CeXchange 1.0 (Commerce Software Exchange Server) Cost and process (draft - 21 Nov 96, 07 Dec 96- evolving):

Buyer pays via credit card in USA (could be different in other locations) for the selected items, third party (a.k.a. verifone, creditnet) authorizes the purchase, buyer downloads the software. Buyer is notified via the e-mail how much was spent.

Operating cost for CeXchange:

• 5.5% of the transaction amount (3% bank transaction/authorization fee plus local taxes paid as a service income = 2.5% at this time in WA/USA)
• 5% of the USA transaction amount to the partners overseas
• $600/month connectivity fee
• $2000/month operation and system maintenance (contracted)
• $2000/month marketing cost (contracted)
• $3000/month consulting/management - Jiri Janecek monthly income which covers the cost of running Home Office and finance cost of the capital expenditure (credit cards interest)

Capital Expenditure:

• $10,000 capital equipment cost = servers, operating systems, back office SW
• $50,000 custom development and initial marketing cost

Authors Revenue:

• 75% of service/software revenue if she provides REQUIRED Forum help and Technical support
• 70% of service/software revenue if she does NOT provide Forum help and Technical support - where the technical support is outsourced at 5% per item sold or at $1 per item sold (whatever is greater)

Minimum item cost sold (could be a group of items from the same source) is $10 - there is no maximum limit.

Authors Cost:

Basic entry/initiation fee is nominal $10 for XCartE.com.usa (= CeXchange) - just playing with new names -and monthly fee = $10 plus the price of all items on the site (i.e. $20/month would be minimum)

In this cost is included:

• WWW pages (standard page is generated filling the entry form)
• FTP services
• Database based catalog
• 3+ e-mail addresses
• SSL/SET transaction processing
• Help/Technical support Forum
• 10MB plus storage
• Site statistics
• Site search engine
• Site authoring tool

Basic site should be generated automatically and could be extended by the author - additional customization is available at extra - programming rate

CeXchange.com.usa Revenue:

25% -from the USA transaction gross

20% of the overseas partners gross income (i.e. like .2 x .25 = 5% from their gross)

CeXchange.com.usa Net Income estimate at $100K gross transactions:

depends on the volume of transactions in USA and overseas. Assuming that USA = Overseas transactions and the volume is $100,000 per month then

gross income from transaction is $25,000/month

gross income from hosting (assume 100 suppliers sites at $20 each) = $2000/month

Expenses: - $(5,500) bank plus tax fees -(variable cost)

$7,600/month operation and marketing - $5,000/month amortization (12 month schedule) of capital equipment (fixed costs) = (12,600)

Net Income: <$9000/month

Breaking Point? - around $50 000/month sales?