What is LetsBuyIt.com?

Background Knowledge:
 Founded in January 1999 in Sweden

 USP: brings together buyers to drive down prices from suppliers

and manufacturers of goods
 Website was launched in April 1999

Company’s history was turbulent:

 To gain awareness and to raise the number of members quickly:
heavy brand building and marketing
 Gain in profit was not able to compensate costs (11 Mio/month)

 Plus: People recognized the mascot but not the companies’

purpose
 IPO (Initial Public Offering) was not able to change the situation

 Further cost-reduction

 In January 2001, LetsBuyIt.com stopped operations.

© by Robert Wittke, ………

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Case: Letsbuyit.com
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Did the original brand investment strategy fail?
Facts:
 Initial Investors and Marketing have been chosen wisely

 The reinvestment through IPO seemed planned

 BUT: Somehow LetsBuyIt.com was not able to generate the needed profits in order to
compensate the costs

Discussion:
 In November 2000, LetsBuyIt.com was awarded a prestigious marketing award, the
Golden Euro Effie (new media category).
 BUT: More and more people recognized the company’s mascot, the ant, although still
few people would know what exactly the company was offering or doing
 AND: Ist das Geschäftsmodell tragfähig? Kein/selten feedback

 Therefore the brand investment strategy might have worked, if the marketing would
have been more efficient.

© by Robert Wittke, ………

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Case: Letsbuyit.com
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How could company increase sales?
 Clear and specific advertisement (clear target groups)

- Advertisement method: tv commercial, internet search

engine, facebook, twitter
 Clear and easy service/website

- Customer don’t like too complicated. Making easier to

shopping, and Attract customer’s attention!
 Cheap service and especially cheaper then elsewhere

- The most big advantage of Letsbuyit.com is cheapness.

compare with other sites
 Result: satisfied customers will do promotion for you
(word of mouth)
 Spin the cycle! The more people join the bidding, the
more customer takes goods faster. (better service)

© by Robert Wittke, ………

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Case: Letsbuyit.com
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How attract people’s attention?
1. TV commercial
- Although TV commercial needs lots of money, it is very
clear and sure method to advertise Letsbuyit.com.

2. Internet search engine marketing

- Many people use Internet search engine including who
want to shopping by internet. If do good, it can be very
efficient.

3. Marketing in Facebook and twitter

- Select some product which is much cheaper than retail
price and spread in facebook and twitter.

© by Robert Wittke, ………

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Case: Letsbuyit.com
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The acquisition of LetsBuyIt.com for 1 Mio Euro seems to be risky
 17,8 Mio shares were sold at 3,50 Euro per share in 2000, capital
expenditures of 11 Mio Euro per month
 new investors raised 52 Mio Euro in 2001, but loss of 41 Mio Euro in
2002
 2002/2003: one share values less than one Euro-cent, 17,8 Mio shares
represent a company value of 178.000 Euro
 „BSG Valentine Chartered Accountants“ (Consultant Group) invested 10
Mio Euro and signed with partners one billion new shares in 2002, but
transfer of LetsBuyIt.com to „LBI Holdings Ltd.“ in 2002
 Delisting of LetsBuyIt.com at the stock exchang and no further
financial data is published, nothing known about the current
economic status

 Investments of 52 and 10 Mio Euro didn‘t lead to a profitable service of

LetsBuyIt.com, the expenditures were and certainly are far too high
 It is highly uncertain that the service is profitable

 The acquisition costs of 1 Mio Euro seems to be too high

© by Robert Wittke, ………

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Case: Letsbuyit.com
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Today, LetsBuyIt.com is online but doesn‘t value a lot

LetsBuyIt.com Cobocards.com Mitfahrzentrale.de Ebay.com Amazon.com

 
Estimated Worth
70.975 38.497 112.783 110.604.390 154.922.867
(USD)
Income Per Day
95 11 84 152.381 213.333
(USD)

Daily Pageviews 11.143 576 9.884 53.333.333 74.666.667

Income/Pageviews
0,85 1,91 0,85 0,29 0,29
(US-Cent)
Source: ValueTheWebsite.com

 In comparison to other start-ups and with his investment-history, LetsBuyIt.com does not value a lot

 The website seems to be profitable with an icnome of 95 US-Dollar per day

 The absolute value of the website is estimated at about 71.000 US-Dollar which does not justify a
price of 1 Mio Euro

© by Robert Wittke, ………

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Case: Letsbuyit.com
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