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EcommerceBytes-Update, Number 245 - August 23, 2009 - ISSN 1528-6703     Previous | | Next

Haggling Online - Everyone Is Doing It

By Ina Steiner
EcommerceBytes.com

August 23, 2009
 



Haggling is as old as commerce itself, and today's shoppers and merchants are looking to bring the art of negotiation online. Early haggling sites included eWanted, BargainAndHaggle.com (both of which closed years ago) and iOffer, which remains in operation. Traditional antiques-and-collectibles marketplaces such as TIAS.com and RubyLane.com have added Make an Offer features, and haggling was introduced on eBay in 2004 by a third-party certified developer called Yldfire.

Before the company fell out of sorts with eBay, Yldfire said pilot programs showed its Make an Offer auctions outperformed traditional auctions by 159 percent. Months later, eBay introduced its own version called Best Offer, still available in certain categories for fixed-price format listings.

A site called Deal4It.com uses a clever technique to engage eBay shoppers: Video characters guide and encourage shoppers to make offers on eBay Auctions, Buy It Now and on Best Offer listings. The haggling process is quite unique and goes beyond eBay's Best Offer feature.

Other marketplaces have brought elements of negotiated commerce to their offerings. Bonanzle launched its fixed-price marketplace in 2008 and offers a site-wide chat system that allows buyers and sellers to negotiate with each other in real time. Sellers on DealItLive.com, which launched in May, run live video auctions, and bidders can ask sellers questions during the auction - though it markets itself as an auction site rather than a "haggling" marketplace.

Wigix, launched publicly last year, attempts to be a New York Stock Exchange for ecommerce - shoppers can place an open "buy order" on an item, in effect saying "I'll buy this iPhone for $309, and my offer is good for three days."

Among sites attempting to bring negotiated commerce even more mainstream are Aroxo, which acts as a matchmaker between buyers and sellers, and Eneksis, which resurrected Yldfire's Make an Offer technology and plans to make it available through online shopping carts for off-eBay availability on merchants' own websites.

Aroxo - Say What You'll Pay
Andrew Culpan and Matt Rogers founded Aroxo in 2006 with the idea of creating a "buyer-driven" commerce exchange. On Aroxo.co.uk, shoppers indicate the products they would like to purchase and how much they would be willing to pay. There's no fee and no commitment, and their email address remains private. Aroxo has a "thermometer" to help shoppers determine what prices are most likely to work in the Aroxo marketplace. Once the shopper has set their price for an item, Aroxo creates a "Want-it Note."

Aroxo matches Want-it Notes with sellers who can send personalized offers. Want-it Notes stay in the Aroxo system collecting offers until it either expires, the buyer accepts or negotiates on an item, or the shopper clicks a "Stop sending me offers" button.

Merchants wanting to sell on Aroxo must register, create a profile, set payment terms, and upload their inventory. There are then two ways to send offers through Aroxo: automatically, by setting a standard price and having Aroxo send offers to matching buyers; or manually, by picking which shoppers to send offers to and at what price.

Sellers pay fees to Aroxo for the leads, not sales. Currently the site states that Electronics and Home audio and video both incur 0.3% of buyer's wanted price, with no minimum fee or final value fee. The site explains, "As an example, let's assume that you are selling an Apple iPod touch 16GB for 215 pounds (British currency), to a buyer whose Want-it Note price was 200 pounds. The fee payable to contact the buyer would be 0.60 pounds (0.3% of 200 pounds). Even if it took 8 leads to achieve a sale for 215 pounds, the total would be 4.80 pounds, that's a total percentage cost of sale of just 2.2%."

Aroxo supports Google Checkout, PayPal, SagePay and telephone payments (with a few other payment options on the way, including Worldpay).

Aroxo says it is an efficient sales channel for sellers by offering them pre-qualified sales leads. "Potential buyers can be targeted with precision based on price, location and previous transaction history. Once a seller's stock list has been uploaded, real-time demand for each item can be seen and buyers can be targeted."

The company also states that selling on Aroxo won't cannibalize a seller's existing channels, since their prices are not publicly disclosed.

Eneksis - "Make an Offer" on Your Own Website
Eneksis is taking a unique approach to negotiated ecommerce by making it "platform independent." Instead of being a marketplace, it plans on making its service available through shopping cart services. This way, merchants can serve up the Make an Offer feature on their own ecommerce websites.

The Make an Offer service allows potential buyers to submit an offer to an online retailer for a particular item, receive an immediate response, and checkout using the merchant's existing shopping cart software. While buyers see the process as one-on-one negotiation, merchants can automate the process by setting auto-accept amount, auto-decline amount, and a maximum percentage discount.

Eneksis says it has re-engineered the Make an Offer feature to work with virtually any ecommerce platform by creating an XML web service that partner companies can access.

The point of all of these haggling sites and features is to engage shoppers in new ways. In these days of economic uncertainty, giving buyers the option to negotiate may help clinch the sale.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and AuctionBytes.com and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @auctionbytes and send news tips to ina@ecommercebytes.com.


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