Would A Service Like This Be Worth It? Feedback Request

[Mouadmo]

Realistically, could this concept work in the long run?
A Subscription Service for Gift Cards Codes (digital - instant delivery).
Think of it as a membership site, you pay a fee to gain access to a library of gift cards you can redeem and use. The subscription fees should reasonably be cheaper than the value of the gift cards provided.
Do you "personally" see this service to be useful? Do you think it's just a worthless gimmick, no? why? Most importantly, how would you make such thing profitable?
Would love to discuss and exchange feedback about this for the greater good!

 

[ripmyfriend]

If the subscription fees is lower than the value of the gift cards a user gets, then I think there's market for it. As long as the gift code brands benefits the users.

But how would you make money?

 

[Mouadmo]

If the subscription fees is lower than the value of the gift cards a user gets, then I think there's market for it. As long as the gift code brands benefits the users.

But how would you make money?

That's the million-dollar question, lol, my primary basic math shows that the starting funds necessary would be A LOT, and with the subscription fees being reasonably lower, I'd still likely lose quite some, but I'm thinking if there are enough subscribers it will eventually be profitable. Would love some actual ideas/suggestions about this if someone dealt with a similar problem.

 

[NirvanaWolf]

How do you plan on making it profitable?
The gift cards would be like coupons? Or actual gift cards? Because I can't see how selling a gift card for a cheaper price can be profitable unless they're cracked or carded.

 

[RocketFuel]

Possibly... but what's the business model

 

[Mouadmo]

How do you plan on making it profitable?
The gift cards would be like coupons? Or actual gift cards? Because I can't see how selling a gift card for a cheaper price can be profitable unless they're cracked or carded.

Actual gift cards. I don't think I'd do this project blackhat (stealing/cracking the cards) so yeah, the problem would be how to make it a proftiable business.

Possibly... but what's the business model

I edited the thread as I honestly don't have ideas abt how to make it profitable, except for the subscriptions (targeting a certain number of subs and then maybe convince the sellers to lower their bulk prices?)

 

[Stuffedegg]

How would the process work? Would you charge a monthly subscription of say $30 then charge them less for the gift cards? If so, you are hoping that the subscriber pays more for subs than the difference between the gift card in/out?

You will have to be able to negotiate a very low price for the gift cards to make it work well. especially if I am getting them at a discount. Or hope that no one buys the GCs after paying for a sub.

 

[Mouadmo]

How would the process work? Would you charge a monthly subscription of say $30 then charge them less for the gift cards? If so, you are hoping that the subscriber pays more for subs than the difference between the gift card in/out?

You will have to be able to negotiate a very low price for the gift cards to make it work well. especially if I am getting them at a discount. Or hope that no one buys the GCs after paying for a sub.

That's the obvious thing, and the hardest too, to negotiate a very low price. I've done some quick search for the bulk prices, found some decent ones but It still won't be profitable, at least not by a high margin.
Do you think a monthly sub fits better? I was thinking of three months with a higher price ($45-$50).

 

[ProfChaos]

You can hope that the customers forget about their subscription and earn this way. You can say that they can redeem one card in a month and that for the last 3 months. Hope you get what I mean. But it's quite risky

 

[Stuffedegg]

That's the obvious thing, and the hardest too, to negotiate a very low price. I've done some quick search for the bulk prices, found some decent ones but It still won't be profitable, at least not by a high margin.
Do you think a monthly sub fits better? I was thinking of three months with a higher price ($45-$50).

I dont think you will get a high margin unless you get a huge number of subs. As @ProfChaos said, you could hope they forget i have seen that on other stores.

The problem you will get is that you want people to remember your site, but forget about it at the same time.

If you can buy them for $8 and sell for $9, you may get profit, but people will take advantage of it and make sure they get over their subscription cost in savings. At least i would.

 

[Mouadmo]

You can hope that the customers forget about their subscription and earn this way. You can say that they can redeem one card in a month and that for the last 3 months. Hope you get what I mean. But it's quite risky

You mean limiting the user on how many cards he can redeem? If so, yes, that does sound like a good idea to keep them subscribed, can be risky too (might push the users to unsubscribe quickly) but I think if done right, could work.

The problem you will get is that you want people to remember your site, but forget about it at the same time.

If you can buy them for $8 and sell for $9, you may get profit, but people will take advantage of it and make sure they get over their subscription cost in savings. At least i would.

Could you please elaborate on the last part, what do you mean "take advantage" - "get over their subscription cost in savings" - and how would you do it? thanks.

 

[Stuffedegg]

If I had to pay 30 for subscription, and saved 1 per card, I would need to buy 30 cards a month to break even.

Only after that point am I making any savings at all.

So for every card I buy after getting my 30 sub charge back, I will save 1 usd or whatever. So I would need to think, am I going to buy 30+ cards a month to make any savings?
Probably not

 

[GringoMonkey]

I run subscription businesses and you also have to factor in customer acquisition costs.

Unless you have a mechanism for basically getting the giftcards for free, the the only ways i know are illegal, then i doubt you would be able to build a profitable business with discount giftcards.

 

[Mouadmo]

If I had to pay 30 for subscription, and saved 1 per card, I would need to buy 30 cards a month to break even.

Only after that point am I making any savings at all.

So for every card I buy after getting my 30 sub charge back, I will save 1 usd or whatever. So I would need to think, am I going to buy 30+ cards a month to make any savings?
Probably not

Oh now that makes sense, thank you for the clarification I will think more about that!

I run subscription businesses and you also have to factor in customer acquisition costs.

Unless you have a mechanism for basically getting the giftcards for free, the the only ways i know are illegal, then i doubt you would be able to build a profitable business with discount giftcards.

True, I personally don't know any illegal ways nor do I really wanna go that way. Could you please share something about your business? Was it difficult to launch it (costs wise) etc. ?

 

[GringoMonkey]

A business model is easy. You sell a product, that after all your costs you make a profit. But figuring out how you do that is unique for every business

As i said, i think your gift card idea would fail that test.

The only thing i can tell you that i do everytime is sell a product that is unique / adds value.

Usually the more money you have to invest in implementing that model, the easier it is to be successful.

 

[Mouadmo]

A business model is easy. You sell a product, that after all your costs you make a profit. But figuring out how you do that is unique for every business

As i said, i think your gift card idea would fail that test.

The only thing i can tell you that i do everytime is create a product that is unique / adds value.

Much appreciated, of course that was the goal of this thread.. to see if this service can add value without sacrificing too much on my end (or anyone who thinks about doing the same).

 

[colenikol]

Maybe showing few ads may help it make some more money enough to fill the gap?

 

[Mouadmo]

Maybe showing few ads may help it make some more money enough to fill the gap?

Maybe, but honestly, who would be okay with ads after paying for a premium subscription? But I guess there are other ways this method can generate some profits and it doesn't have to be all about gift cards (thanks to the previous comments for inspiration).

 

[Stuffedegg]

I have just thought, you could possibly automate the process. If you can buy 30usd of GC for 20, you may be able to get people to subscribe at 25 a month to recieve 30 every month. But you would need to get a lot of customers, and think about automatic renewals with expiry days of the gift cards, that you may be able to redeem after the customers cards have expired.

That might get you some more money.

 

[Mouadmo]

I have just thought, you could possibly automate the process. If you can buy 30usd of GC for 20, you may be able to get people to subscribe at 25 a month to recieve 30 every month. But you would need to get a lot of customers, and think about automatic renewals with expiry days of the gift cards, that you may be able to redeem after the customers cards have expired.

That might get you some more money.

I am taking notes! It'll be a challenge to get the prices low, but I keep looking for it that's for sure. Thank you for the thought.