Clickbank and Shopatron two great business models
Both Clickbank and Shopatron have come onto my radar screen these past couple of months. There ara a few new business opportunities that I've been evaluating and these companies have been reaffirming my thoughts. (more on that in the coming weeks/months)
If you aren't familiar with these companies here's a few good places to get the highlights: Shopatron & Clickbank.
What I find so appealing about this companies is the network effects they have built into their business models, the business processes they act as outsourcing agent for, and the win-win-win they have found.
Let's take Shopatron for example. They help manufactures eliminate channel conflict and encourage retailers to stock more of the manufacture's products, all which creating a Consumer to Manufacturer relationship. It's really brilliant. It actually gets even better- Retailers get new customers without even trying (they qualify for orders if they stock the manufacture's inventory), move inventory, in some cases enable in-store pickup and returns which provides an opportunity for cross-selling, and provides the retailer with aggregated visibility into how a manufacture's products are moving through out the country. Consumers get to create a relationship with the manufacturer (I am told the post sale satisfaction surveys have a completion rate near 25%!!) and have the opportunity to purchsase online and pick-up at a local retailer (ok, this depends on the item and how wildly it's distributed). So, how does Shopatron make money? Well, they charge the manufacture a small (single digit thousands) setup fee and take a small commission (2-5%) of the Retailers margin for forwarding the order.
Clickbank is similar but they focus on digital downloads and instead of 'retailers' they have an extensive affiliate network. Clickbank is said to have north of 100M$ in revenue. IMHO there is a lot of slime in certain corners of the digital publishers market and while Clickbank is profiting from it they still enjoy a solid reputation as a trusted sales agent and affiliate payer.
These businesses are two examples of business process outsourcing with added leverage and virality. If I were still in the enterprise software business I'd be looking to acquire companies like these.
