The buySAFE Revolution – 2007

by Brian Smith, on January 4th, 2007

I’ve been mulling over my initial post of 2007 as I think it sets the tone for the year (ok, maybe just for the week, but still…). Over the next month, I’ll review holiday shopping numbers for the shopping comparison engines and profile a bunch of players in the shopping ecosystem.

But I’ve decided to dedicate my first post of the year to buySAFE. eBay sellers know of buySAFE, but if buySAFE executes correctly, this company has the potential to become a major player in the ecommerce world by the 2007 holiday season. It’s not going to be an easy feat, but the company has already established the foundation for success.

For those of you who don’t know buySAFE, read this introduction and this follow up. In a nutshell, buySAFE guarantees ecommerce transactions, allowing consumers to buy with confidence (which I think should be the company’s tagline).

Over the last year, buySAFE has started to swim out of the relatively calm auction seas and into the rough oceans of website bonding. In the future, consumers will be able to go to Evogear, FlyingPeas, Froth Au Lait, A&E Security, ThrillingAudio, Dive Rite Express, Compasseco, Shortporch, or any of the estimated 250,000 non-eBay/Amazon Marketplace ecommerce sites and choose to bond their transactions during or post check out. If you’re BestBuy or Amazon or Tommy Hillfiger, you could care less. If you’re a lesser known small or medium sized business (which 98% of etailers are), though, the bonding service could significantly improve your store’s conversion rate and average order size. The company’s data for auctions demonstrates this – click on the links on this page or read this press release for more information.

Now the problem for buySAFE is that being one of the cool kids on the eBay block doesn’t mean much off of eBay. Running a big marketing plan targeting small businesses is possible, but those pesky small businesses are notoriously hard to reach. So what does the company do? It closes a business development deal or 3. Last June, the company announced its website bonding program and signed its first ecommerce partner, Zoovy. The idea is that it’s much easier to use the power of an ecommerce solution provider (aggregator) than go after individual etailers. Unfortunately, I can’t even find buySAFE mentioned on Zoovy’s site at this point. Ok, buySAFE is there, but hidden among a slew of partners.


Just a couple weeks ago, buySAFE announced its second bizdev partnership, this time with MIVA. A lot of readers know MIVA as the former FindWhat PPC network, but MIVA is also a powerhouse in the ecommerce solution market with it’s small business services. Assuming MIVA promotes buySAFE to its merchants, we could potentially see the buySAFE seal showing up on thousands of merchant sites. Beta testing begins soon.

Today buySAFE announced a partnership with Cart32. While you may never have heard of Cart32, it’s another powerhouse (there are players besides Yahoo! Stores and ProStores) in the ecommerce solutions market. This deal, like the MIVA and Zoovy deals allow for simple integration of buySAFE merchant bonding. While I haven’t seen screenshots of the process, I’d assume a merchant just opts into the program, gets reviewed by buySAFE and if approved, the bonding option is displayed at checkout.

As for who pays for what, buySAFE is known in the auction universe for charging 1% of sale price. In the off eBay world, bonding is displayed as an option during the checkout (the buyer pays) and the revenue is split among the commerce provider, the etailer, and buySAFE. I’m not sure of the specific rev share amounts at this point.

So let’s say that some of these Beta tests work out and average order size and conversion rate increase for off-auction merchants just as those numbers did for auction sellers. buySAFE quickly gains momentum as its commerce partners push the service more and additional partnerships are struck. So now 1000s of merchants offer bonded transactions.

buysafe website bonding api
buySAFE website bonding API in use on Carter’s Fine Jewelry.

Well, now the API that buySAFE announced back in October comes into play. The shopping comparison engines could now layer the buySAFE program on top of it’s merchant listings to increase conversion rates (they could probably even charge merchants an extra couple cents per click to display the buySAFE logo) – I’ve been waiting for the Shopping.com buySAFE deal for a while, but there’s a bit of a chicken and the egg problem there. The ecommerce solution provider partnerships – imagine a deal with ProStores – could solve that problem.

And then for more distribution, there’s the mysterious buySAFE widget – coming soon – called out on bondmywebsite saying that a merchant can bond their site in minutes. This will be a post transaction offer available to any merchant.

Ok, so I’ve painted a rosy outlook for the company. I’m drinking the kool-aid and it tastes good. Now let me bring up one weakness I see with buySAFE. Whether it’s the marketing the company has done or just a silly idea I picked up somewhere, I think of buySAFE covering me if something goes completely wrong – I buy a $500 digital camera and the seller takes my money and leaves the country never to be heard from again.

I don’t think of buySAFE as ensuring me against bait and switch deals (I order a digital camera at $500 and the seller calls me and says that I have to buy a $100 case to get that price), slow shippers, poor customer service operations, bad packing that leads to damaged products, and other ‘poor reputation’ sellers. You know, all those little things that make the difference between a smooth transaction and a 3 week nightmare . I don’t know buySAFE’s complete reveiw process, but I don’t think it gets into these type of reputation issues…and looking at a merchant’s BBB rating is not enough. This is where a company like Rapleaf comes into play. I’d love to see Rapleaf and buySAFE hook up.

Trust and safety in online transactions is a major problem for ecommerce. That’s why Steve Woda started buySAFE. A small or medium sized retailer needs a buySAFE type seal to help convince shoppers to press that buy button.

Thanks to Rob Caskey of buySAFE for background information for this post.

Related Posts:
buySAFE Wins AlwaysOn CEO Pitch – July 28, 2006
buySAFE Website Bonding – June 7, 2006
buySAFE Shopping with Confidence – February 12, 2006
Bringing Shopping Closer to Home – February 7, 2006

Tags: Comparison Engines


paulobrien said

You don’t think “Buy Safe” is a better tag line then “Buy with confidence”? ;)

January 5th, 2007 at 10:30 am |

Brian Smith said

well, it’s buySAFE – know who to trust. guaranteed. i think it should be buySAFE – buy with confidence.

why is your site soooo slow, paul?

January 5th, 2007 at 11:31 am |

migriffin said

I think BuySafe is great and they should do very well considering the recent surge in consumer interest for more transparent information. We spoke with them extensively at Shop.org and we’ll likely integrate their results with our CSE in 2007. With that said, I do think they have a marketing challenge of making the premise of bonded purchases easier for online customers to understand. If they can convey the safety and privacy guarantees of bonding in a 3-5 word tag line, I believe they’ll observe a surge in adoption. Privacy and transaction safety does matter to people (TNS Media Intelligence Survey, 2006) and BuySafe is likely in the best position to help alleviate some of these concerns.

January 8th, 2007 at 12:06 pm |

EarlyMiser said

Ok but how is this different than previous efforts to safeguard ecommerce? It’s not like there weren’t other people doing similar things (Better Business etc). I mean I understand the difference that a bond makes but while the average consumer. I think that transparency is important in ecommerce but at the same time isn’t this a function of a good site. I mean a small merchant worried about reputation is going to be a member of BBB, Truste, and various other “safe shopping” stickers. The problem is the consumer and merchants need to be convinced that this answers an existing problem and actually fufills a need. Additionally how much market penetration can this get? From their site “We only approve a small percentage of the merchants who apply to become Bonded Sellers . . .”

How much market penetration can you get when you only accept a “small percentage” of your customers?

January 8th, 2007 at 5:01 pm |

EarlyMiser said

Actually reading the blog entry about the guy starting Buysafe, I am not entirely sure that many of the “problems” he cites with Ebay are problems but are functions of a free market system. For example

“100 of eBay’s top 1,000 U.S. eBay sellers by feedback rating have either quit eBay or gone out of business”

“59% of eBay’s sellers apparently plan to stop selling on the eBay platform in the next six months”

“prices are 20-50% lower on eBay than on his other sales channels, and we have many, many merchant customers that will confirm this amazing statistic”

These sorts of things go hand in hand though with a nearly perfect market place for goods. Companies will go out of business and will slash prices to grow. Sometimes they will properly balance demand with margins and sometimes they won’t.

People are leaving ebay as a sales channel because the margins are horrible and an ebay customer is just as demanding as a customer acquired through another channel with better margins. The bonded customer experience that buySafe provides might help a bit with the margins but I suspect that it will be another race to the bottom with ebay.

On the other hand overlaying the data on top of a shopping comparison engine (non-ebay merchants included) might be a good idea. I missed this announcement as I was busy with earlymiser.com’s beta launch.

January 8th, 2007 at 5:24 pm |

ventureblogalist said

do you think BillmeLater has more upside? I hear they have 15% of merchants signed up. That number seems a bit too high.

February 5th, 2007 at 9:48 pm |

Steve Woda's Blog: buySAFE, eCommerce, Trust and Safety said

The buySAFE Revolution?

Could 2007 be the year for The buySAFE Revolution? Brian Smith at Comparison Engines recently did a comprehensive post analyzing buySAFE’s prospects in 2007. “The buySAFE Revolution – 2007″ by Comparison Engines

February 18th, 2007 at 9:06 pm |

krisstarr said

I have been trying to pull the bond from the Ebay Power Seller memoryman who in my opinion a fruad. Just google memoryman and see for your self. And Buysafe is stalling on doing so for unknown reasons. I stared the Buysafe process last year (2006) and now it has been over a month since the last email 2/2007 from BuySafe saying that they will call me and render a decision.

As of my experiences with them I would suggest everyone avoid using them if you acutally expect them to deliver if the seller cheats you.

Kris

March 13th, 2007 at 2:32 pm |

Superior Titanium said

Hello Brian,

Interesting article. We tried signing up for BuySafe recently (2009), however, it is still only available to US businesses. Any suggestions on a similar product that is available to Canadian companies as well?

Best regards,
Dan

February 17th, 2009 at 2:33 am |