posted on January 31, 2001 07:23:00 PM new
Good post Captn: What you didn't mention is what ebay calls a pre-tax 25% profit? For Meg and Pierre to get their options and perks not too mention the rest of the gang at ebay costs a lot of loot. Betcha that's included in their bottom line.
You're right. I think there are lessons to be learned from ebay and other sites that could be used to build a better site.
And I don't think anyone ever expects their to be any sort of consensus even if the co-op ever gets off the ground. Heck, there's not even consensus now and a few folks are already trying to back and frontally stab others!
But it's still a good idea and it really is feasable.
posted on January 31, 2001 07:31:22 PM new
Hello Canvid,
I won't be joining the discussion on Twinsoft's board. I have an extreme case of board fatigue. Heheh
But to be very candid about this discussion I simply don't see what is in it for me.
I collect telegraphic code books and other cryptologic materials. There is no way a co-op will attract the sellers of those items because no one can specialize in that type of material. The stuff just turns up out of the blue.
I sell tincrafts, specifically cookie cutters. Tinsmithing is a hobby for me and I give away as much as I sell. If selling tinware ever were to become my source of income then I would be looking to join a crafts co-operative and not an auction co-operative. My crafted items are more of a retail commodity than an auctionable item.
posted on January 31, 2001 08:06:43 PM new
A co-op sounds very appealing and interesting and I am sure a lot of sellers would go along with it, however where do we get the bidders? Isn't that why Gold's and Amazon failed? They had sellers, I used to sell on Amazon, for a short while it was okay, sold some stuff, made some money but it just kind of dried up, also posted some things on Gold's, no bids, same stuff I sold on ebay and Amazon, there just weren't any bidders to be found, the only thing Gold's seemed to have going for it was their chat rooms, they were always populated by the same people, day in day out, for months on end, and these same people seemed to be their only sellers and I think the only way they sold anything was to each other! Is that what would happen with a new Co-Op? How do you get the word out to the buyers? I think that would be the most difficult part, getting the buyers with the money & the interest.
posted on February 1, 2001 05:36:30 AM new
Of course salaries and expenses are counted against the pre-tax income. How much "monopoly salary profit" they make (as compared to how much members of a co-op management team would need to be paid is an interesting question. But I sincerely doubt even cutting this back would make that much of a difference in the fee structure. One reason they get "the big bucks" is because ebay has grown to a large organization, and if the co-op does similarly, you'll be paying large salaries to managers as well to manage a billion-dollar venture. Perhaps not as large, but I hope no one thinks we'll hire retail managers at $7.50/hour to run a hugely successful co-op (assuming it gets to be hugely successful).
Sometimes it appears that people think the "billionaires" were somehow paid their "billions" from the net income of ebay, which of course is not correct. They were made "billionaires" by the people willing to fork over huge sums of money for a share of ebay stock...
posted on February 1, 2001 06:56:56 AM new
One Buyers perspective.
As you build this co-op and when you start to list please bear in mind...I've been to other auction sites and the starting bids are ridiculously high. I understand why. Seller has to protect his/her investment, make a little profit and with no or little traffic inflates the starting bid to cover that...but that doesn't mean I as a buyer will want to bid on it. If I see something retail or close to retail, heck I'll go to the mall. I'll go out to an antique store. Unless I am going to save significant money, or it is a very unique item that I just MUST have this minute, I'm not gonna bid. So if your co-op sellers aren't willing to risk starting low so people can get a deal or at least the perception of a deal, then you may have a problem. I know that when I first started buying on Ebay I told everybody I met "wow I just got an X for only 5 bucks!" or "I just got an X I haven't seen one of those in 20 years!" and it was that excitement, I believe, that helped spread the word and made Ebay what it is today (not me personally of course, but me and thousands like me). I know that I am personally responsible for creating about 150 Ebay addicts.
I also realize this is a can of worms for sellers. If you start bid low, and you have low traffic, you could easily take a bath on your item. That sucks. But unless there is some perception on the buyers part that s/he "won" or "got a great deal" or got something verrra unique they would be willing to pay extra for, then the traffic won't come.
Again, my opinion only. Take what works for you and leave the rest.
posted on February 1, 2001 09:10:43 AM new
GV: Nice post. You're right. I don't think that having a stable auction platform that will eventually lower fees. As the site and traffic evolve I think you'll see most sellers be able to lower their start fees.
I personally think it's also about organization. Perhaps if there we're categories devoted to Dollar Deals and hot blow outs it would help.
I sell videos. Certain titles I'm happy to start at a dollar and sell for not much more. Other's are quite hard to find and there's a small market for them. I don't mind waiting to get my price for these items and I think a well run site will be able to offer rock'em sock'em auction sales with a place to find that hard to get product.
posted on February 1, 2001 01:05:45 PM newTwinsoft: "We're not out to beat eBay."
Maybe not, but in order to become a viable alternative you HAVE to convince a significant number of eBay's users to jump ship and come to your new site instead. And I'm not talking about sellers, either -- I'm talking BIDDERS!!! The number one problem with all the other auction sites, in my opinion, is that there simply aren't enough bidders to keep things going. I don't have a clue what the real numbers involved are, but I know that there HAS to be a significantly higher number of bidders than sellers for a site to succeed. After all, one seller can list 1000 different items for sale, but one bidder isn't going to bid on 1000 different items. And remember, there have to be enough bidders so that each item for sale has more than one person interested in buying it. As a guess, I'd say you probably need at least 1000 bidders for each seller, perhaps many more.
Which is to say that, sure, I think you could easily get 1,000 sellers to join up with your new co-op. But unless you can get another MILLION bidders to start buying there you are doomed to failure. And if you try to get 1 million bidders to jump ship from eBay, that's the same thing as trying to "beat" eBay whether you think so or not.
goodvibrations: You noticed that too, eh?
Regards,
Barry
---
The opinions expressed above are for comparison purposes only. Your mileage may vary....
[ edited by godzillatemple on Feb 1, 2001 01:07 PM ]
posted on February 1, 2001 01:21:48 PM new
Barry, of COURSE we're out to beat eBay! (Heh, heh. Not really.) We think we can bring both the sellers and the bidders. What we want to avoid is the mind-set that we need to be so huge that we can knock eBay out of the market on opening day. People are suggesting that we can't get off the ground without 10M in advertising funds alone.
As far as bidders go, I believe that there are people who are truly interested in going back to when auctions used to be fun. Now the whole process has been converted to scanning through tons of fixed-price crap in the "ending in 2 hours" category and it's just not fun any more. We think we can offer high quality stuff, and save a huge percent of the fees.
A break-away group of eBay sellers forming their own co-op is newsworthy. What happens when the news is published in the Wall St. Journal or mentioned a few times on MSNBC? We could be looking at more bidders than we know what to do with. In fact, much of our work must include planning so that we're not overwhelmed in that event. We are looking into all kinds of advertising options.
posted on February 1, 2001 01:41:56 PM new
I can see four scenarios in which a genuine competitor to eBay could come into existence:
(1) The owner of the site spends a few billion dollars on six months worth of inventory, so that the site can start out full of exciting stuff that he can afford to sell at break even or below, thus bringing in enough buyers to attract other sellers. To attract major sellers, such a deep-pockets enterprise might also pay sellers to list, or otherwise subsidize sales, to get things off to a strong start.
(2) A large number of specialty sites, each run by someone with enough of a reputation in her specialty to attract sellers & buyers of that type of item, merge or partner into one large site. (A related scenario woulfd involve RL auction houses coming together to create a joint web presence, but
(3) eBay overplays its hand as a monopoly, and the feds step in and break it up.
(4) eBay makes a strategic decision to re-structure itself into a Power-seller only site, or otherwise locks out the masses of small sellers.
I'd be delighted to be proven wrong, but I really can't see a seller's co-op starting off big enough to attract the critical mass of sellers & buyers to succeed. And the failures of so many small sites prove that you can't start small and grow. If you start small, you won't grow. And $100 multiplied by 10,000 sellers is still only a million bucks -- possibly enough to start another Gold's, but not enough to start out with enough crritical mass to keep going.
My recommendation would be:
(1) Focus on setting up specialty sites, either as co-ops or entrepreneurial busineses; or
(2) Look for a different business concept, rather than trying to duplicate eBay with improvements.
posted on February 1, 2001 02:21:06 PM new
There is no Free Lunch, how true...I have questions about this co-op idea.
Who is going to organize the co-op, and set up the legal charter necessary to operate?
Who is going to be responsible for setting up and maintaining the servers?
I sure wouldn't send a hundred dollars off to someone on a handshake deal and hope things work out. There are a lot of unanswered questions in all of this and if a Co-op is going to be formed then someone is going to have to take responsibility. Who will it be?
posted on February 1, 2001 02:56:26 PM newWhat happens when the news is published in the Wall St. Journal or mentioned a few times on MSNBC? We could be looking at more bidders than we know what to do with.
I think you are GREATLY overestimating the impact of earned media.
Moreover, even if media coverage does bring a few visitors, why would they come back.
Despite what Yahoo might claim, I don't believe that having a smaller selection is an advantage. If it were, then the way to draw the most bidders would be to have zero listings.
Sure, lower fees MIGHT lead to somewhat lower prices, but that didn't really happen at Yahoo. Moreover, even though the co-op's nominal listing fees might be lower, if you have to list something 3 or 4 times, then the cost per sale is likely to be higher.
And I'm really note sure how relevant the experiences of previous co-ops are because, in this case, you are basically trying to compete in a uniuqe monopolistic market.
I would be very interested to see if people buy the notion of a "critical mass" -- a number of listings that is the minimum that will attract a steady base of bidders. If so, what do you think that number might be? (From stories about Yahoo, it appears that they believe this number is around 1 million auctions...)
posted on February 1, 2001 02:58:05 PM new
Hi All,
Any $100.00 sent would be put in a trust account until and if a co-op was to come to be. And that would only happen after the folks who sent in their $100.00 ratified a charter.
Just be careful as once this co-op started there's been a lot of talk and it looks like there will be more than one group starting up.
