Online revenue model: Pay to post
February 8th, 2008Another way data ranchers get paid is through a model I like to call “pay-to-post.” Using this model, users pay to have their information listed on a website, usually in hopes of selling something or gaining new business. This is a pretty simple concept so I won’t belabor the point; instead I’ll walk through some examples of different pay-to-post systems.
Perhaps the originator of the pay-to-post model is the granddaddy of e-commerce, eBay. Sellers pay an upfront fee (usually just a couple dollars) to list their items on the auction site, then pay a percentage of the final sales price, assuming the item sells. eBay quickly added pay-to-enhance options to give sellers more exposure (more photos, bold item listings, etc.). Obviously the model works well for eBay and nets much more than an entirely ad supported auction website might.
Employment websites like Hotjobs and Monster.com also utilize a pay-to-post model. Here the hiring company pays a fee to list a job opening on the website for a specified amount of time (usually 30 days or until the position is filled). An important part of this model is the recognition of customers’ willingness to pay. These sites could have chosen to make listing jobs free while job seekers (applicants) paid to apply online. Obviously in this case employers have a greater ability to pay for such services but it is important to consider which side should pay in any pay-to-post business model.
Outside of e-commerce juggernauts like eBay and Hotjobs, even niche sites have found customers willing to pay to post content online. Consider Safarium.com, an online vacation rental by owner listing service. Vacation homeowners pay to list their properties online in hopes of finding renters. Safarium also employs a pay-to-enhance model, offering property owners additional photos, premium placement, etc.
Directory websites like real-estate-agents.com offer to list business contact details for a fee. These sites are not unlike online versions of the yellow pages and most offer some form of pay-to-enhance options. The effectiveness of a directory website listing is based entirely on the quality and quantity of customers who view the website, and in the case of many sites, the return for business owners is not always positive.
Pay-to-post is certainly an effective model for generating online revenue and should be considered by any internet entrepreneur starting an online business. Up next: pay-to-view.
