Saturday, May 17, 2008
Three New 'Haggle' Marketplaces Hope to Unseat eBay
By Ina Steiner
May 18, 2008
Three new entrants in the ecommerce space have rejected eBay's auction model in favor of systems that encourage haggling between buyers and sellers. And while the three sites take very different approaches, they all offer low fees and social networking components that are built in from the beginning.
Fididel actually introduces a middle-person into its ecommerce model - real-life human negotiators typing live at their keyboards. Flippid is more like a traditional bulletin board, letting buyers and sellers create and browse "BuyOff" and "SellOff" postings. Wigix takes an approach it likens to NASDAQ stock trading.
Flippid lets sellers offer a variety of payment methods, including PayPal. However, Wigix and Fididel both use PayPal exclusively. I wonder if that gives eBay proprietary competitive information and an immediate knowledge of when and if these sites gain traction.
Wigix is going after eBay sellers, but Amazon.com may also be worried about this upstart marketplace. While perfectly suited for consumer goods, at this point Wigix seems less suited for antiques and unique collectibles. Whether it's intentional or not, certain features of the site strike me as drawing in the type of shopper who might scorn malls and boutiques, but feel comfortable on Wigix and view it as a form of entertainment - even without buying or selling a thing.
Wigix encourages you put all the "stuff" you own as a consumer into your portfolio. Like stock, you can calculate the value of your portfolio. You can choose to make your portfolio of products public or private. If you want to buy more stuff, you find the item on Wigix and look through the list of sellers, their descriptions (which are not detailed and contain no photos), and make a purchase. Or, like the stock market, you can make an open buy order. "I"ll buy this model of Nintendo Wii for $50," and you can put an expiration date or leave the offer good til cancelled.
In addition, you can choose to get notified when someone is interested in buying the items you own in your portfolio but haven't listed for sale.
Wigix uses a catalog approach, creating only one entry per product (or "SKU"), then hanging seller information off of each product. While it may seem strange for sellers used to eBay's approach, the structured data of the catalog approach gives shoppers a lot of flexibility in how they search for and sort listings.
Each product SKU has its own permanent URL, an interesting concept that may prove useful to both buyers and sellers in the long term. Wigix actually encourages sellers to embed Wigix URLs in their listings on other marketplaces. But of course, the URL is not your individual item - it links to the product listing that shows all of the sellers of that item.
Wigix gave me a demo of the tool it is preparing for eBay sellers that allows them to import inventory and that is scheduled to be ready in July. It looks like it may take a lot of upfront work for sellers to translate eBay listings into Wigix listings - but I'll reserve judgement until the tool rolls out.
Revenue-Generating Opportunities Beyond Selling
Wigix has ways you can earn revenue without actually selling any products. Because Wigix relies so heavily on product attributes for its catalog (think "Item Specifics," such as color, size, make and model), it needs experts to help it build the catalog and add appropriate attributes for each product.
In a concept called "homesteading," you can add items to the catalog, and if approved by the Category Expert, you will earn 5% of the Wigix revenue for each sale of that item.
"Category Experts" earn 1% of their total category's revenue (advertising and transaction fees) in return for keeping the category accurate. You must apply to be considered for the position of Category Expert, and experts must be "reelected" each year.
Wigix also has rewards for referring friends and has "Golden Items" to encourage users to browse the site. You can read all the details on the "Make Money" section of the website.
Fididel uses real-time negotiation. But rather than straight automation, the site uses real people to negotiate on behalf of its sellers. Shoppers can search the site for products they're interested in and immediately begin negotiating on price. Buyers can engage the seller or a "Fidideler" on any product. Fididelers are trained to negotiate on behalf of sellers and receive a commission based on final selling price. Either party can walk away from the negotiations at any time.
There are no listing fees for sellers. The seller sets the commission amount, either a flat-rate commission, or structured as an incentive plan for the Fidideler. The company said sellers would likely want to offer more commission as an incentive to the Fidideler to drive the product price as high as possible. Founder Hal Wendel compared the process to sellers hiring a sales force. "Using Fididelers is the only way a seller can scale on real-time negotiations," he said.
It's a little frustrating that there isn't more information on Fididel about how the site works and how to become a Fidideler, but like Wigix, the site is in beta and is a work in progress.
Flippid lets users create BuyOffs and SellOffs in a model similar to Wigix. Flippid also uses wish lists and want lists that can be incorporated into social networking sites and will soon be completely free.
We have published a separate review of Flippid in this issue - assigned before the launch of Wigix and Fididel (http://www.auctionbytes.com/cab/abu/y208/m05/abu0215/s03).
Appealing to Buyers
As experienced sellers know, a marketplace must draw in buyers in order for it to be a viable venue on which to sell. Each of these three new marketplaces hopes to lure buyers with features that engage and entertain, including through the use of social networking features.
Wigix is a sticky site - you can spend a lot of time doing research and building your "portfolio." Fididel, on the other hand, hopes the excitement of real-time negotiation will draw buyers to its site.
It's too soon to say whether these three sites will succeed in drawing enough traffic and interest from buyers to become viable marketplaces. But sellers are sure to appreciate the hope these sites hold out to them to re-ignite buyer interest and generate sales!
About the author:
Ina Steiner is Editor of AuctionBytes.com and author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). She has a background in marketing and research in the high-tech and publishing fields. If you have story ideas, comments or questions, send them to firstname.lastname@example.org.
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