Ubay — The Intercollegiate Marketplace

Ubay —
The Intercollegiate Marketplace
John Su and Joy Zou
Professor: Alain L. Kornhauser
ORF 401 eCommerce: Final Project Report
Princeton University
Spring 2016
Abstract
Ubay is an innovative platform that facilitates intercollegiate markets amongst college
students. Using geo-location, students may pull up our website and find a virtual
marketplace catered towards their specific needs. Filtering out unnecessary items
not pertinent to the average student, Ubay will provide goods from college students
to college students. What makes Ubay distinctive is its intercollegiate feature —
such will allow students across different universities to connect and find goods that
they may desire at a reduced price. Furthermore, outside businesses can post their
student specific promotions on related goods in our website to allow for students to
have easier access to the things they need at a fraction of the cost. Monetization
for this business venture comes from transaction commission fees in addition to fees
from advertising sponsored products from local stores that might want to publish
something to the college network via our website. Current limitations include lack of
full-feature geolocation, and near term extensions include the development of an iOS
app. Ubay aims to be a self standing marketplace or seek acquisition from firms like
Amazon or eBay. Find Ubay at: http://ubayy.com.
ii
Contents
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
v
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
vi
1 Introduction
1
2 Existing Approaches
2
2.1
Amazon & eBay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
2.2
Craigslist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
2.3
Facebook’s Free & For Sale . . . . . . . . . . . . . . . . . . . . . . . .
3
3 Product Description and Design
5
3.1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
3.2
Buyer Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
3.2.1
Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
3.2.2
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
3.2.3
Tickets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
3.2.4
Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
3.3
Seller Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
3.4
Additional Features . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
3.4.1
Social Media Connectivity . . . . . . . . . . . . . . . . . . . .
14
3.4.2
Secure Payments via Stripe . . . . . . . . . . . . . . . . . . .
14
iii
4 Limitations and Near Term Extensions
4.1
4.2
16
Current Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
4.1.1
Location Based Features . . . . . . . . . . . . . . . . . . . . .
16
4.1.2
Cross Section Filtering . . . . . . . . . . . . . . . . . . . . . .
17
Short Term Extensions . . . . . . . . . . . . . . . . . . . . . . . . . .
17
4.2.1
Campus Reach . . . . . . . . . . . . . . . . . . . . . . . . . .
17
4.2.2
User Verification . . . . . . . . . . . . . . . . . . . . . . . . .
17
4.2.3
Dedicated Mobile Application for iOS and Android . . . . . .
18
5 Business Plan
19
5.1
Scope of Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
5.2
Primary Methods of Monetization . . . . . . . . . . . . . . . . . . . .
21
5.2.1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
5.2.2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
5.2.3
Local Sponsored Advertising . . . . . . . . . . . . . . . . . . .
22
5.2.4
Native Advertising . . . . . . . . . . . . . . . . . . . . . . . .
22
5.2.5
User Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Market Penetration Strategy . . . . . . . . . . . . . . . . . . . . . . .
23
5.3.1
Staffing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
5.3.2
Pro Forma Income and Expense Statements . . . . . . . . . .
24
Exit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
5.3
5.4
6 Conclusions
27
iv
List of Tables
5.1
Market target for Year 1. . . . . . . . . . . . . . . . . . . . . . . . . .
19
5.2
Market target for Year 2. . . . . . . . . . . . . . . . . . . . . . . . . .
20
5.3
Brief description of monetization methods. . . . . . . . . . . . . . . .
21
5.4
Time horizons of monetization methods. . . . . . . . . . . . . . . . .
21
5.5
Assumptions used in the calculation for commission. . . . . . . . . . .
22
5.6
Projected income and expense statement for Year 1. Commission is
based of potential number of users via Table 5.1. Local advertising
is assumed to be roughly half of the revenues from commission, and
native advertising is assumed to be 10% of local advertising. User data
monetization is at zero since we would not have enough user data to
make meaningful insights. . . . . . . . . . . . . . . . . . . . . . . . .
5.7
24
Projected income and expense statement for Year 2. Commission is
based of potential number of users via Table 5.2. Note the addition of
an iOS and Android engineering team, in addition to an increased in
commission due to expansion to more college campuses. . . . . . . . .
v
25
List of Figures
3.1
Snapshot of Ubay’s homepage. . . . . . . . . . . . . . . . . . . . . . .
6
3.2
Viewing an item for purchase. . . . . . . . . . . . . . . . . . . . . . .
7
3.3
Potential secondhand marketplace for Reunions guest tickets. . . . . .
9
3.4
Local businesses can advertise deals and meals. This example of a
restaurant is filtered from the local page for the University of Pennsylvania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
3.5
The vendor’s dashboard. . . . . . . . . . . . . . . . . . . . . . . . . .
12
3.6
From adding a new product, to its actual listing, to its checkout page.
13
3.7
The vendor’s listed products.
. . . . . . . . . . . . . . . . . . . . . .
13
3.8
The vendor’s sales and earnings (after commission). . . . . . . . . . .
14
3.9
Email confirmation to the buyer about the purchase and acknowledgement of payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
3.10 Email confirmation to the seller about the purchase and payment received reflected in Stripe account. . . . . . . . . . . . . . . . . . . . .
vi
15
Chapter 1
Introduction
For our final project in ORF 401: eCommerce, to demonstrate both our retention of
the knowledge we learned in class as well as to display our own creativity, the two
of us decided to design an experience that was both useful and lucrative. We call it
Ubay, an intercollegiate market placed for students by students. Ubay is a platform,
much like eBay or Amazon, with the exception that the only demographic allowed to
operate within its dimensions are university students. The inspiration behind this idea
was simple. College students serve as such a unique demographic often overlooked
by many. Though existing domains try to segment these consumers by offering them
specified discounts, few have designed their entire interface to match this group’s
needs. As students ourselves, we have noticed that university students share two
underlying similarities. First, the items that they typically look for are relatively the
same due to the similarity in college experiences shared across a campus. Second, the
value in which these students buy and sell things at are a lot lower due to a much
more constrained budget as a result of having insubstantial incomes. We believe that
these two factors alone are enough to distinctly separate the collegiate student from
your average consumer and that they, as well as we, would benefit from a targeted
marketplace.
1
Chapter 2
Existing Approaches
As we mentioned before, many online marketplaces already exist for the public. However, they lack the dedication that we strive to deliver for the average student.
2.1
Amazon & eBay
Amazon and eBay are two of America’s leading online marketplaces, delivering new
and used goods to individual’s doorsteps. While effective, there are two main flaws
for these two systems when it comes to the university student. First, the large demographic with which these two companies cater to provide large amounts of unnecessary
goods making it difficult for college students to find what they might need. For example, standard dorm beds require twin sheets. However, searching for sheets online
becomes a hassle as there is an absolute influx of options. Without the ability to
physically judge the item, purchasing becomes a nightmare as one runs the risk of
buying something that is ill-fitting or unsatisfactory. This then leads to the further
trouble of returning and repurchasing. Apart from the unnecessary products, these
two sites also include such a range of demographic that the average price listed for
products on these websites fall well beyond the willingness to pay for the average
college student. The optimal revenue is not accrue because these two platforms fail
2
to price optimally for the average student.
2.2
Craigslist
Craigslist is a wonderful platform to find secondhand goods. Though here the price
is cheaper than that of Amazon or eBay, it also creates unnecessary hassle for the
average student to buy and sell. While Amazon and eBay categorize their items in a
specific system, Craigslist makes it almost impossible to search based on the variety of
tags each individual places. Titles are misleading, pictures are missing, and most importantly, prices are oftentimes marked wrong. Even after a few minutes of browsing
the site, we found multiple instances where individuals trying to unload their things
claim to price an item one way in the title but end up charging a lot more. Craigslist
also provides a huge disadvantage with the number of goods people try to sell, most
of them being highly irrelevant to the average student. In addition, Craigslist, unlike
Amazon or eBay, does not guarantee delivery. This makes it especially difficult for
the student to obtain the item as many students on campus do not own cars or might
believe that the value of the good is less than their willingness to travel.
2.3
Facebook’s Free & For Sale
The closest platform that we were able to find catering to students was Princeton’s
own Free & For Sale page. Using Facebook, students can join the group and post items
that they no longer need at a reasonable price that other students will most likely
find acceptable. After finding something that they want, students can individually
message sellers to purchase the item. The popularity of the site is what largely
convinced us of the existence of this market and motivated us for our project idea.
Free & For Sale, while useful and convenient, has one major flaw. The posts are listed
based on time and there is no way to categorize any of these items. Therefore, the
3
chance of you finding something largely depends on when you look. If you are actively
searching for something, you will then need to monitor the site quite diligently, taking
up so much of your time. The result of such a process is the missed connection between
potential buyers and sellers. With this in mind, we developed a site which we believe
would retain the positives of each of the existing platforms while improving on the
deficiencies they show.
4
Chapter 3
Product Description and Design
3.1
Overview
The product that we decided to go with is a platform we like to call Ubay, the “U”
being there to represent University. Ubay is a stylish, easy to use interface that
promotes the secondhand market as a useful and fun way to obtain new items. The
main features of our site currently include Buy, Rent, Tickets, and Local. Each feature
is designed to cater to a specific need popular amongst college students. The premise
of UBay, other than being an online marketplace, is also an area where one can
feel more connected to the surrounding area. Ubay stresses geo-location as a main
component, grouping students together by location for quicker and more efficient
transactions. Each quality of Ubay as subsequently explained will highlight a specific
unmet need that we have felt existed across campus and we are always open to new
ideas and improvements. Ubay can be assessed at: http://www.ubayy.com.
5
Figure 3.1: Snapshot of Ubay’s homepage.
3.2
3.2.1
Buyer Experience
Buy
The Buy feature is probably the most standard in the collegiate marketplace. Once
individuals click on the link, they enter a page that initially presents them with the
6
most popular as well as featured items available based on recent trends. Popular items
use an algorithm which takes into account factors such as the number of page views
as well as the number of time specific items have been put on wish lists. Students who
browse the page can filter through six general categories: Books, Dorm Furnishings,
Men’s Clothing, Women’s Clothing, Tech, and Miscellaneous. We believe based on
researching Princeton’s Free & For Sale page that these are the most common categories of items students tend to want and sell. Once a student finds an item that he
or she likes, that person can click on the item and pull up a description on the price
as well as the seller information. The consumer can even click on the vendor’s profile
to view more about the person and see what other products that person is selling.
This is especially useful for a consumer who finds a vendor with similar taste. The
vendor’s page can also show the current reviews on the products that the vendor sells
as to ensure that the vendor’s products are quality. Below is a sample page for one
specific product.
Figure 3.2: Viewing an item for purchase.
Once a consumer verifies that he or she is satisfied with the product, they can then
purchase it buy simply clicking purchase. The transaction goes our personal domain,
in which we hold the money until we are sure that the consumer has obtained the
7
item. This way, we can ensure that the transactions are safe. In addition, we would
charge a small commission for this service and make money off of the transactions as
well. If a consumer does not wish to buy it now, he or she can put it on the wish list
and review it later. That consumer can also browse other similar items based on the
tags listed in the product.
3.2.2
Rent
Rent is a feature we decided would be highly useful, particularly because of our
geolocation feature which would limit the distance needed for transactions. Both of
us agreed that there are many items that we would gladly pay money to rent, but do
not wish to buy either due to frequency of use or lack of space. These items range
from everyday appliances such as irons or vacuums to more rarely used things such as
formals dresses. We believe that this category would be especially popular especially
due to many individual’s unwillingness to pay money to buy something that they
would rarely use again. This is especially true during formals as many individuals
feel pressured to buy something new to wear. Having a renting feature would be like
compiling a giant boutique and closet for a fraction of the cost. Another category
in which the Rent feature would be popular would be in audio or video equipment.
Cameras and speakers are known to be in high demand by students who wish to use
them for personal and professional reasons. These things, however, are typically well
above the price range of an average student. Therefore, renting the equipment would
allow for students to still have that experience at a fraction of the cost. There also
is an insurance policy for the renter where the rentee agrees to pay a predetermined
amount of compensation (up to the original price of the item) should the item get
damaged. The process of renting would be the same as the process of buying, though
the price would be based per time period and the person renting the item would
specify how long he or she needs it for.
8
3.2.3
Tickets
Tickets exists because we noticed that most individuals looking for tickets to a specific
event have no unified way of searching. Generally, an individual trying to find a ticket
for a particular showing for a particular event (namely dance group shows) end up
scouring a number of Facebook pages and sending out multiple e-mails to various
listservs. We believe that this is highly inconvenient, so we wanted to create a forum
that would allow individuals to buy or trade tickets. Consumers looking for tickets
to a particular event can simply look on our page and see if anyone has any interest
rather than going through multiple channels of social media. This in turn would also
reduce the number of spam messages that students unrelated to the event would see
in their inboxes.
Figure 3.3: Potential secondhand marketplace for Reunions guest tickets.
9
3.2.4
Local
The Local section of Ubay is meant for small businesses populating the area surrounding a university. In developing this section, we visited multiple places along
Nassau Street pitching our idea and gauging interest. We discovered that contrary
to what we thought, many businesses did not think that they were reaching the full
potential of their target demographic and would love a platform where they could
speak directly to this segment of consumers in a way that doesn’t affect their other
customers. For example, a business looking to give a massive promotion to students
would be more comfortable marketing it directly to the students rather than placing an advertisement outside for everyone to see and risk the potential of gathering
negative feedback from other consumer segments that feel slighted. Since the users
of Ubay are exclusively university students, it would eliminate that problem so that
businesses can better cater to the student. Local is not only limited to stores selling
items, it also includes other things such as restaurant and bar deals. This would be
especially enticing for university students who are not on a meal plan or students who
are looking to find a cheap place to grab a beer. In making this section, we envision it
to be a great way to foster communication between a college and the local community
whether the campus is suburban or urban. Local really increases the demand for college students who are working with a significantly different budget than the average
consumer. Because of this, businesses would want to have sponsored advertisements
on their website.
10
Figure 3.4: Local businesses can advertise deals and meals. This example of a restaurant is filtered from the local page for the University of Pennsylvania.
11
3.3
Seller Experience
Ubay was designed for students by students, so we strove to create an enjoyable
experience for sellers, or vendors as well. The key to our vendor experience is the
easy to use dashboard, which helps students selling items to keep track of everything
from the items purchased to reviews to even the number of views that any particular
thing has gotten. This greatly helps the vendor as well in deciding what and how
to sell the things they have. A typical problem for individuals trying to sell things
on Free & For Sale is that they are unaware of how to correctly present their item.
Oftentimes things that could appeal to more consumers do not due to the poor quality
of pictures taken or bad pricing. Our vendor dashboard allows a vendor to keep track
of past sales, which then allows that vendor to better understand what prices better
and how to better market their own products. This in turn would increase their
revenue as well as ours. Additionally, the ease of use would promote vendors to sell
more items, encouraging the second-hand market and promoting sustainability.
Figure 3.5: The vendor’s dashboard.
12
Figure 3.6: From adding a new product, to its actual listing, to its checkout page.
Figure 3.7: The vendor’s listed products.
13
Figure 3.8: The vendor’s sales and earnings (after commission).
3.4
3.4.1
Additional Features
Social Media Connectivity
In addition to the listed features above, a social media feature allows for consumers
and vendors alike to better connect their products with other channels. This will help
the site gain popularity through the easy transition between popular social sites and
Ubay itself.
3.4.2
Secure Payments via Stripe
Ubay’s payment system is fully functional, via integrating Stripe’s payment gateway
API associated with our Stripe “bank” account. Stripe is a technology firm that
facilitates payment over the internet for businesses and private individuals by taking
care of the banking infrastructure and fraud prevention.
14
Figure 3.9: Email confirmation to the buyer about the purchase and acknowledgement
of payment.
Figure 3.10: Email confirmation to the seller about the purchase and payment received
reflected in Stripe account.
15
Chapter 4
Limitations and Near Term
Extensions
4.1
4.1.1
Current Limitations
Location Based Features
When a seller is in the process of creating a listing, a required field is to select which
college the product is relevant to. In the near term, we hope to build in an automatic
geolocation feature that detects which school a seller is posting an item from to
make the item listing process more seamless (from the seller’s perspective) and more
legitimate (from the buyer’s perspective, since they can be assured a seller from the
specified college posted the product).
Other geolocation features that we are limited in currently include searching and
filtering products by distance from a given location. Moreover, we hope to add in
a feature that syncs together college students’ class schedules anonymously so that
when a buyer and seller are matched on the same campus, Ubay will automatically
suggest a meeting place and time to exchange the product.
16
4.1.2
Cross Section Filtering
Currently, potential buyers on Ubay can browse for items based on University or
Category. Within a given University’s landing page, the most popular products are
listed at the top, followed by a complete catalogue of all the products below. Within
a given Category landing page, such as Buy: Tech or Local, the most popular listings
again are shown first, followed by the remaining listings below. One limitation is that
once a user is within a University’s landing page, it is not possible to filter down products based on Clothing, Tickets, Local, Books, for instance, and vice versa. Allowing
users to be on the landing page for Tickets and then further filter by University would
provide a more seamless way for users to navigate the Ubay marketplace.
4.2
4.2.1
Short Term Extensions
Campus Reach
Ubay’s current implementation allows sellers to tag their listings by school, and currently we have designed the school tags for five different colleges (Princeton, Harvard,
Yale, Penn, Cornell). We hope to design and implement landing pages for more colleges around the United States. The plan is to create landing pages for the remaining
institutions of the Ivy League, and then branch out to schools such as MIT, Stanford,
and New York University.
4.2.2
User Verification
Ubay’s current implementation requires administrators of the Ubay site (Joy and
John) to login to approve student sellers who register, based on email addresses. We
would like to build a more automated and higher security approval system to ensure
that this platform remains within its targeted demographic — college students.
17
4.2.3
Dedicated Mobile Application for iOS and Android
Ubay’s website automatically adjusts for variation in screen sizes across mobile devices
such as the iPhone and iPad through their respective web browsers. We aim to develop
a dedicated iPhone app, for instance, that will allow both student buyers and sellers
to access Ubay more conveniently, wherever they are. A dedicated mobile app would
also allow sellers to directly take a photo from their phones and directly upload into
new listings. Geolocation features would also be facilitated more easily through a
mobile app.
18
Chapter 5
Business Plan
5.1
Scope of Market
Ubay’s market scope comprises college students.
University
Number of Students
Target Rate
Potential Ubay Users
Princeton
8,125
5%
406
Harvard
21,000
5%
1050
Yale
12,336
5%
617
Cornell
21,850
5%
1093
Penn
24,806
5%
1240
Columbia
30,304
5%
1515
Dartmouth
6,298
5%
315
Brown
8,848
5%
442
MIT
11,319
5%
566
Stanford
16,136
5%
807
TOTAL
8051
Table 5.1: Market target for Year 1.
19
University
Number of Students
Target Rate
Potential Ubay Users
Princeton
8,125
7%
569
Harvard
21,000
7%
1470
Yale
12,336
7%
864
Cornell
21,850
7%
1530
Penn
24,806
7%
1736
Columbia
30,304
7%
2121
Dartmouth
6,298
7%
441
Brown
8,848
7%
619
MIT
11,319
7%
792
Stanford
16,136
7%
1130
NYU
57,245
7%
4007
UChicago
14,467
7%
1013
Duke
14,950
7%
1047
Berkely
37,581
7%
2631
UCLA
43,239
7%
3027
Rutgers
66,013
7%
4621
TOTAL
27616
Table 5.2: Market target for Year 2.
Currently, Ubay is ready for launch at several universities on the east coast, with
the goal of gradually expanding nationwide. Both undergraduate and graduate students are part of Ubay’s target market. We assume that we can reach 5% of the
student body in our first year after our official launch and that by the second year,
the target audience will grow 40% to 7%.
20
5.2
Primary Methods of Monetization
5.2.1
Overview
Ubay will utilize four different ways in order to generate revenue as an intercollegiate marketplace: commission of seller earnings, local sponsored advertising, native
advertising, and insights on college user shopping patterns.
Monetization Type
Description
Commission
Percentage of seller earnings
Local Sponsored Advertising
Pay-as-you-go model: local businesses
Native Advertising
Similar to Google AdWords, pay-per-click
User Data
Subscription model, user patterns: retailers
Table 5.3: Brief description of monetization methods.
Revenues from commission and local sponsored advertising can be obtained relatively quickly. Native advertising will require more time to establish since we would
need to integrate new code into our ecosystem in addition to creating relationships
with retailers such as J. Crew or Ralph Lauren, which would be able to seamlessly
advertise their clothing line in our clothing landing page. User data will take the
longest to generate revenue, as we need to attract enough user traffic before we can
make meaningful and monetizable insights off student buying and selling patterns.
Monetization Type
Time Horizon
Commission
Immediately
Local Sponsored Advertising
Immediately
Native Advertising
Short to medium term
User Data
Medium to long term
Table 5.4: Time horizons of monetization methods.
21
5.2.2
Commission
Ubay’s current commission rate is 20% of seller revenues. This is a metric we will
continue to adjust based on supply and demand within our student seller ecosystem.
Assumptions
Metric
Base Target Rate (Ubay users out of total students)
5%
Target Rate Growth (year 1 to year 2)
40%
Target Rate Growth (short term)
20%
Target Rate Growth (medium term)
10%
Target Rate Growth (long term)
2%
Average Number of Ubay Puchases (per user per year)
3
Average Amount per Ubay Purchase
$20
Commission Rate
20%
Table 5.5: Assumptions used in the calculation for commission.
5.2.3
Local Sponsored Advertising
Revenue from advertisements by local businesses, such as coffee shops, bars, restaurants, and family businesses will comprise sponsored local advertising. This form of
revenue can be obtained immediately through aggressive marketing of Ubay’s value
proposition as a marketplace that will attract college students of all kinds.
5.2.4
Native Advertising
Global businesses and retailers that wish to integrate their products into the various
shopping pages on Ubay’s website have the option of native advertising with our
platform. This type of advertising will take longer to develop, as it will require us to
utilize the services of firms such as TripleLift or AppNexus, in addition to securing
branding agreements with global and national retailers.
22
5.2.5
User Data
Ubay will provide a huge database of shopping patterns and trends for a demographic
(i.e. college students) that are of interest to retailers and other businesses. Moreover,
the world is evolving into a highly data-driven ecosystem. With the data gathered
through this site, it would be possible to develop a working dynamic pricing problem
and algorithm for the used goods market and then sell this algorithm to various
sources with different interests whether in sustainability or individuals looking to
capitalize on this.
5.3
Market Penetration Strategy
Our market penetration strategy will involve heavy marketing efforts in the short
term in order to get Ubay’s name out on college campuses around the United States.
These marketing efforts will be carried out through social media, in-person marketing
to local businesses, and word of mouth marketing through campus ambassadors.
5.3.1
Staffing Plan
Ubay is currently a stand alone website, but we plan to develop dedicated mobile
applications for the marketplace. Our staffing plan will include software engineering
to manage both the website and mobile applications, in addition to a marketing team
to help grow our idea across campuses nationwide. The first year after launch is
projected to have large costs due to our need to aggressively market our product and
develop the necessary infrastructure to handle a large student user base. The second
year after our launch, we are aiming to have established ourselves at a much wider
range of college campuses, helping boost not only our revenues from commission, but
also from local and native advertising.
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5.3.2
Pro Forma Income and Expense Statements
Revenue
Commission
$96,613
Sponsored Local Advertising
$50,000
Native Advertising
$5,000
User Data
$0
Total Revenue
$151,613
Front-end web engineering
$100,000
iOS and Android engineering
$0
Server Hosting
$100
Domain Name
$15
Sales and marketing
$100,000
Office space lease
$24,000
Legal
$20,000
Total costs
$244,115
Net Income
-$92,502
Costs
Income
Table 5.6: Projected income and expense statement for Year 1. Commission is based
of potential number of users via Table 5.1. Local advertising is assumed to be roughly
half of the revenues from commission, and native advertising is assumed to be 10% of
local advertising. User data monetization is at zero since we would not have enough
user data to make meaningful insights.
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Revenue
Commission
$331,394
Sponsored Local Advertising
$100,000
Native Advertising
$20,000
User Data
$0
Total Revenue
$451,394
Front-end web engineering
$100,000
iOS and Android engineering
$100,000
Server Hosting
$100
Domain Name
$15
Sales and marketing
$100,000
Office space lease
$36,000
Legal
$30,000
Total costs
$366,115
Net Income
$85,279
Costs
Income
Table 5.7: Projected income and expense statement for Year 2. Commission is based
of potential number of users via Table 5.2. Note the addition of an iOS and Android
engineering team, in addition to an increased in commission due to expansion to more
college campuses.
5.4
Exit Plans
We envision Ubay eventually developing into a self-standing ecosystem of marketplaces catered for the college student. That said, we do see how Ubay may be attractive complement for current eCommerce platforms. Hence, Ubay could be well
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positioned as an acquisition target for companies such as eBay or Amazon, who might
wish to expand their reach into college campuses.
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Chapter 6
Conclusions
Indeed, we believe that there is a large potential demand for a platform like Ubay
due to the existing portals of second-hand sale of merchandise (Free & For Sale). Our
application delivers an easier way to access this market as well as further extending
it to connect with the local events and promotions for and by college students. We
aim to monetize through commission, local sponsored advertising, native advertising,
and creating a database of insightful college student shopping patterns.
In context of college campuses, marketing and selling physical products has never
been easier with Ubay. By connecting students within and across campuses, Ubay
widens the scope of and revolutionizes the typical secondary college marketplace.
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