth paying attention to no matter what industry your business happens to be in. The benefit of that for your small business is that watching these new models may also spark a new idea or method of selling that you can consider for your own business:
- Woot - This online retailer takes the unique approach of only selling a single product each day. Around each daily product is a dedicated conversation stream, live commentary and a detailed description. By focusing on a single product, not only do they add a layer of conversation and description to the product, but they also give their users the perception that each daily deal is special and only available for a limited time. This focus allows them to add urgency to their site and convert browsers to buyers quickly. While you may not be able to convert your entire business to just selling one product at a time, this model may be the next evolution of the long-standing "deal of the day" model that many businesses have used at one time or another in the past.
- Groupon - How much would you lower your standard prices if I could guarantee you 100 customers? Or how about 1,000? The premise behind Groupon is to offer customers "collective buying power" - which essentially means that you can offer a great deal and it will only kick in if a set number of consumers take you up on it. Go on the site and you will see deals sorted by region and many of them have been redeemed by thousands of people. What Groupon shows you is that sometimes you CAN actually count on volume to compensate for lowering your prices. The nicest thing about the site is that instead of trying to recreate this model on your own site, you can add a special offer for your business to Groupon.
- Hotwire - By now most people are familiar with the new auction based pricing model that Priceline introduced into the travel industry. Letting consumers set the price for what they are willing to pay was a revolution in the travel industry at the time when Priceline was introduced. Hotwire used the slightly adapted model of offering exact prices, but not letting you know the details of what you booked until after you pay. If you have your own eretail site, this model can be a good way to get rid of excess inventory in a different and more fun way.
- Blippy - If you don't live your life in social media, the idea behind Blippy will likely confuse you. It is a social site that lets people automatically share the latest things they have purchased (and how much they paid for them) by linking the site to a single credit card. This level of transparency and sharing may seem crazy to many people, but the site represents a social experiment that points to an interesting opportunity for businesses whose customers may be used to sharing every small detail of their lives. It may be an outlier in this list of business models as they admittedly don’t have a revenue model for the site as yet – but the shift in what people are willing to share online is the real trend worth watching.
- Dubli- This site offers some of the most creative pricing models you can find online - and models that have not yet been duplicated across many others sites. The first is what they call a "reverse auction" where products have a starting price and you use credits that you purchase on the site to reveal the current price. Each time a member of the site uses a credit to reveal the price, the price goes lower until someone decides to make the purchase. The second model is based on a "unique price auction" which means you need to have the lowest bid that no one else chooses to have in order to win.
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Vumero 2 months ago
Might be worth checking out Vumero (www.vumero.com). New innovative business model changing the global Professional Services industry. Businesses hire world-class professional freelancers (like Odesk) and can buy their portfolio of work from a large document repository (e.g. Excel spreadsheets, financial models, analysis, business plans). Very clever and valuable marketplace.