And I forgot to mention, there are monthly running costs too.
It all started in 2013 (or so) when I needed to buy a movie on iTunes and it was no small trouble. Many contents aren’t available for the Nigerian iTunes account. The changing your country to US makes those contents available but then you have to pay with a US debit card (one with a US billing address). After hours and days of troubles, I ended up buying a US iTunes gift card and loading on my US iTunes account.
Soon, I started buying more gift cards. And then I noticed that there would be people like me needing such cards too. So I did a market entry test. And was amazed by how much demand there is for US iTunes cards, even had a few people contact me from outside the country (India, Pakistan etc). Seems the problem isn’t just here in Naija.
Since then I have had the business idea to build a dedicatedly iTunes gift card sales site. Tried building it on my own but gave up when it wasn’t looking professional enough and decided to get a third party to do the building. First developer I contacted, in India, asked for over to $3,000! The maths didn’t make any sense to me – that is over N1.1 million. I then looked within Naija, and got another shocking bid – N2.1 million for building and 8 months support using PHP.
In the end, I got offers between N400k to that N2.1 million. I ended up going with a great guy who offered to do for N600k.
The site is now ready – www.usitunescard.com – and tested working great. Hand-over is next week, so if you are a developer or potential user you can help further provide feedback so I can pass to the developer before final hand-over.
To gain customers, I sell the cards at almost the same amount it costs to get them directly from Apple (actual face value). Only added the Paystack transaction charge and accommodation for exchange rate fluctuation but it still comes at less than N400/$ to the buyer/customer. While others on Konga and other e-stores are selling as high as a rate of N600/$ and more.
I am a little short of ideas on how to still be price competitive and break-even this year. In addition to the original N600,000 to build the site, there is an estimated N36,800/month to run the site (though I found a way to share this cost amongst all my online businesses).
What do you guys suggest?