On the shopping comparison engines, feedback has become one of many important factors for consumers looking for a good deal. These sites are no longer just price comparison engines as many people sort by price and then don’t buy from the cheapest merchant but rather from the cheapest merchant with the highest rating. Shopping.com and Shopzilla even highlight these merchants calling them ‘Smart Buy’ and ‘Smart Choice’ (respectively). In this way, feedback plays a crucial role in increasing clickthrough rate and hopefully conversion rate for a site. And that’s what it’s all about…driving buyers (not just leads) to the merchants.
What else punches up clickthrough rate and conversion rate? Adding a phone number, a logo (NexTag finally jumped on board with this option), and a special offer/coupon are just some of the options shopping engines push.
But there’s still an issue of trust. As seen with the PriceRitePhoto scandal, good feedback is not enough. A merchant is only as good as his last sale.
That’s why buySAFE and similar security services from SquareTrade and Paypal make so much sense. We’ll get to the official interview with buySAFE in a minute, but here is buySAFE in MY OWN WORDS: Shopping with Confidence. As a consumer, I know that if I go through a buySAFE bonded merchant my transaction is basically guaranteed.
buySAFE is fairly well known in the eBay and Overstock universe. Sellers apply to become a bonded merchant, go through a review process, and if approved, the company then gets to display the buySAFE seal and every transaction is bonded. The seller then pays buySAFE 1% of the final sale price of every auction. Ok, so what do you get from buySAFE?
According to the company, bonded items have final sales prices above those of non-bonded items and bonded items outsell non-bonded items. Here are some recent stats from the buySAFE:
-In addition to impressive aggregate results that show, on average, 3-4% higher conversion (sell-through) rates and 2-3% higher pricing, the Jewelry & Watches category has delivered fantastic results for Bonded Sellers. In comparing sales of Bonded Jewelry Items against non-bonded Jewelry items, we saw an increase of 5% in average sales price [The data included over 40,000 transactions with sale prices ranging from $4.99 to $49,999 between October and mid-January).
-On Overstock.com Auctions, one Trusted Merchant (to be a Trusted Merchant, the merchant must be bonded with buySAFE) who sells CDs and DVDs saw very impressive results after comparing his November sales for Bonded Items against those for non-bonded items. His comparison showed the following:
Average sale price for Bonded Auction Items was 15% higher than non-bonded
Overall sell-through rate for Bonded Items was 29% higher than non-bonded
Most outstanding, total sales were 39% higher when items were bonded
[The sample size for this comparison was 18,436 Bonded Items and 18,383 non-bonded items. The time period was 11/2/05 – 12/1/05.]
I’ve run into the buySAFE team over the last year at a number of conferences, but as the company has been focusing exclusively on the auction market, it took me a while to put buySAFE’s service and shopping comparison engines together. At this point, though, I think it would be a wise for the comparison engines to partner with buySAFE and offer the bonded service as another way to increase clickthrough and conversion rates. This would be especially useful for the small, non-brand name businesses who make up the majority of the merhcants on the shopping enignes, but probably a minority of all clickthroughs.
Here’s my interview with Robert Caskey, Sr. Director of Buyer Marketing, buySAFE:
What is buySAFE?
“buySAFE exists to help merchants turn shoppers into buyers by making them comfortable buying from sellers that they do not know. Merchants who meet our selling criteria and pass the buySAFE Business Inspection get to include the buySAFE Seal in their listings, which signals that they are a trustworthy, reliable, reputable seller. When someone makes a purchase [through a bonded merchant], that person gets a surety bond which makes the transaction virtually risk-free.” [Editor’s Note: A surety bond is a straightforward three-way agreement with a surety company guaranteeing that an individual or company (the bond principal) will do exactly what it commits to its customer (the obligee). If the bonded individual or company does not fulfill its obligations (i.e, meet the terms and conditions disclosed at the time of purchase), the surety company will compensate the customer for the loss.]
“There’s a trust problem in buying online as users just have ‘feedback’ to work off of. We think the third party endorsement separates us from others. Once you see the item is bonded, you know you’ll be buying from a reliable, trustworthy merchant who has passed a rigorous inspection process and is continuously monitored. If a problem does happen to arise, you know you’ll be made whole through the guarantee. While feedback can tell you about a seller’s past performance, it can’t necessarily predict what will happen in the future, nor can it guarantee a smooth, risk-free transaction. In contrast, the buySAFE Seal in a seller’s listing signals a strong reputation and a guarantee that the transaction will go smoothly.”
“Any seller can apply to become a bonded seller, but merchants must have minimum online sales of $1,000 per month. We also look at selling history, feedback score, verify identity and continually run a buySAFE business inspection to check out all aspects of the company’s financial well being. We make sure they are legitimate sellers who will deliver on the promises they make to their buyers.”
How does buySAFE make money?
“We typically take 1% of the final sale price.”
What is buySAFEshopping.com?
“buySAFEshopping is a site that aggregates all the buySAFE bonded listings on eBay, Overstock, and TIAS (antiques). Any seller who has a bonded listing will appear on buySAFEshopping.”
“The total number of bonded items on the site stands around 2m; we’ve doubled the number of bonded items in the last 4 to 5 months. We launched the current version of the site in November. The site is meant to garner additional traffic to listings of bonded items. It’s a stand alone environment where people can go and trust that their purchases are secure.”
Are you trying to be a shopping comparison engine with buySAFEshopping?
“We plan to make our service available to individual merchant Web sites (outside of eBay, Overstock and TIAS). This will allow us to include these merchants’ listings on buySAFE Shopping, which will greatly expand our inventory and allow for more of a SKU-based comparison like you see with Shopping.com and others.”
Are you driving traffic to buySAFEshopping?
“We’re beginning to devote resources to the site and experimenting with paid search. We’ve introduce a loyalty program [Smart Buyers Club] where shoppers earn points towards discounts and merchandise for making bonded purchases. There’s been quite a bit of PR around buySAFEshopping in major consumer publications as people are starting to recognize that this is a unique site where purchases are guaranteed and safe.”
buySAFE news from AuctionBytes