IPO In China: Made-In-China.com President Joseph Wong (Part 4)

SM: Let’s delve more into your search engine traffic strategy. You said that search engine traffic accounts for anywhere from 20% to 30% of visitors to your site. Are you including optimization of your site as well as paid search advertising in that traffic volume?

JW: Yes. We include all search engine traffic and follow it as a group. Any mechanism that we use to drive traffic to the site via search engines is something that we consider to be search engine traffic.

SM: So your entire search marketing traffic is 20% to 30% of total visits?

JW: Yes.

SM: In 2004 you reached a big milestone when you achieved $600,000 in revenue. What was the next big milestone for the company in terms of hitting good numbers and growth? What did you do to get there?

JW: Profitability in 2004 was indeed a big milestone. The next milestone was our cooperation with SGS in 2006. SGS is a leading group on inspections, certifications, and tests. They are a Swedish quality assurance group that performs audits for research development, product capacity, product quality, and if you have all of your licenses. They are a third-party auditing group in Switzerland.

They contacted us and we started to have some discussions. We drew up a special arrangement which we called Audit of Supplies. The auditors from SGS go onsite to our members and check on their facilities, documents, warehouses, and so on. They will input that status into an audit report which they deliver to us. We then post those audit reports to our website to let buyers see a real status and the exact situation of the companies they would potentially do business with. This can help the buyers have more confidence in our supply members.

SM: Basically it provided a third-party certification to instill in buyers a greater degree of confidence when they are making deals through your exchange. Is that correct?

JW: Yes. That had a big impact on our company.

SM: Can you explain what your business model is and what SGS’s business model is and how you were able to get them to relate?

JW: We get most of our income from membership fees. We do allow exporters to advertise on our website as well, and we make some money there.

SM: Do you have all suppliers listed as members?

JW: Yes. Suppliers are members. We have free memberships to introduce people to the website and then have paid memberships for increased rankings on our websites as well as special certificates via the SGS relationship.

SM: What are the membership fees?

JW: They are $4,400 per year for supplier side members.

SM: Do buyers pay as well?

JW: Buyers are free of charge. Our model is the same as the trade fairs. Vendors pay for booths and buyers visit free.

SM: How many paying members do you have today?

JW: We have over 10,000 members.

SM: Do you have a flat rate, or is it a tiered model?

JW: If they cannot fulfill the requirements from SGS they may pay only $2,930. Some members want better results on our websites so they spend more on Web advertisements as well as other trader services. We have suppliers pay us upwards of $58,000 to $73,000 per year.

This segment is part 4 in the series : IPO In China: Made-In-China.com President Joseph Wong
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