Monday, January 19, 2009

UPDATE: Everyone Wants to be an Online Marketplace.

The King of all online marketplaces (eBay) is wounded, so it makes sense that competition would rise up to take some of their business away, but when GoDaddy.com announces they will be launching a marketplace, it is getting ridiculous.

GoDaddy.com has lots of traffic, roughly 3 million uniques a month, but how much of that traffic is going to GoDaddy for anything other than domain names and related services. There are some serious issues to consider:
  • How are they going to get product? Just saying you have 3 million unique visitors each month and throwing a 10% FVF on each sale isn't going to entice sellers to sell on the platform.
  • Perhaps they can bring on related product that would make sense to their current user base. GoDaddy users are tech oriented and dominated by males, just look at the GoDaddy.com ads at the Super Bowl in two weeks to identify who their market is.
  • A marketplace needs much more than traffic. They would be much better off selling sponsored links and advertising to online sellers than to facilitate the sale of real product on their site. 
  • If they do not get to a critical mass of product selection, users will just pass over the marketplace.
  • Online merchants want to get eyeballs in front of their items, but they have limited resources so dealing with another  marketplace with dubious credentials for selling product won't be high on their list.
  • Competing with the "Big 2"; eBay and Amazon and the "Little 2"; Buy.com and Overstock not to mention all the specialty sites doesn't make much sense to me.
I haven't seen their marketplace yet, so I won't call this effort "dead on arrival", but they have a huge hill to climb before the GoDaddy marketplace is viable.

UPDATE: Okay, here is a link to their marketplace http://shops.godaddy.com

Just my 15%

20 comments:

2010 or Bust! said...

Just a little funny (I think)and unrelated observation: The listing for the eBay Daily Deal for today has been removed by eBay.

The link is still on the Deals page for the 32" LCD. Even when those Daily Deal listings are sold out, the actually listing stays up, like a normal listing. So somethings is up.

http://pages.ebay.com/deals/

Randy Smythe said...

I think it was just another glitch. It is now back up.

ms.pat said...

Just how many companies does it take to sell an iPod. I just got one myself...direct from Apple. If that's what godaddy is going to do then I think they'll be spinning their wheels.

Cliff Aliperti said...

Yeah, I thought this was funny too.

Seriously, there are only so many buyers and sellers, 2009 could really be the year we spread ourselves too thin if some of these marketplaces don't go away.

Who knows, GoDaddy could be the one to catch on, sure I'm not saying it's not worth the effort, but I am saying I think we're starting to get too many choices. Hopefully buyers make a clear statement of where they want to spend $$ in '09.

Thanks Randy!
Cliff

Randy Smythe said...

Cliff,

Most likely the sites that will have success are sites that already have buyers of product.

GoDaddy is starting from scratch with zero product.

In Bonanzle's case they have plenty of product and soon the buyer's will come.

In eBay, Amazon, Buy and Overstock's case they already have users who come to their site to buy product.

Anonymous said...

And I think Auctiva is starting a site this month, and then sometime this year that antique site (GoWorth?) is going to launch. Yikes!

Randy Smythe said...

Everyone wants to chip away at the king.

There will always be room for niche sites but with 4 big marketplaces already eBay, Amazon, Overstock and Buy representing nearly 160 million unique visitors a month it will be tough for broad based marketplaces to get any traction.

The exception to that in my view is Bonanzle because they are a niche site with lots of variety.

Anonymous said...

But you know, Randy, Ebay set all this in motion. Without the massive changes they made in 2008, many of these sites would have never been formed.

They've diluted their own market share immensely with so many sellers defecting and diversifying.

Randy Smythe said...

Yep, that is why they are no longer the King of the Marketplaces. Not only did they get a direct challenge from Amazon but all of these little niche sites started to draw a little blood.

Etsy, Bonanzle, ebid, ecrater all got a nice start because of eBay's policies.

"Death by one thousand cuts" who knows that number may one-day be literal.

Anonymous said...

Randy,
I really appreciate your blog and the information you provide. I am just a small seller at this point, but 2009 is the year I expand my online sales. I already have an eBay store and a booth at Bonanzle and recently listed books on Amazon. I am researching which platforms will be the best for my products as well as expanding my product lines.
Auctiva, the listing, photo hosting and payment software I use for my eBay store is also opening stores. Auctiva is spending so much time on their stores that there have been an avalanche of listing and payment problems in the last month. And their customer service is terribly lacking.
Just thought I would pass that along since the other comment didn't go into that side of thing. Thanks again for your blog.

Bill said...

While it's true that the GoDaddy marketplace looks pretty doomed (and I'm tempted to include the Auctiva one as well, but we shall see), I'm not too worried about it -- there have always been more marketplaces than necessary, as the Powersellers Unite auction site count (http://www.powersellersunite.com/auctionsitewatch.php) can attest.

If I were a seller, I'd probably have some items on eBay, some on an alternative or two (I hear that Bonanzle one is pretty snappy), and all on my own web site. There is definitely a point of diminishing returns, and new marketplaces like this GoDaddy one, that are starting at 0 mph and adding nothing novel, are in my estimation, beyond that point.

Remember: even Microsoft (Expo) and Yahoo (Auctions) have failed at creating marketplaces. I think it's perfectly reasonable that some other big-ish companies could be tempted to repeat those same mistakes.

Bill

Anonymous said...

Randy,
You said "Death by one thousand cuts" do you write on auctionbytes blog under the name ming the merciless?

Randy Smythe said...

Anonymous,

Come on now. I always comment as myself. I've been using "Death by one thousand cuts" or "Death by 1,00 blows" for 2 years.

But your comment did make me smile.

Renagades Relics said...

Great info as always!
I must fully agree with Bills comments. Using eBay for auctions and one or two alternative sites such as Bonanzle or Esty seems to be the way to go forward in 2009.
Of course, having your own site is and added plus.
Will Go Daddy make it? Doubtful. But stranger things have happened.

Anonymous said...

"In Bonanzle's case they have plenty of product and soon the buyer's will come."

I am really not understanding this Randy. You sell on Amazon with decent volume, and at one time were a very high volume business on eBay. There is a new marketplace with better fees than Amazon or eBay, has a little bit of cash for advertising, and one of the best infrastructures of any company south of Google, yet you tout Bonanzle as being the better? Seriously, have you ever seen a better ad machine for any internet based company than Go Daddy? Go Daddy could put Candace or Danica on an ad for cow pies and get a million hits.

Who has heard of Bonanzle? About 20,000 worldwide. Who has heard of GoDaddy... Anyone within earshot of a TV during any sporting event. It doesn't surprise me that the Bonanzle folks run in to give their 2 cents, because they have to fight another big company. Did I forget to mention that Go Daddy has over 5 million users that receive promotional emails by default with their accounts? Bonanzle has less than 20K, leaving them lower than many boxed script marketplaces.

I really just have to disagree. Go Daddy has more of a chance than the hundreds of other sites that are trying to get a few eBayers to join by purely name recognition. They don't venture out much into other areas, so by them putting the work into this I can't imagine them being anything less than fully prepared for whatever it takes to compete with Amazon or eBay by the full launch date.

Randy Smythe said...

Anonymous,

I am not comparing Bonanzle to GoDaddy. Sorry for the confusion.

Bonanzle is a niche business that is for unique and hard-to-find business. I would tout the growth and potential of Bonanazle regardless of what GoDaddy does.

Bonanzle is for small sellers and gives them an option instead of eBay.

GoDaddy, is a traffic generator for sure, but it takes more than traffic to make a marketplace and GoDaddy will try and go head-to- head with Amazon and eBay.

If there is limited product on the GoDaddy marketplace or there is spotty selection then buyers won't consider it a viable option.

The traffic going there is very male and tech centered so a sellers selling women's shoes will probably wait to add their product.

Traffic is just one part of the equation. I could be wrong though.

Anonymous said...

Nobody so far has had the coconuts to badmouth ebay in a widely broadcast ad. Nobody. That's the wildcard.

If GoDaddy puts up a SuperBowl ad that says: "Sick of Ebay?" it could trigger a visitor avalanche. But they'd better "come correct" and that means auctions. My understanding is GD will just be stores.

But OTOH if Yahoo weaseled out of their agreement with ebay and relaunched auctions, they would have 2B by year's end.

They've already got the infrastructure and the user accounts. I'd gladly go back. They just need to throw the switch.

Would you Yahoo?

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