I've inserted a couple of comments below. You didn't say much about VA's
site objectives. Basically, you need to decide if your primary plan for
building revenues is through (1) selling ad space, or (2) earning a
commission on sales transactions. It's kind of hard to have it both ways -
the strategies are quite different.
From: Aarupertus@aol.com <Aarupertus@aol.com>
To: email@example.com <firstname.lastname@example.org>
Date: Monday, June 01, 1998 9:49 AM
Subject: AM: Ad/Store rates
>Greetings Ad Group,
>I would love some help here. I am developing a site called
>Virtualathlete.com. As part of our service I will provide an online
>equipment store. I have identified and contacted a number of vendors who I
>would like to have in the store as a resource to the Virtualathletes and
>Here are some details and related questions for you:
>1. One vendor I have asked to be in the store is willing to give me all
>graphics and goodies for the storefront and in return, VA will get 12% of
>sale. Since the site is new (well, not even live yet) we will also get the
>extra benefit of having their good name on our site. Intially, if vendors
>have the material to give VA then I see only asking for a small set up
>for time. But, if VA has to do all the set up and design for another
>vendor, then I will charge and have a fee for that based on design &
>So far it seems easy. But, would you suggest a monthly leasing fee as
>What about the first vendors who are willing to risk with me? Initially, I
>was going to charge $500 per month to lease the space but am beginning to
>think that maybe for now the commission on sales should suffice. Thoughts?
This one is (kind of) easy. Will 12% of $X exceed $500 on a monthly basis?
I realize you've not yet gone live, so neither you nor your potential
partner can answer this definitively.
>2. This same vendor asked me about our ad pricing. Hmm. Here is my
>In my business plan I calculated offering a minimal 0.50 per cpm right off
>bat. But, since the site is not live yet, I am not sure what to say about
>pricing. While I have some great market research saying that people will
>this site, I cannot guarantee anything yet. My thought now is to offer
>advertising for the first month the site is live and then 0.50 + as the
>grows. Any words of wisdom on this for me?
Do you really mean $0.50 CPM? Or $5 CPM?
>Thanks in advance for your attention. Have a great day.
>Amy R. Peacock