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Subsistence of the Network |
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Small-scale web sites can be created and sustained by a single individual.
LUGNET, on the other hand, is by nature a monolithic web site which, over time, is likely to become very expensive to sustain.
Proceeds from AucZILLA auctions will help fund the initial development of LUGNET,
but LUGNET will need to become self-subsistent within two or three years.
This does not mean, however, that LUGNET will prey upon its members for subscription fees or donations --
it is a fundamental tenet of LUGNET that all general-interest information shall be freely available, even to non-members of the community.
This includes all information on the LEGO product line, about various LUGNET markets, the contents of user group message boards, information about member creations, and about members themselves --
basically, everything in the system, except for things which people have voluntarily declared to be private.
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All general-interest information shall be freely available
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How then will LUGNET subsist?
Subsistence revenue can be generated three ways:
- Sale of Membership. A small, one-time fee for joining the community will provide an initial revenue stream.
A reasonable fee will be determined through market research.
- Sale of Auction Services. Subsequent fees for services such as conducting auctions will provide ongoing revenue.
Reasonable rates will be determined through market research and through adaptation up or down over time.
- Sale of Shipping Services. Third-party parcel shipping services will provide ongoing revenue while saving the community money.
Rates will be based on parcel courier cost savings.
Since these three revenue-generation devices are generally independent of one another, any two will provide backup should one experience a slow period.
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Auctions, third-party shipping services, and one-time membership fees will provide subsistence
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It is expected that most software-based services will be free of charges, since charges can be a hassle to collect and are probably not necessary for everything in the first place.
Auctions, however, are an excellent target area because they organize monies from many people into a single place, thus greatly simplifying fee collection,
and because a reliable auction service, simply put, creates money out of thin air for people
(assuming of course that the auctioneer is passionate about what he or she is selling, and that it is all a "labor of love").
Note that no fees will be collected for participating in an auction, only for conducting an auction (although one must be a member of the community to participate).
Auction commissions will be based on a flat percentage or on a bracketed percentage table.
Commissions are likely to be lower for set auctions than for piece auctions,
since the software and the traffic involved in orchestrating piece auctions is significantly more complex than that of any other type of auction.
Higher relative fees for piece auctions also reduce conflicts with AucZILLA auctions,
which in the early stages of LUGNET is an important source of fundage.
As the LUGNET market grows, it is expected that AucZILLA market will shrink.
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Commission-based auction are practical and reasonable
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