"We found the existing sites and papers for classifieds to be a lot of hassle, mainly because there were no photos, and what was being sold was described in only a few words," explains Karlsson in the 'About us' section of the website.
Initially, the Karlssons maintained their fledgling website while they held down full-time jobs elsewhere. The only start-up capital the company had at its disposal was a EUR7,000 employment grant from the Wexford County Enterprise Board. Today, the SME employs five people full-time and it has an annual turnover of approximately EUR1 million.
Family matters
DoneDeal.ie's main source of income is the EUR3 fee each user pays to put up a classified ad. The site differs from larger rival eBay in that it's chiefly aimed at users with unwanted goods to sell, rather than at small businesses or entrepreneurs.
"eBay do auctions very well. I use eBay myself but we can't compete with eBay, which is basically for small businesses who want to sell things," says Karlsson. "You are not going to put a sofa on eBay because you are never going to get it auctioned off. Our main competition is Buy and Sell, but their focus is on the paper and not so much on online ads."
The DoneDeal.ie website is where the company conducts its business and generates an income. The site was designed and is maintained by Karlsson, who first got involved in IT when he was 16, selling computer games and writing code. DoneDeal.ie currently hosts over 89,000 ads and it has attracted over 4 million unique visitors since the site first went live. When asked about the reason for the site's popularity with Irish web surfers, Karlsson, perhaps unusually, cites his mother-in-law.
"My mother-in-law doesn't use the internet very much," he says. "We want to make sure that our website is really easy to use. If my mother in-law can't understand something on the site, we review that part of the site."
The majority of DoneDeal.ie's advertising budget is reserved for Google Adwords. The company spent a few months tuning its online campaign and Karlsson says that SMEs who are not getting a good return on their pay-per-click campaigns should examine the terms or words they are paying for.
"We advertised motorbikes and we got a lot of traffic but it wasn't very good because the visitors were looking for new motorbikes and information about motorbikes but they were not actually looking to buy or sell secondhand motorbikes. We tuned our ad to be more efficient and it has worked out really well," he says.
Business calls
One of the more interesting aspects of DoneDeal.ie's business model is that the SME allows its customers to pay the EUR3 listing fee by phone as well as by credit card. Customers who want to place an ad simply ring a premium-rate number where the call charge is fixed at EUR3. The company hired telecoms firm Sremium to manage this service.
"We were the first web company in Ireland to use phone payments," says Karlsson. "The phone payments have worked out really well because users have said it is really easy to use and really quick. The disadvantage is it takes much longer for us to be paid the money because the user has to pay their bill and the phone company has to be paid and then we get the money."
DoneDeal.ie places a big emphasis on interacting with its customers, as Karlsson believes this generates word-of-mouth business for the company. The SME maintains an active Facebook and Twitter presence. It also maintains a blog where people can read about what the company is up to, and numerous pages on the DoneDeal.ie website encourage customers to email in any suggestions or complaints, as well as to share ads with each other.
"We said from day one that we would reply to every email in one business day. We do get a lot of feedback from people," says Karlsson. "If you see a car on our website and you know that a friend of yours is looking for a car, you can easily send it on to them."
The company likes to uses open source software where possible and Karlsson recommends AVG Anti-Virus and Survey Monkey - the former for internet security and the latter to create customer surveys. DoneDeal.ie's staff use a combination of Vista-powered laptops and Apple Mac desktop machines and they mainly work out of the company office in Wexford, although staff can also work at home if need be.
Over the next few months the SME is planning to develop the mobile version of its website and Karlsson wants to make searching a more refined process. He explains that the mobile site in particular is key to growing the business as more and more internet users are surfing via mobile devices. "People who are out and about will mainly use their mobile to surf the web. That could account for 50 or 60 percent of our users in the future," he says.
*Do you know of an SME with an eBusiness success story to tell? If so, please send us an email with your details and a brief outline of the reasons why you think it would make a good case study candidate.