Thursday, September 02, 2010

Strange New Marketplace World

This has been an interesting year in the online marketplace space. We've had a flurry of acquisitions, increased investment, global expansion and even eBay seems to have settled into some form of stability.

All of this activity is good for online sellers and should give you all some hope that better things are ahead -- more viable places to sell means more opportunity to make a buck or two.

At Buy.com, we've had a very interesting year so far:
  • Our marketplace continues to be a huge growth story. We are having a phenomenal years by all measurements.
  • In June, we were acquired by Rakuten.com, the third largest ecommerce company in the world, and together with our sister companies Priceminister.com and LinkShare.com we plan to be a dominant force in global ecommerce.
  • We are expanding our marketplace to include sellers of all sizes. We still want to make sure you are a business, but we will open our doors to online sellers of all shapes and sizes before Q4. - This is a HUGE change for us. Now both large and small sellers will have access to Buy.com's 5 million unique monthly visitors and unique customer demographic of wealthy, highly educated but value conscience consumers.
  • We will "empower sellers"! - Check out the header on this blog; "empower sellers and get out of the way" is my mantra and I am finally going to be a part of a company where that is the goal.
This blog is all about my 15% (perspective) on ecommerce and I'm proud to work for a company that is making waves on the Internet and has global ambitions.

In the September issue of Internet Retailer Magazine you can get the inside scoop on our plans with the cover story called "Making their move". The man to the left, on the cover of the magazine, is our fearless CEO Neel Grover and together with Rakuten CEO Hiroshi Mikitani they are "Making their move"


There is a new model at Buy.com - courtesy of Internet Retailer Magazine

"At Buy.com, the new mantra since the acquisition by Rakuten has become: We help our marketplace merchants. Buy.com is modeling itself after Rakuten Ichiba, a massive Japanese marketplace operated by Rakuten that recorded $1.92 billion in revenue in the first half of 2010. Rakuten Ichiba gives retailers the freedom to design their web stores and not just pick from design templates, to offer rewards points on Rakuten purchases, and to use the customer's e-mail addresses for follow-up marketing, which is not the case on Amazon.

"On Amazon or eBay you feel like you're just listing your products on their marketplace," says Hiroshi Mikitani, Rakuten's founder, chairman and CEO. "We share the customer with our merchants."

While Rakuten does not have the scale of a Wal-Mart or Amazon, it's a growing international force in online marketplaces. Mikitani followed up his purchase of Buy.com by acquiring France's largest online marketplace, PriceMinister, and has closed deals to extend Rakuten's reach in China, Thailand and Taiwan. One indication of its global ambitions: All internal Rakuten meetings are conducted in English.

As its U.S. outpost, Buy.com will follow the Rakuten philosophy of promoting marketplace merchants. "We'll give sellers more flexibility on the site," says Neel Grover, CEO and president of Buy.com. "You'll see more of the merchant's brand on the site. Sellers will have more brand recognition throughout the site." (bold is mine)
The Buy.com Marketplace is a game changer and as Neel says in the quote above, "we will give sellers more flexibility on the site" We will make these moves in stages, starting with opening up our marketplace to more product categories and a great range of sellers from sole proprietors to IR 500 merchants.

Opening up the marketplace

"In another change, Buy.com, which has featured items from mostly larger merchants in the past, will open up its marketplace to more small and midsized merchants later this year, following the Rakuten Ichiba model.

"Rakuten is all about empowering merchants—regardless of their size," says Grover. "In Japan Rakuten's marketplace has large sellers like Wal-Mart and small sellers who sell products like quail eggs. They empower everyone, and that makes a great ecosystem. Since May, we've examined the way their business works and it has led us to reevaluate our current model of focusing on large sellers."
Another game changing move is distributing the Buy.com marketplace to other online retailers through a white-label program.

"Buy.com also recently announced another strategic shift: The retailer plans to white label its marketplace, enabling other web retailers to sell all or some of Buy.com marketplace's more than 7.5 million SKUs on their own sites late this year or early next year.

Two large bricks-and-mortar retailers plan to add the Buy.com marketplace offering to their sites, says Grover. Retailers tapping into the selection on Buy.com's marketplace will be able to control the look and feel of the marketplace, all the way to checkout, which will occur on the retailer's site, not at Buy.com. Buy.com and the retailer hosting the marketplace will both receive an undisclosed commission from each purchase from the marketplace retailer actually selling the merchandise.

"For a retailer with a lot of traffic that wants to sell things other than its current offerings, this can empower the retailers to offer consumers the full marketplace experience without having to do the five years of tech work that we've already put in," says Grover.

In strengthening its marketplace offering, Grover says he hopes to entice more sellers and buyers to look to Buy.com. "The marketplace is a really important part of our business and it has been an important part for the past five years," says Grover. "Going forward it will be a bigger and bigger part of our business."
Granted, I work at the place so I'm going to be a little more excited about all of the changes coming down the pike and my title is "Merchant Evangelist" so I'm prone to blowing things out of proportion, but can't you see the opportunity here? As I said earlier, we aren't going to roll out all of these changes at once and it may take some time to make the change-over complete but with Rakuten behind us and "empowering sellers" part of our mission, the future looks bright.

More to come as we roll out announcements ...

Just my 15%