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I've developed iPhone and Mac applications in the past, with reasonable success. Back then, Apple would take care of the distribution, and sales were pretty constant.

I just launched a website where developers can buy and sell source code. The idea itself is rather cool and there seems to be quite a market for it, but it has already been done, so I had to put a new twist on it. I have several advantages over my competitors:

  • Very low commissions on sales (7%-10%, in comparison with 30% to over 50% in the rest of the market).
  • No code exclusivity required.
  • Simplicity (social media login, Paypal checkout, etc...).

In theory, it seems the first two points should already be enough to win a part of the market. Indeed, by switching to my website, sellers would save lots of money.

However, this just isn't happening. After around a week, we only have ~10 users, and 1 listings posted (excluding my own).

We've tried posting in forums, and this has had reasonable success (as in it was the only thing that "propelled" us to 10 users). We've tried emailing bloggers who are known for writing code and releasing it to users on their website, to no avail. Finally, we have little to no acquaintance with other developers we could contact and pitch our website to.

What should we do? How can we boost our original traffic? Once the website gets started, it should keep on going; all it needs is an influx of users, both willing to sell and to buy, and it should be able to work.

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2 Answers

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eBay is a great site, but it has high fees. I can find any number of PHP scripts I could buy for loose change that implement all eBay's core features, support more auction types, integrate with all the common payment platforms and could get me up and live in two, maybe three hours. Why aren't we all auction site billionaires?

Your core assumption is that the definition of 'better' is 'lower commission.' That can't be true

If I want to sell my code, am I better to go to a marketplace with 100,000 users and 30% commission, or one with 1,000 users and 3%? Do the math. If I want to buy some code, what am I looking for?

If you want to get traction, here's my advice.

  1. Decide if you're willing to put time and effort into this ("After around a week..." makes it sound like this is not your strong suit!)

  2. Reach out for developers who are already selling code in other places. Build relationships. Ask what they need out of a site. Ask for their help getting your first 50 source code listings. Be very, very grateful when they take a risk on you by giving you their 30th best piece of code to list. Charge these first users nothing at all, outside the fees your payment provider extracts.

  3. Spend time working out how you're going to publicize the site, and the best way to pay for the time and money that implies. Make a guess that, if competitor marketplaces start at 30% fees, then you might want to reserve 10%+ of the sale for promotion costs alone. Play with your commercial model.

You need to decide if you want to create a website that anyone could use - and see if you get lucky; or if you want to create value for code creators and code consumers and build that into a real business, with all the hard work that entails.

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Thanks for the valuable information. I definitely understand your main point, that people will go with established websites, even though they might have a higher commission. – boopyman Apr 9 '12 at 16:19
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I think your assumption is incorrect. You expect that low commissions and no code exclusivity should be enough to attract people, but I don't think that's the case.

Lets say one of your competitors takes 50% of the sale, but they have a large customer base. I would rather sell something for $10 on that site and get 1,000 sales ($5,000 profit for me), than I would on a smaller site that gives me 90% but maybe only gets me 100 sales ($900 profit for me).

If that competitor has code exclusivity, well I can't and won't put my code on your site.

Now I don't say this to dampen enthusiasm, I say this because I think you need to work harder to attract them to your site, and not just rest on your low commission as the selling point.

Perhaps you could have some of offer to encourage them that isn't about the profit itself. Maybe for every sale they get, they can download someone elses code you have for sale for free. This gives a benefit of access to other code for free if you are selling via your site. Even if this isn't a great idea, I think start thinking outside the box a bit more and find a benefit other than revenue, it's too hard for you to compete on that front right away.

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