Used License Marketplace

Without doubt the most efficient way of starting a new venture on the web is using a ready-made script. There is a huge variety available these days covering almost every niche you can think of and chances are that there is a script that can closely match what you need. This helps to reduce to startup costs and almost guarantees you won’t have any teething problems like you might with a bespoke script.

Paid scripts work by issuing licenses with a purchase. These licenses can last anywhere between 3 months to a lifetime (or so they claim). The question what happens to these licenses when the website outgrows the script or simply ceases operation?

Well, with many scripts, especially vBulletin, some used licenses end up for sale on forums and auction sites. It is quite common to see sales threads offering licenses and where the terms allow it, it is perfectly legal, not to mention a great way to get some money back from your initial investment.

How to improve the process?

While selling your license can be a good idea, finding a buyer can be a challenge. Forum listings are a comparatively effective way to sell, but what about a website selling these used licenses exclusively?

I think the best way to look at how it would operate is by looking at a used car dealership. You buy the license at a markdown price, convincing the license owners to sell at a fair price by offering fast cash upfront. Once the inventory is in stock you can make it available to the public at a higher price through the website. By listing details about it’s expiry, support and software update availability you can help potential buyers to make their decision.

If we want to look at some potential figures, let’s take vBulletin as an example. A new owned license retails for $160 and includes 1 year of updates. Asking prices for used license on forums can range from $90 to $120 based on a few factors, primarily the remaining window for software updates. By offering all sellers a flat rate of $100 for their license, you are likely to tempt them due to the ready availability of the money and the added security of dealing with a ‘power seller’. A mark up of $20-30 would be feasible so listing prices for used licenses would range between that, with some give or take for the availability of updates.

So we now know we can make around $25 per sale. 4 sales per day wouldn’t be unreasonable and so $100 a day quickly tallies up to over $35,000 a year just from selling vBulletin licenses. Offer the same service for other popular scripts such as CMS scripts and ecommerce scripts and this value can rise dramatically.

Further Profit

There are also plenty of other options to make additional profit. There are two main ones that spring to mind: advertising and affiliate marketing.

It’s a proven fact that where there is traffic there is money to be made, and even in situations like this where we are selling a product there is still plenty of traffic to convert. Experimentation would be required to find the best way to monetize the traffic but the best place to start would almost definitely be AdSense.

The more interesting way to make additional money from the site would be through selling extras such as skins and plugins. Most companies and individuals that offer these for particular scripts usually offer an affiliate program. Even if they don’t, a short email detailing your ideas might be enough to interest them in forging a partnership. Customers that have recently bought or are buying a script are ideal targets for these extras.

Startup Costs

All these nice figures and ideas about how much could be made each year is all very nice, but inevitably there are going to be startup costs. Every idea has it’s pros and cons and I like to label startup costs as cons. Unfortunately they are necessary in most scenarios and so the cliché goes ‘you have to spend money to make money’.
For this idea to become a reality you are going to need a website to sell the products from, an inventory of licenses and a sizeable marketing budget. I can’t begin to pretend I know what I’m talking about but I think this could cost less than 10% of what you stand to make in the first year, a fair investment for the potential revenue.

Summary

All in all I think this has the potential to be a very successful business. Why it is yet to be done is a question in itself. This is just one idea that draws from the fact that more and more, business models from the offline world are being successfully adapted and recreated on the web.

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