Vladimir Nikolić, Director of auction website Limundo - We will launch new site with EUR 350,000 worth of investments

(Zdravko Lončar i Vladimir Nikolić)

Limundo, the most successful auction website for physical persons on the teritory of Serbia, was launched in 2006 by brothers Nenad and Vladimir Nikolić, but the turning point in its development was year 2009 when EUR 435,000 were invested in the project. Total of 11 European companies invested in Limundo because they recognized the importance of development of such sales system in Serbia.

In the period when the invested money and the put effort have finally started to pay off, these investors decided to start the second round of investments. The Limundo's owner and director Vladimir Nikolić speaks in the interview for eKapija about the launching of new service, protection from abuses, the most expensive and the most interesting items.

Limundo - the center of optimism with new EUR 350,000

- About EUR 350,000 will be invested in Limundo prior to end of April - says Nikolić.

- The same investors whose money significantly affected our development last summer are going to invest that money in making us stronger and better. The two-phase investment was also a part of our business plan at the beginning of the cooperation and we still successfully stick to that plan.

Nikolić exclusively reveals to eKapija that the new project is being prepared and that it will be launched prior to summer 2010. It is a new website whose primary task will also be the sale, but not through auctions. Also, the subjects of the sale will not be the same as on Limundo.

- We are creating a new site that will be similar to Limundo, but it will be based on a new principle, which will still fit into Limundo's family.

Good idea - and then what?

A good idea in business circles is worth a lot, some even think it's worth more than anything else, but the path from its creation to realization is neither short nor simple. How did these young people persuade foreign investors that their idea is initially worth nearly EUR 0.5m?

- Before them we had an investment group that was willing to invest, but was much too afraid of risk because our company was still young and unprofitable and the project involved the use of Internet in Serbia in 2009, the year of crisis - it did not seem optimistic at all. The believed in us and our ambitions more than they believed in the product itself. When they invested in us, Limundo had only 5 employees. Now, less than one year later, the company has about 20 workers.

Limundo's source of incomes is the percentage we take from successful auctions. The buyer pays only the auctioned price directly to the seller, while the seller gives certain percentage to Limundo. The amount of our fee depends on the price of sold items and ranges between 1 and 4%. There are some additional options that we charge for. For example, uploading of each additional photo is charged RSD 5, while listing of items for sale is free of charge.

Although you exist since 2006, the investments did not start paying off until recently?

- We did not feel the return on investments until late 2009 and early 2010. Although Limundo is still unprofitable, we still invest more in development in order to achieve our goal - to become the best auction website in Serbia. In that way we will create higher value, while the profit will come eventually.

Safety of transactions - reference model for competition

A new member is registered every four minutes and Limundo currently has about 50,000 active users, while its database includes about 100,000 registered people.

- That means that there are 50,000 people who were either rejected after the initial check or suspended for breaking the rules. The level of checking process is very high since we verify users' e-mail addresses, mobile and fixed telephone numbers, and even ID cards in order to maintain Limundo's quality. Our competition even took some of our users by saying: "your mark on Limundo was such and such, we will take that mark for granted without checking you". Therefore, we have become a model for all others.

Nikolić is of the opinion that they currently do not have a strong competition in Serbian market, but he expects large newspaper companies such as Blic and Press to enter the e-commerce market soon.

What the potential users are interested in the most is who guarantees they will get what they bid for, especially if they first have to pay the money and then expect the delivery of the item?

- First of all, the auction must be closed on Limundo. When you see a desirable item, you offer the money. Upon the expiration of the auction, if you win, you will get the information on the seller, after which you will be able to contact him. There are several ways for the buyer to take over the item. The first is COD, that is, cash on delivery. The second is that the buyer meet with the seller if they are in same town. And the third way is that the buyer pays the money to the account of the seller who then sends the item to the buyer. In all cases, the guarantee is the level of Limundo's previous check - says Nikolić.

In addition to checking the users, Limundo also checks the auctions themselves.

- The moment we notice some irregularities, we discontinue the auction. If a mistake is accidental, Limundo will fix the things as the mediator. In case it is proved that, for example, you are the damaged side, the other member of the transaction is suspended and pressed criminal charges against. The other way is that we pay the compensation if the transaction is big, but such cases are so rare that they could be measured in per miles – Nikolić explains.

The items whose sale is not allowed are pirated and plagiarized goods, as well as the items whose distribution is forbidden by the Law.

(a Limundo member)

From an autograph to Joe's dredge - from RSD 10 to EUR 100,000

The largest number of items on Limundo are in the category of Electronics. Mobile telephones are on the top of the list, followed by Collectibles.

- Collectors find our site a paradise. A colleague of ours has recently heard some record collectors saying at the Exhibition of Collectibles that they sold more items via Limundo than they did in their stores and at similar exhibitions.

According to Nikolić, the proof that there is market for everything is the Garden-Yard category.

- One month ago we introduced that category and there is now a potential buyer for every second item in it.

The most expensive item ever sold via Limundo is Joe the Dredger's "revolutionary" dredge, which cost about EUR 100,000. The cheapest and, maybe, the most interesting item was the autograph of one of our members, written on a napkin, who put it up for sale at the starting price of RSD 10 with the note that he may become a celebrity one day, so that his signature may be worth a lot.

Such items usually reach the price of RSD 50 to 60.

Portal Limundo was one of the finalists for the 2010 Aurea award for the best investment in Serbia in 2009, which is granted by web portal eKapija.

J.Đ.