Cool Internet Business Model: OneShare.com

The Internet is all about finding opportunities to make money by doing things that nobody else thought about. You find a niche that’s proven to spend money, and then exploit it. OneShare.com is a great example of creative thinking in Internet models.

OneShare.com buys large quantities of stocks, and then allows people to purchase shares (usually a single share), with a certificate, framed, for anyone they want. It’s a great gift to give a newborn or graduate. It’s been done a long time by direct marketing companies, but you’ve never been able to pick out which share you want, the frame you want, and how it’s all going to look together.

I'll call it the break-apart business. Buy large chunks of a product, and break it apart, wrap it individually, and sell it. This particular product has the advantage of appreciating (during good times) after you've bought it...

Where's the beef?

As of this writing, OneShare has an Alexa ranking of 42,165. According to my non-science, this means around 5,000 daily visitors. At 2.5% average e-commerce conversion rate, they're closing 125 people per day. If those 125 people are all buying a frame ($44) and the transfer fee ($39), they're making an average of $10,375 per day. This site is well put together, with a tight niche, highly customized, so I'd guess that they're closing more like 5% of their daily traffic. That pushes the daily revenue number to $20,750 per day. I can only imagine that a company like oneshare gets a big chunk of their yearly revenue around Christmas time, repeat customers, and stock appreciation (buying chunks of good stocks low and selling them high), but we'll just keep it simple.

If you take $20,750 per day, times 365 days a year (internet businesses run all the time), you come up with $7,573,750 of annual revenue. Seven million isn't chump change. It's not Fortune 500 money, but after expenses, it's enough to buy someone a nice mansion, and a Ferrari to go in the garage! In fact, someone at Oneshare is not doing too badly... They've offered $100,000 for Barry Bond's 715th homerun.


Reasons for Success

The only form of advertising OneShare does that I can discuss intelligently is adwords. I know they buy a few keywords that are directly associated with their product, like "buy one share of stock", "one share", "buy disney stock", "stock certificates", "buy apple com". They are the top advertiser on google for each of those keywords. They also buy several other more general keywords like "buy shares online", "buy and sell stock", "perfect gift", "stock to buy", but they don't rank near the top for those keywords.

By the way, if you ever want to find out what keywords a company is paying for, this is a really cool tool. Check out Googspy.com.

Another trick I use to find out where a company advertises is to look on their checkout page for a "How did you find out about us" drop down box... companies don't even know all the information they give away for free...

Using this trick for OneShare gives us the following options:

• Return Buyer - as we discussed earlier, they probably get a lot of repeat business
  
• Email from OneShare - Direct email campaign? Renting a list?
  
• Disney Magazine - An obvious good market for them - adults that would be interested in purchasing a framed share of Disney
  
• From a Friend - Word of mouth
  
• From a Broker - Kickback?
  
• Google - PPC, as discussed above
  
• Yahoo!
  
• Other Search Engine
  
• Banner Ad - Banners are making a comeback!!
  
• Newsgroup/Web Board - More word of mouth - perhaps a guerilla marketing tactic?
  
• Local Newspaper - If they're advertising in the local paper, they're onto a big secret...
  
• Radio - A lot of internet companies are moving onto the radio, with 60 second spots, and sponsored blurbs.
  
• Television - TV is big timing it, but I doubt they're using this widely, or it would be closer to the top of the list
  
• USA Today - More newspaper advertising. The fact that they mention USA Today in particular means that they were running a test campaign in this particular newspaper...
  
• Other
  

How to Steal This Idea

Any item that can be bought in bulk and split into smaller pieces and sold as a gift or novelty can be used. My favorite is EducationalCoin.com. Gary Halbert, the best direct marketing copywriter in the world, buys one yen coins from them and attaches them to letters that go out to Joe America (in order to get their attention when opening the letter).

EducationalCoin.com obtains large quantities of coins from around the world, and sells them in massive quantities. For $19.50 you can buy 100 Japanese yen coins. These coins can be used for educational purposes, gifts, or more likely, direct marketing campaigns.


Standard Disclaimer

The data and analysis in this blog are complete guesses, not remotely researched, and should not be taken seriously. This is meant only to show the basic business model of the site, and why I think its special (to be loved and admired). If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.