Today @GiordMarco96 mentioned in a comment ValueSERP.
Lets take them as an example for explaining the difference between a ‘good business model’ from one that is not so good.
ValueSERP’s Offer
ValueSERP provides scraped Google results. It’s a wrapper around Google’s Search Engine.
You send the request to ValueSERP, you get the Google results for that query in a nicely formatted JSON. No proxies, no limits, no blocks, no parsing. You send the query, you get the result. That’s the value they provide.
Demand
And there’s definitely demand. The economy is highly data driven nowadays. Everything relies on data. From marketing to ML model training. Data is everywhere.
So, lots of demand… Sounds like a good business model, right?
Well..
Lets dive into what’s not so hot.
Control
ValueSERP’s offer depends wholly on Google. Google could change at any time.
Example: Tomorrow, you need to be logged in to perform a search and you are limited to a certain amount of searches per day. ValueSERP would have to own tens of thousands of Google accounts to keep providing their service.
In short: One change from Google and their business is history. The opposite of control.
Thin Margins
This goes hand in hand with the next point.
The margins are thin. You have to pay a lot for proxies to scrape at scale. You can only scrape a certain amount of results every day from each proxy, before it gets blocked. Thus there’s a baseline of what you can do per proxy. So your leverage is kind of limited here.
Simple math: Client pays $1 per result, you can do 10 results per proxy, so you are limited to $9 profit per proxy and day. No way to increase that.
The margins are thin already. If you could only determine your profit…
Competition
Their offer isn’t special. You can copy&paste your own scraper, you could even just ask ChatGPT doing it 😂.
When everybody could be a competitor, and the offers doesn’t differ, you are competing on a price level.
You know how this ends. You and your competitors will lower the prices until there’s just enough left to keep the lights on.
Remember: You are competing on a price level, not on a value level. Which is never good.
So even if there’s high demand, you can’t operate your business well because of the previous ‘limitations’.
Your business should always compete on a value level (providing value others don’t/can’t), not on a price level.
Hint: You might see those patterns also in affiliate marketing, both in SEO and with paid ads.
Btw, this doesn’t mean their business isn’t running well currently. Just means you could do better 😇