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The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customers' Cash by John Mullins

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3Buyers and Sellers, but Not Your Goods: Matchmaker Models

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Every business sells something, of course. Wouldn't it be nice if, in your business, you didn't have to pay anything for what you sell? If you think about it, even for a moment, you'll conclude that doing business this way isn't rocket science. After all, this is what real estate agents and many other kinds of brokers have been doing forever. They don't buy the house you want to sell, or the apartment that you want to rent to others. But they do help you sell it, or rent it, and when they have done so, we pay them a commission or fee for their services.

Let's think about such a business from the Realtor's perspective. What sort of investment does he or she need to get into that business? Some business cards, a cell phone, and a network that will provide some properties to sell or rent and generate some prospective customers. Total investment? Other than the founders' time, virtually nil.

Matchmakers (sometimes called marketplaces), like the proverbial Cupid on Valentine's Day, do exactly what a Realtor does. Matchmaker models are those in which the business, with no or limited investment up front, brings together buyers and sellers—without actually owning what is bought and sold—and facilitates and completes transactions, earning fees or commissions for doing so. Those commissions or fees can, in theory at least, come ...

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