IPO In China: Made-In-China.com President Joseph Wong (Part 5)

SM: Your business model is basically paid subscription and advertising fees from suppliers. Buyers get to use the site free. Do you have any other revenue generating aspects of your business?

JW: We actually try to provide additional trader oriented services for the buyers and suppliers. We work hard to provide a lot of free services for the buyers so that they will have more confidence and a better experience when they make purchases from our suppliers. In turn that means that suppliers will sell more and will want to use our site more.

It is a cycle where we feel that we can focus on spending resources to make the buyer experience positive because it enhances the volume our sellers are able to do. Anything that helps the sellers is ultimately going to help us as well. That being said, we also provide some premium services for the both buyers and suppliers, which allows our company to earn some extra revenue.

SM: What are the premium services? Can you give me some examples of that?

JW: One example of a premium service for suppliers is our trade magazine. We attended a lot of trade fairs all over the world every year. When we attend these fairs we take product demonstrations as well as copies of our magazine, which we give out to all the offline buyers. Our suppliers can also be listed in the magazines if they can pay the advertising fee, and that gets them exposure to a whole new class of potential buyers.

An example of a premium service for buyers is enhanced search. If a buyer does not know how to search for a particular product or supplier in China we can offer them the services of our Buyers Specialist Team. They will help the buyer by searching for the best suppliers that buyers would otherwise not know how to reach. Sometimes buyers want to have a very deep and thorough audit of the suppliers to know their background. We have the team that can get such reports. Buyers would pay a report fee for this service.

SM: So you can provide some hand holding to help buyers make purchases from China?

JW: Yes. We have resources to help the buyers find the best products or suppliers or gain that in-depth assessment of a potential supplier’s quality.

SM: What do you charge for these buyer services?

JW: It depends on the hours spent on the manual service. We will calculate how many hours we will need to spend and we provide them a quote. It is a type of consulting service.

SM: What is the revenue level across all the product lines today?

JW: The membership fee occupies 70% of income. Advertising accounts for 20% of our income. The trade service and consulting occupies around 10%. Total revenue in 2009 was $13.3 million.

This segment is part 5 in the series : IPO In China: Made-In-China.com President Joseph Wong
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