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 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.
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