[Hack]

I was recently in a discusion with some friends of mine and we were discussing a business idea that was somewhat seriously being considered. What the concept involves is and alternate to the infamous EBAY and the terrible rates and fees that they now charge as well as the double dipping that they do with the sister company Paypal.

It was proposed that an internet auction start up could be had that would try to take some of the pie away from Ebay. While it was also mentioned that there are currently a few of these websites around, we all wondered if there was room for 1 more and if so, what features would be needed to attact new users?

Input and comments would be appreciated.

Thanks

[jasoncelia]

I agree EBay has become too expensive and PayPal’s rules on getting your money back, or fighting a claim against you is at the very least immoral.

After saying that, Ebay’s market exposure makes it very hard to beat or even for you to make any meaningful dent in its trade. EBay does seem to be moving more towards shops and the person that just wants to sell the old bits is being left in the cold. I don’t know if that is a market left open. Another market EBay may have left open is an auction/sale site to allow charities to advertise themselves and be able sell/auction items to raise money.

You would have to team up with a payment clearing house (like PayPal, but not them) and if you could get a very big name that would help.

I don’t know if this helps or if this is what you wanted to hear. My advice would be for now save your money, and sit back and watch for an opening in the market or the downfall of EBay (which will come).

[Switcher]

I was recently in a discusion with some friends of mine and we were discussing a business idea that was somewhat seriously being considered. What the concept involves is and alternate to the infamous EBAY and the terrible rates and fees that they now charge as well as the double dipping that they do with the sister company Paypal.

It was proposed that an internet auction start up could be had that would try to take some of the pie away from Ebay. While it was also mentioned that there are currently a few of these websites around, we all wondered if there was room for 1 more and if so, what features would be needed to attact new users?

Input and comments would be appreciated.

Thanks

Like this ( http://cncauction.com/ )?

Did you know ebay has a Free Classified site ( www.kijiji.com )? If you already knew that your prob. the 4th person , they don't have a lot listed yet, then again it was launched about 6 months ago.

Related Free Classified story.
http://www.auctionbytes.com/cab/abn/y05/m03/i08/s00

what features would be needed to attact new users?

Make it free for users.
Make your money from advertising (like google, etc...).







.

[Hack]

We looked at some of the rates that ebay has and it was quite confusing to us. Not that we couldn't figure them out, but just to complicated. The fee schedule that we discussed were:

Free Basic listings.

Minimal cost for featured or ugrade listings

Very basic fees for store owners like a basic monthly rate based on # of items in store such as $5 per month up to 50 items, $15 up to 250 item and $25 above 250 items - Store owners would also be eligible for discount on selling fees if assessed. There would be additional charges for featured listings as mentioned above.

Free listings for Non profit Organizations. Must be registered as a Not for profit company - no comissions on sales.

Multiple pictures (suy up to 5) per listing then minor fees above this quantity (bandwidth does cost money and image files can take up alot)

Classified ads with minimal costs - if any.

Keep in mind it does take revenue to run a company, so everything cannot be free.

Fees on sales to be determined but will be about 2%.

We had discussed banners, but would like to keep that annoyance to a minimum

We would keep paypal only because many people use them currently, but would provide 1 or 2 altenatives.

The fees on real estate for ebay is killer with up to $300+ insertion fees wow.

Can't quite understand that.

Dan

[jasoncelia]

I have always said the way to make vast amount of money via the Internet, is not to sell products, but charge pennies for a service for the Internet masses.

The problem is finding the service, be it a new idea or a market that still has the space to take another player. I personally would not put my money in to EBay type business.

Sorry.

[Switcher]

I've seen a few ebay (like) sites, that still use PayPal, I know the masses use PayPal, I find it funny that all the new auction sites allow their traffic to filter down to PayPal (you do realize , Ebay owns PayPal?).

How can you compeat, while putting money in the competitions pocket, I'm sure your goal is not to be larger than Ebay.

Think of it like this, you know those lame late night TV commercials, the car lot that owns the bank, they can qulify anyone for a car, they own the bank. Well, ebay owns the bank (PayPal) they hit your pocket on the way in, & on the way out.

The problem with Ebay isn't the fees on just Ebay, it's also the cost of PayPal, You said it yourself

Keep in mind it does take revenue to run a company, so everything cannot be free.

so If you use PayPal your putting your money into Ebay (not your new auction site)

Your goal should be keeping revenue without PayPal as a middle man, I don't have the answer on how you can go about being the bank (If I did, I would do it).

Ebay was very smart when they bought PayPal, they keep the money (fees)!



.

[daedalus]

good luck to you, but to be honest i cant imagine anyone taking a sizable portion of ebays trade, they have almost complete market saturation in europe and US, and they have a hell of a lot of advertising going on.

There are some paypal alternatives around, but they all suffer from the same problem, massive fraud rates. Thats why paypal take your money back so often, they have massive fraud losses and wouldnt be in buisness if they didnt. Quite a few others are just as bad, others such as western union dont offer any kind of buyer protection.

If someone did a better paypal service that would be great, its not technically a bank, so has little industry regulation to deal with. That said its not something you could set up cheaply. Unfortunately the better you protect against fraud, the harder you make it for your customers to sign up.

[Switcher]

Hack,

I'm not trying to discourage your idea of starting your auction site, it's a good idea, & needs to be done, it would be a lot of work.

Something you might add to your list of ideas, what about adding video instead of photos, I'm not sure about the rules on www.youtube.com , maybe you could use youtube to host the video?

I think most folks can capture video with a cell phone, or digital camera.

Myself, I would much rather see the actual item up for bid, than a scraped image from the internet. A lot of items up for bid on ebay, don't have an image of what your actually bidding on, I think a video might help sell items.

Just a thought.


Anyone know If you can add video to ebay?


.

[Hack]

I could really see the benefits of video, and like you say, it is so easy now with so many having phones and digital cameras with the capability.

We had discussed using Paypal strictly due to the number of people with paypal accounts that are already established, but agree that this would not be good to give money to the competition like that. Ideally you are right, perhaps a completely free auction site and make money on the payment processing. Heck credit card are what 3 to 5%. That could become a healthy sum of cash.

Another thing that we are cosidering is more of a reverse auction for goods and services. Again here is the concept of a potential niche market with no need to pad ebays pockets.

Keep the ideas coming.

Thanks.

[Hack]

Did a little research and have decided, that perhaps competing against Ebay is a path that would be very difficult to travel. That being said, alot can be learned by listening to disgruntled Ebay users. This information could be very helpfull in keeping a new startup or potential start up from making the same mistakes.

Some of the biggest complaints that i read regarding Ebay are:

Fees - they are to high and are continueing to rise

Feedback - to little space to leave meaningful feedback, poeple using negative feedback for the wrong reasons, and lack of ways for a person to respond to negative feedback and explain thier position.

Dispute Resolution - Very little help here from Ebay.

So of the 3 items above, one and two seem easy to fix, but how about the third? How to make that better when considering a new site?

Any other major concerns about Ebay or Ebay like sites that I am missing?

Some of my thoughts on fees: Fees shoouldn't be based on a listing fee, etc. It should be based on a service. When someone benefits from a service, that is when they should pay. Just listing someting does not help someone. Selling it does. Makes paying for the service much easier. True?
So no listing fee, just a final value fee. Extras such as featured listings may cost more, because then you are paying to get your listing noticed, again, you are benefitting (suposedly) from a service.

Feedback. Allow both parties equal space to post coments. Close that out after a certain period so that it does not drag on forever.

Comments?

Thanks Dan

[HayTay]

Hack, et al,

Just a thought, you may be going about this backwards. What you may want to do is try to compute the cost per day/week/month of running a site similar to eBay. When you're over that shock, you can then start looking at pricing structures and the volume levels required to cover the expenses along with whatever profit percentage you feel is needed.

Bandwidth, redundant servers, networking equipment, software licensing, web designers, programmers, lawyers, tech support, fees, lawyers, mediators, personnel, lawyers, accountants , etc., etc., etc. expenses are hard to pay for with free listings. Oh, and I think I forgot to mention lawyers? And then there's the three BIGGEST expenses for almost every successful internet only business; ADVERTISING, ADVERTISING & ADVERTISING.

Can you get a hold of financial statements for eBay? You need to do some serious ratio analysis on their numbers to get a better grasp of what you're up against.

You'd have to get your site volume up to a certain level before you can start attracting advertisers and their $$$.

Maybe you can consider some kind of flat 'Insertion Fee' along with a tiered flat 'Final Value Fee' structure that is reasonable and easier to compute. One thing that is annoying is having to pay the full percentage structure fees for a high dollar buy-it-now item. Yes, I realize that you are taking advantage of the eBay marketplace but eBay isn't really doing anything to earn the extra 1.5% via it's auction service enabling the price to be bid up. If I list an item for $50,000 vs. $100,000 via buy-it-now why should eBay earn an additional 1.5% of the $50,000 difference ($750)? They didn't really do anything more for the $100,000 sale than the did for the $50,000 sale, did they?

Another thing that really frosts me at eBay is their pricing structure is set up to facilitate the exorbitant shipping/handling cost scam/workaround. I would rather pay "fair market value" for an item and reasonable S/H costs than $0.01 for the item and $69.99 for S/H. It may come out to the same amount but psychologically I like the first scenario better. What really sets me off are items that are sold for FMV then still have totally outrageous S/H amounts attached.


Just some of my 2 cents. I'll stop before you get the whole $1's worth,

[Switcher]

I still say, the way to make money on the internet is to give free content (auctions), look at Google ( www.google.com ) or craigslist ( http://www.craigslist.org ), both give free content to the internet surfer, yet both make a lot of money doing it!

Also Ebay didn't start out earning millions in ca$h (it takes time).



.

[Zumba]

I'd rather sell a product for $500 on ebay and pay $35 or whatever in fees than sell it at $350 with no fees.

That's the reason why ebay is really the only player. It's got the audience.

[Switcher]

I'd rather sell a product for $500 with no fees, than sell it on Ebay for $500 with $35 in fees.

Ebay has the biggest stake in online auctions because they got in the game back in 1995. Ebay started small just like everyone else, the way they boost the traffic is by buying out other sites like http://www.stumbleupon.com/ , Ebay bought them for $75 million. Stumbleupon has approx. 2.3 million users.
Business is business, look at what all the big dogs are doing to make money, I'm a huge Google fan, a company worth billions that doesn't pay a penny for advertising.

I think any site could mimic googles business plan, no matter If your selling advertising or auctions, get creative, take a little from each of the best sites.


.

[Hack]

Well this auction thing is quite intriguing after i have done so many hours of research that my head is spinning since my last post. Couple of things that I have decided.

1. Ebay and it's competitors have absorbed a very substantial percentage of the marketplace whn it comes to the auction world. Breaking in to this market would be very difficult without a substantial financial backing.

2. The online auction business model is very sound and it does a good job at providing 2 things. A place for sellers to sell unwanted goods or to sell services. And secondly is provides savvy buyers with a place to buy goods that are at times priced penny on the dollars.

3. There are niche auction sites that are booming regardless of the competition from Ebay and others.

4. Several of the above mentioned websites have Pissed there customers off with hgh fees and poor service.

These are going to be the basis of my new website.

So the next steps are (please keep in mind that I am not going to bore you with all of the stuff like forming this or that corporation, etc. just the interesting stuff):

1. Identify the correct software to use (probably a combination of out of the box and custom programming)
2. I need some business logo work done to use as a header on the website, business cards, stationary, etc. Can any one recommend a good direction to go with this? I can either go local or online.
3. Site will be going in a few weeks with only barebones features. Site will be 100% free during customization of the site, yet will be fully functional. the goal is to attract enough users to provide good solid feedback on what type of features they will want to see and use.
4. For larger purchases, I am looking at 3rd party escrow services. Is this a good option? Input would be appreciated.

Keep you posted as things develop.

Dan

[Hack]

Well after a few months of trial and error, programming, etc, etc I now have a site that is presentable to the public for viewing. While it is still in the development stages it is functional (with some bugs of course) and I am inviting all to try it and see what you think. I would appreciate any feedback that you have and also suggestions as to how the site can be improved. It is free to try (I am offering a 30 day free subscription) until the bugs are worked out and the site is a little more finished.

Please take a look and feel free to test drive it at any time.

www.mfgoptions.com

Thank you

Dan