NICHE MARKET
Americans spend roughly $140 billion a year on paint, two-by-fours, faucets, rain spouts, and other fixer-upper necessities - about seven times what they spend on books. What's more, these items tend to be uniform and bulky, making delivery a bonus. So given Amazon.com's success with books, why has no one nailed the home-improvement category?
Industry leader Home Depot won't discuss its Net strategy, but rival Lowe's expects to be up and running by midyear. Meanwhile, several start-ups, including Home Building Resource (www.homebuildingresource.com/) and ImproveNet (www.improvenet.com/), are cornering market niches. And ImproveNet's got a blueprint that may pay off even after Home Depot wakes up.
ImproveNet matches renovation projects with its database of 600,000-plus local contractors who have been prescreened for proper licenses, good credit, and legal histories. Because the service is valuable - finding a good, honest contractor is like trying to find a spouse on deadline - it's seeing strong demand.
Most important, access to this client base lets ImproveNet draw on at least four different income streams before turning to banner ads: Contractors pay $6 for a chance to bid a job (plus a percentage for jobs they win); suppliers of big-ticket items pay for leads - clients who are making once-in-a-lifetime purchase decisions; architects and manufacturers pay for enhanced placement in a design gallery and virtual store; and homeowners pay a fee for background checks on contractors not hired through ImproveNet.
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