How Do Internet Cafes Make Money?

[mittheimp]

lets say 14 computers - 20 Baht an hour - open 10 till 10 so 12 hours. Each computer can make a maximum of 240 Baht a day - 14 make 3360B a day. This however is highly unlikely. Most places are very lucky to work to 20% of their capacity -so 700B a day - a really good day!! So i would imagine most places would take in less than 20,000 a month. Take out rent, staff pay, air conditioning and the big investment in the computers in the first place it doesnt seem a remotely viable business at all! It would take years to get back what was invested in the business in the first place.

Obviously im not talkiing about the internet cafes in prime locations in shopping malls or tourist spots - but the typical small ones that generally get custom from school kids.

Are these places covers for other business or have I got my figures wrong.

Can anyone shed any light?

[Thaiquila]

They really don't appear to be great businesses. Of course , you can charge more if in a prime location, but then the rent will be higher anyway. Lots of cafes offer premium overpriced services like printing and international phone calls, so that could help.

Overall, I really don't see the appeal of that sort of operation in Thailand. The prices are just too low and the competition keeping the prices low is too great.

[geoffphuket]

lets say 14 computers - 20 Baht an hour - open 10 till 10 so 12 hours. Each computer can make a maximum of 240 Baht a day - 14 make 3360B a day. This however is highly unlikely. Most places are very lucky to work to 20% of their capacity -so 700B a day - a really good day!! So i would imagine most places would take in less than 20,000 a month. Take out rent, staff pay, air conditioning and the big investment in the computers in the first place it doesnt seem a remotely viable business at all! It would take years to get back what was invested in the business in the first place.

Obviously im not talkiing about the internet cafes in prime locations in shopping malls or tourist spots - but the typical small ones that generally get custom from school kids.

Are these places covers for other business or have I got my figures wrong.

Can anyone shed any light?

The answer is quite simple really - They don't. Most close within months of opening. It's the same situation with small restaurants and bars. It's almost imposible to make enough each month to pay the rent for the premises let alone, staff and bills. Of course there's always an endless supply of eager farang buyers with more money than sense, so the shops never actualy close, they just change hands.

[kayo]

Internet shops make a lot of money

off of the users of the fololowing website...

..........ready?????

[Pattayaman]

I own 2 internet cafes in Pattaya and one in the village where i live 15k from patters and yes they can make money i have owned mine now for over 5 years

[Thaiquila]

I didn't mean to suggest they can't possibly make a profit. Of course, they can. It just seems that the pricing power is so weak, that those profits would be quite limited.

[mittheimp]

I own 2 internet cafes in Pattaya and one in the village where i live 15k from patters and yes they can make money i have owned mine now for over 5 years

how busy do they have to be to break even?

[wolf5370]

A good friend of mine had a couple several years back when they were a rare sight. He originally opened them as gaming cafes - i.e. he bought a job lot of PS1 machines on the cheap and a load of games and charged in units of time. This was not in a major city, but in a reasonable sized town in central LoS.

There was no aircon, but fans, so no real cost there. The two offices where very cheap to rent and he paid someone to manage it. The managers were on a percentage, so it was in their best interests to bring in the punters. It was always packed with kids (even during the school hours ).

He upgraded the kit as soon as things got cheaper - i.e. he always bought yesterday's technology just as the new kit came in. He also sold the old kit off to other people trying to copy him (muppets!).

He sold them about 5 years ago (give or take) as there was a lot of competetion and the money had slacked off as more of the kids got to use computers at school or home and bought the copy games.

He had (has) many irons in many fires, so this was not bread and butter stuff for him, but he made enough out of it while things were goos - and he got out before the competition out competed eachother and lossed all the margin. I think both shops shut down within a year of him selling them (one definitely did)

[Pattayaman]

Can break even during low season,but i have to uni graduates who do thai -english-thai translations and that can make good money from the girls getting email from the farang ATM

[Mighty Mouse]

Pattaya has many internet cafes available, from very basic set ups with slow connections to more upmarket shops with faster connections.

Some cafe owners sell drinks/food to users, others offer free cold water and/lollies, but the airconditioned shops with individual cubicles and fast connections are the ones that attract me.

Another plus for me is well maintained computers.

I have seen many cafes close after a few months because their opposition had better, more comfortable premises.

A guesstimate from me would suggest that at least 65% of all tourists use internet cafes to maintain contact with home.

[Thaiquila]

Yes, they are popular, but because there are so many, the rates are so low. Not a matter of popular, its a matter of profit potential. No pricing power, no great profit potential. Do you think Donald Trump would be interested in a Thai net shop?

[The Skipper]

And don't forget that for some Thais, a 4000bt profit per month is enough to get by.

Hard to compete.

[Ulysses G.]

Of course there's always an endless supply of eager farang buyers with more money than sense, so the shops never actualy close, they just change hands.

Like MANY tourist oriented businesses here.

It drives the rents up to absurd levels as well.

[Soju]

As has already been mentioned, the extra services, drinks, snacks, etc. can often make the difference between being profitable or not. If there are many farang customers, chances are many of them will just be checking their email and if they don't have any will leave after just a couple of minutes. I do this all the time. If the minimum charge is 30 minutes or 1 hour, then they get a lot of these types of customers, then it may look like they're not very busy, but they might be making as much money as a place that was packed but everyone stayed there a long time and got their money's worth.

Many of the cafes use old computers and pirated software, so actually their investment in equipment isn't as much as you think.

If an internet cafe location is chosen carefully and well managed, it can certainly make money, though probably never enough for one cafe to make a killing in a farang's eyes. But for many Thais who aren't used to making as much money, it can be a good business that they can live off of.