A week or two ago I registered with Cariama. It is a very new alternative online marketplace where merchants in Second Life can list their virtual items for sale. The site is not officially open yet but merchants can already register or sign-up for an account if they want to. Cariama is expected to open its doors on December 19, 2009 and for those who already pre-registered, all functionalities will be available to them.
Today, I received my first newsletter from Cariama. It featured their Business Model and answered a couple of questions about their ability to grow and survive as an alternative Second Life online marketplace. Kay of Cariama kinda gave me a brief outline of their business model when I asked them about it via e-mail but the one in the newsletter has more information in it.
For those interested, I have copied and pasted the content of their newsletter below:
In a competitor forum, a question arose on the ability of Cariama to sustain its growth, or even exists on the long term with a strategy based on 0% commission on sales.
Quote:
”All I can imagine is getting an e-mail after a few weeks: “Due to blah blah, we have decided to now charge for this part of the service…”Quote:
”When they decide they want to make money to pay for the maintainability of the service and start charging they are taking away their own main marketing position”The business model of Cariama is rather a popular one in the internet industries: the main service is free, and the revenues come from advertisements and/or optional services.
Therefore, the revenues will be generated from:
- the advertisement of classifieds and products, visible on the website and inworlds on CTerminals and CViewers, and only SL or Opensim related advertisements will be allowed,
- the different optional services that will implemented in the future: a first optional service for L$25 per month (with the three first month for free) is proposed, the extended statistics on the website and inworlds sales, and CViewers,
- a fee for participating to an advertisement auction (L$15 is requested in order to avoid irrelevant bids),
- and fee for currency exchange: in a far future, when different worlds with inworld currency will be listed in Cariama, a small fee will be taken for people wanting to buy a product with a different currency from the product currency.
What are the costs of Cariama? The main costs are the servers, and currently Cariama has two of them, one that hosts the current website, and a second for backups. However, with time the number of servers will increase with the number of items/product listed by the customers, and it is mainly the images that take the largest place on a server. In order to limit that place, and to propose a service with no commissions on the sales, the size of the images that can be uploaded in Cariama is limited to 65ko per image. One can argue that this value is small. It is not, this item is currently showing a picture of 19.6ko.
Quote:
”All I can imagine is getting an e-mail after a few weeks: “Due to blah blah, we have decided to now charge for this part of the service…”No such email in Cariama’s crystal ball.
Quote:
”When they decide they want to make money to pay for the maintainability of the service and start charging they are taking away their own main marketing position”Correct, so why would Cariama change its strategy? Even if it will take 4-5 years for Cariama to be profitable, it is worth to be patient.
I’m definitely going to try out Cariama when they launch this coming December 19, 2009. Why not? Registration is FREE, listing is FREE and they won’t take any commissions from my sales. If in the future they decide to change their policies and charge for listing, etc. then I can simply just stop listing and pull my items out. For now, I am going to take advantage of their FREE offers.
Want to learn more about Cariama? Visit their website at http://cariama.com.
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Tags: alternative marketplace, business model, cariama, forum, markeplace, merchants, opensim, second life marketplace, virtual worlds marketplace
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