The business plan for penny auction website is similar to the business plan required for any e-commerce business that makes money from unique visitors, transaction fees, and/or external advertisements. Penny auctions exist in several forms online and many of them are highly successful, luring in new users with the promise of great products like high-end electronics available at a fraction of their suggested retail value. Will your penny auction site allow anyone to bid, or do members need to register? Do you sell bid packages, or do people simply log in and raise the current bid? There are different models used, so make your approach clear. Also:
• Who is your target customer, and what are the profile traits or commonalities that unite them?
• How will you market your auction site?
• What other services will you offer, and what is the range of products you envision having on the site?
• How much money do you need for launch?
• How many employees will the auction site need to run?
The business plan for an auction site also needs to address competitive comparables and industry stats that support the argument that your business can be profitable within 1-2 years. If you need private investment, which is typical, showing a 5-year model is imperative, and it should include an IRR assessment or up-front offer of ownership share based on the projected profit in Year 5. MasterPlans has worked on a wide range of business plans for auction sites, penny and otherwise, and has the expertise to develop a compelling narrative and model for your venture. Call a consultant now for a free consultation about your project: (877) 453-2011.
