eBay Promotion? Or Hidden Price Hike?

On June 16, 2009 eBay will implement a new listing fee structure. They are promoting this new fee schedule as a good deal to sellers in which eBay is allowing each seller to list five auction-style listings per month for free but charges a Final Value Fee of 8.75% on the sale price or a flat fee of $20, whichever is lower. All additional items sold will have the current fee structure applied to them.

eBay has been encouraging high-volume sellers and simultaneously been pushing the fixed-price format, which makes up about half of eBay’s volume. In the first quarter of 2009, Fixed Price grew 12 percent while Auction format items declined 20 percent. With the new promotion, eBay is trying to attract unique items listed in the auction format.

Let’s do the simple math on this new promotion and see if it actually does save sellers money. Assuming the items do not sell, it will save the seller up to $20 a month assuming they list items over $500. Currently, if you sell an item for $50, you pay $1 for the listing fee and $3.07 for the final value fee, totaling $4.07. With the promotion, the $1 is waived but you are now charged $4.38. Let’s take a $400 dollar item; you are charged $3 for listing it and then $15.32 in final value fees with the current fee structure. With the new promotion, you will be charged $20 because 8.75% on $400 is $35. The only way to take advantage of this promotion is to have items sell under $25 or over $485. If your item falls in between those numbers, I would recommend to work around this new fee structure. Users who use an eBay tool or a third-party listing tool will not be eligible for this offer. Maybe it is now time to look into tools? Or maybe just list 5 low value items first every month.

Their fee structure does not compare to any of the eBay alternatives [Wigix/Bonanzle/iOffer] out there as those sites are clearly lower in fees. Does this mean that sellers are willing to pay a premium to get their items sold?

Link to announcement: http://www2.ebay.com/aw/core/200905120954402.html

eBay & Resolution Do Not Go Together.

eBay revealed that they are trying to move dispute resolution from Paypal to eBay by the end of 2009. This is a highly debated move and it contains many aspects, but the one that stands out the most is the new [to eBay/Paypal, not credit card companies] policy about counterfeit items.

What happens if a buyer believes an item is not authentic?
When buyers file a claim alleging that the item is not authentic, we require the buyer to destroy the item. Once a buyer confirms destruction of the item, we will reimburse the buyer or provide an eBay coupon.

Source: http://pages.ebay.com/...

This policy has been around with credit card companies, but this is very new to the online marketplace and this seems to favor the scammer even more. Let’s take a case in which a legitimate seller is listing authentic Gucci purses and unfortunately runs into an illegitimate buyer [this happens all the time]. The transaction takes place on eBay and everything seems fine until the item is received. Then, the seller gets a notice in his inbox that notifies him that his Paypal account has been frozen due to receipt of item ‘Not&a... Now, Paypal asks the seller to fax in documents, etc. which takes days and sometimes weeks to sort out. Meanwhile, the seller cannot withdraw money from his Paypal account to pay bills/suppliers/etc.&a...

With the new procedure, eBay would require the buyer to destroy the handbag. I’d say, in 9 out of 10 cases, the buyer would ... report that the item has bee... actually destroying it as what a normal person in their right mind would do. No... seller would ... of luck as he cannot even prove the handbag is realanymore. I have always sided with the fact that all of these protection policies and dispute resolution outcomes favor the crook and I think that’s what the majority thinks as well. Sites such as Bonanzle and Wigix have played it smart and left dispute resolution to the payment processors.

Will It Work? Told Who? ToldYa

Friendster, Myspace, Facebook and now Twitter. Every day, we are exposed to new widgets and apps that clutter our online profile. Create one that is a necessity, you might become the next Mark Zuckerberg. Earlier this week, we were introduced to the newest Web 2.0 child: ToldYa. They have created a way for items to be sold through the same channel where we communicate in. How? A portable, embeddable online store that allows friends to securely buy and sell on social networks, blogs and sites with ease. ToldYa uses a web-based software platform to create, host and manage Portable Stores which are placed in user’s profiles and blogs. Sites such as Wigix have already taken advantage of the social networking going on everyday by allowing their users to publish their recent activities to their Facebook and Twitter accounts. Is ToldYa going the right direction?

Let’s take a step back and see how this product is actually used. Friend A posts something for sale through ToldYa’s widget and it appears on his Facebook profile. Friend B wakes up and checks his Facebook, work email, personal email and then cell phone, in that order. Friend B sees in his Newsfeed that Friend A is now selling his iPod and is interested in purchasing it. Friend B clicks Buy and goes through the checkout process and schedules a pick up and will pay in cash when he picks up the iPod. The only advantage of this process compared to Wigix’s social publishing is that the actual transaction can take place on Facebook. Other than that, both provide the same functionality. So the bigger picture question is: Is this a widget that Amazon and eBay should be looking into building?

For more information on ToldYa: www.toldya.com.

Aroxo a new feature for eBay?

Aroxo: Cute name, pretty site, but old idea. I ran across this article on Tech Crunch today and was really shocked that another company is building something that has failed before.

Aroxo differs from eBay in which their product pages are static so that buyers and sellers are aware of each other, whereas all pages on eBay are dynamic. We do see eBay going to a SKU system and might easily be able to build a system very similar to this in the future as the current “Want It Now” program is not really successful due to the backwardness of it. This can easily become an add-on for eBay once they move towards a more structured catalog similar to Amazon or Wigix.

Currently, this structured catalog system already exists at Wigix. Wigix is an emerging marketplace that utilizes the NASDAQ model where buyers and sellers can place open buy and sell orders very similar to the bid/ask stock trading platform. Wigix was founded on March 28, 2007 and went to Public Beta on April 29, 2008 and reached 2,000,000 products in their catalog as of January 28, 2009. If I had 3 minutes with the founders of Aroxo, I would suggest that they have a meeting with Wigix before entering the US market to figure out if the model is excelling.

Priceline.com also tried to apply their bidding model to items outside the travel industry and learned firsthand that reverse auctions don’t work well with goods. They closed the doors on WebHouse Club, a privately held licensee of Priceline.com that allowed consumers to name their own price for gasoline and groceries. While Priceline.com’s travel business model has proven that reverse auctions do have merit, just not in all sectors.

At the end of the day I see Aroxo more of a feature that sites such as eBay will adopt, but not as a standalone entity. Best of luck!

Does eBay Equate to Auctions, Anymore?

eBay announced first quarter 09 revenue of $2.02 billion, a year-over-year decrease of $171.6 million. According to eBay, other sectors such as Paypal and Skype performed well compared their core Marketplace business where revenues fell dramatically. Bottom line, eBay’s net income for Q1 was $357.1 million which comes out to $0.28 per share.

Is this a wakeup call for eBay to return to its core business and ensure they remain the premier online marketplace? According to Ina Steiner, co-founder of AuctionBytes.com, “eBay’s marketplace sales dropped 18 percent in the first quarter versus Amazon’s 18 percent increase, showing there’s more going on at eBay than a strong dollar and bad economy.” This makes one think if one day eBay loses its grip instead of us saying “eBay it” we will start saying things such as: “Let’s Amazon it” or “I just Bonanzled it” or even “Brb, I am Wigixing.”

Skype

Skype, first Oprah now IPO, what a ride it’s been for them. Skype reported $153.2 million in revenue for Q1 which represents a 21 percent year-over-year growth. Skype also increased their user base by 37.9 million which brings their total membership of registered users to 442.2 million.

Paypal

Paypal reported a superb quarter with $643 million in revenue which is an increase of 11 percent year –over-year. The net total payment volume for Q1 was $15.86 billion which is an increase of 10 percent. Payapl’s number of registered users increased to 73.1 million which is a 22 percent year-over-year increase.

Marketplace

So eBay’s other two branches look really strong, how about their core/trunk? Their marketplace group, consisting of site such as Kijiji, Shopping.com, StubHub, ebay and more, recorded $1.22 billion in revenue which is an 18 percent decrease year-over-year. One bright spot was that their online classifieds revenue increased by 23 percent year-over-year which is a strong indicator that they are growing in popularity in comparison to the structured auction/buy process. After eBay spins off Skype, is Paypal next?

eBay Bucks. Great Benefit? Or Good Marketing?

eBay has recently announced that they are beta'ing a buyer loyalty program [Article Link]. This not a new thing to e-commerce as almost every retail site out there has some sort of affiliate/loyalty program in which you can receive cash back and sites such as FatWallet [Fat Wallet Link] make it extremely easy for you to take advantage of these deals. Many say this might be too little, too late for eBay, but I think it is a win-win proposition for them. What many do not realize is that, yes you can get 2% back on your purchases, but that incentive just become an eBay gift certificate that will have to be spent within 30 days on their site.

So let’s dissect this from eBay’s finance department’s point of view. Let’s pick a highly sold item, say an Apple iPod 4GB Silver 3rd Gen [Wigix Link]. Let’s take this eBay auction for example: eBay Link. The seller has already paid $0.35 [I won’t count the subtitle and just assume that was free] to list this item and when the item sells, eBay will collect another $5.20 or so. So eBay has made roughly $5.50 on this transaction. eBay is now going to give 2% of the final sell price back to the buyer, which is roughly $1.50. Like all gift certificates, I am assuming eBay calculated a 50% breakage, so they only paid out $0.75 on this transaction. Now, let’s say the buyer purchases 2 items this month on eBay and accumulates $3 eBay Bucks, what can one possibly buy online nowadays that won’t cost more than $3 to ship [ok, yes, if you have Amazon Prime]. At the end, eBay is really not giving up much, if anything at all, and gaining a ton of good press.

I wanted to compare this pricing model to one of a new emerging marketplace, Wigix. Wigix’s fee structure [and most new online marketplaces out there] is more competitive than eBay’s entire fee structure even with this additional 2% cash back. Wigix has no listing fee and charges nothing for all sales under $25, then a very simple structure for all items above $25. If that same iPod Nano was sold on Wigix, the seller would have only had to incur a fee of $1.50, a 75% savings compared to what they would have paid if it sold on eBay. Even if we factor in the buyer’s cash back promotion eBay is running, Wigix is still only charging 60% less compared to eBay. This pricing structure is extremely competitive and a great start for the promising company.

eBay Import Tool

Yep, Wigix did it again. A eBay Import Tool AND and bulk upload tool? All in one week? Wow.

Here is more information on it: Click Here

Hope everyone had a great Easter. Summertime is around the corner. See you at the beach.

Wigix Brings Community to Online Shopping.

Wigix Brings Community to Online Shopping


Wigix Launches New Ecommerce Community Network Starting with Book Lovers and Parenting

OAKLAND, Calif., March 4 /PRNewswire/ -- Wigix (www.wigix.com), the world's first online stock market for consumer products, today announced the launch of its community network, which aims to create a community of buyers, sellers and enthusiasts around specific interests. The communities allow users to interact with groups focused on various market segments including fashion and beauty, consumer electronics, green living, parenting, book lovers and more. This initiative is kicking off with the launch of the first two targeted communities - Toddults and Bookworms.

"One of our goals in developing Wigix is to provide a new online shopping experience created and perpetuated by the people involved. Most current experiences involve product searches that are convoluted, confusing and constrained, resulting in a grab bag of listings with varying degrees of information," said James Chong, CEO and co-founder, Wigix. "This does not engender a community of interest around an object of mutually shared desire; instead, buyers and sellers snipe and gripe over single trades where they should be debating and rating. We want to change that and provide gathering places for enthusiasts centered around their passions and expertise."

The Toddults community is where buyers, sellers and experts can come together with a focus on raising children. The community will allow consumers to find out from experts what products are best to raise healthy children from toddler to adult as well as discuss controversial topics including the octuplets mother, Heelarious high heels for babies and more. The Bookworms community is where users can share, discuss and vote for their favorite books. Buyers, sellers and enthusiasts can come together to share their knowledge and find the best deals, while making educated transactions about their products of interest.

"I am excited about being a part of something so new and fresh. Wigix is really changing the way we interact with a retail site and I look forward to sharing my knowledge in Wigix's Toddults and Bookworms communities," says Francine Levitov, a Wigix Category Expert and Bookworms Community Expert.

Continuing on the company's commitment to develop a unique and compelling online marketplace, Wigix's community networks will now allow members to join specific groups, gain product information and expertise through like-minded individuals, share photos and experiences, easily search for the products they are looking to buy or sell and develop an overall sense of community.

About Wigix

Wigix (www.wigix.com) is the world's first online stock market for consumer goods. Wigix uses NASDAQ-style trading along with community and social networking technologies to create a community-driven marketplace that not only delivers dramatically lowered costs and improved user experiences but also a vibrant community of passionate and informed collectors, owners, and traders who can all share in the success of the site. Wigix's catalog of over two million unique items is structured to allow buyers and sellers to easily find specific products and avoid the common problem of multiple listings that exist on other sites. Take a look at the uniqueness of Wigix's catalog at: www.wigix.com/index.php/item/detail/8911/Nintendo-span-stylecolor-de4e00bWii-b-span-Home-Console-Game-System

Wigix, Inc. was founded in 2007 by James Chong, a successful entrepreneur who also architected the online trading systems at Charles Schwab. In addition to Chong, Wigix's team includes co-founder Bob Lee (a former Charles Schwab colleague) and Albert Loh, along with other Internet and software veterans. Wigix is headquartered in Oakland, California, and also has operations in China.


SOURCE Wigix

Super Bowl Commercials

So we all watched an incredible game and some not so incredible Super Bowl commercials. But of course, there are always some bright spots.

My favorite one [careerbuilder.com]:



Have you seen this one on YouTube? It's Wigix's ad against eBay. Corny, but funny.

You Sell? They Match? Wigix Out Of Their Mind?

So I was checking my email last week. Oh, Happy New Year's btw. I got an interesting email about a cool contest Wigix is running. They are matching all sales for the top 3 sellers. That is pretty amazing. This should help them get a whole load of new sellers. Wish everyone the best for 2009.