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EcommerceBytes-NewsFlash, Number 2651 - October 13, 2011 - ISSN 1539-5065    2 of 4

What X.Commerce Means for Merchants and Developers

By Ina Steiner
EcommerceBytes.com
October 13, 2011




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eBay is building its new developer ecosystem on the Magento platform, and not on the eBay platform. During its X.Commerce Innovate conference for developers on Wednesday, eBay said online merchants would benefit from its new open-platform approach - and that's true for merchants on Magento, since they'll have access to integrated tool that will help them with inventory management, shipping, advertising, and analytics. They'll pay for these third-party tools, of course, but vendors will offer more affordable monthly subscription plans compared to enterprise versions.

"Micro" merchants - the small eBay or marketplace seller - will not benefit enormously from X.commerce integrations unless they sign up for Magento, since merchants control their applications (called extensions) through their Magento dashboard.

eBay and PayPal are part of the X.commerce Fabric announced Wednesday, so it's conceivable eBay sellers could benefit somewhat from the open platform approach, but it's clear the sweet spot for X.Commerce and third-party developers is Magento.

One of the big announcements made Monday at Innovate is that Magento will be making extensions available on Magento Go, which is the hosted service akin to eBay ProStores. Magento Go has plans starting at $15/month - and merchants can get a free year of Magento Go for a limited time, ideal for small sellers who aspire to grow into a store - see Magento Go plans.

Magento, which eBay acquired, already has a thriving ecosystem of developers. Magento announced improvements to Magento Connect at the conference, which is an efficient way for developers and merchants to buy and sell applications (extensions, or modules) - a sort of Apple iTunes for its third-party developers and merchants to connect.

eBay also announced it had attracted some big names to integrate with Magento (via X.Commerce) including Adobe, Facebook and Kenshoo, demonstrating both its commitment to developers and its success in attracting best-of-breed applications.

It may surprise eBay buyers and sellers, but eBay Inc. is taking the position that its marketplace is just one channel, though a significant one, that integrates with Magento.

Matthew Mengerink, VP & General Manager of eBay's X.commerce unit, took the stage at Innovate with some messages for developers and merchants:

1) It's easy for merchants to add inventory and set up an online store using Magento.
Mengerink used an example of a retailer, SoccerPro, showing how easy it was for it to load its inventory and launch the site.

2) Merchants want to be multi-channel, and they can use Magento integrations to do so.
Mengerink showed how Magento merchants could integrate with other channels - for example, they can go global by listing product on eBay Australia, and can go local by listing to Milo (also owned by eBay).

3) Merchants want powerful Analytics and reports to show how they are performing and how they can best optimize sales and marketing, and they can now use powerful features from Adobe Omniture integrated right into the Magento dashboard.
Adobe executives took the stage and said merchants can access all the metrics that matter to any business, such as where traffic is coming from, and use the data to increase conversion rates. They gave an example of a retailer who uses Adobe analytics reports in Magento to see that while their affiliate program drove more traffic than their email campaigns, the email campaigns actually drove more conversions than the affiliate program.

4) Merchants need ways to drive traffic to their stores and can use Kenshoo within Magento to create ad campaigns.
Kenshoo showed how its automated demand generation services can help merchants to launch ad campaigns on Google and Facebook that are tied to specific products and keywords, and can see reports displaying cost, sales, etc., right inside Magento.

5) Merchants can facilitate cross-border sales by setting up localalized Magento storefronts, PayPal in local currencies, and Shipwire's fulfillment service, all integrated with Magento.
A Chinese service called Mazentop showed how a Chinese merchant can set up a French-language store in Magento with their entire catalog translated. The merchant can choose the default currency (Euro), payment method (PayPal), and can use the Shipwire fulfillment extension from Magento.

Roy Rubin, cofounder of Magento, also took the stage and talked about the power of extensions. Magento has over 4,800 extensions with over 4 million downloads. Developers realize $100 million in revenue per year through the Magento platform, he said.

PayPal Access "Commerce Identity"
Damon Hougland of X.Commerce and Mark Lavelle of PayPal unveiled PayPal Access, which allows shoppers to log into retail sites and Magento stores using their PayPal credentials. By not requiring shoppers to register for their stores and enter all their data yet again, merchants can improve conversion rates, and more powerful features will be rolled out in the future. You can see PayPal Access in action on TinyPay.me, and you can see what EcommerceBytes readers had to say about the concept on Monday's EcommerceBytes Blog post.

Can X.commerce Work for eBay and Magento?
This year's Innovate conference is reminiscent of eBay developers conferences circa 2006 when developers were eager to create useful tools for sellers. However, many sellers made razor-thin margins, eBay continued to raise fees, and it didn't provide an effective platform to bring sellers and developers together.

Magento has a very different model and culture than eBay and it already has a thriving ecosystem. And that's exactly why eBay acquired Magento after trying to open its own marketplace up to developers with little success. But the bottom line is that merchants must make enough money to support the cost of operating their store and make a living, with enough profit left over to subscribe to third-party tools.

Xcommerce says one of its goals is to help developers monetize their applications - here's a link to five ways developers can make money on X.commerce.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes 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 @ecommercebytes and send news tips to ina@ecommercebytes.com.

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