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EcommerceBytes-NewsFlash, Number 2881 - August 30, 2012 - ISSN 1539-5065    1 of 3

Bonanza Turns to eBay and Google for Help

By Ina Steiner
August 30, 2012

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Bonanza told users Wednesday night it was launching a program to help sellers move inventory faster by allowing them to choose to list their Bonanza inventory on eBay and advertise on Google Shopping.

The move to promote eBay is a major surprise to users - even the marketplace FAQ about the new program asked, "Wait, you allow publishing items to eBay? Aren't they the enemy?" That's because the site launched in 2008 when many sellers were looking for an alternative to eBay because of the changes taking place there. "Bonanzle," as it was called then, appealed to the anti-eBay sentiment.

The move to promote Google Shopping is less surprising, since Google changed the program from free to paid, and many if not most online sellers have already begun experiencing declines in free traffic from Google.

The new Bonanza program simplifies Google's Product Listing Ad program, which is the only way to get exposure on Google Shopping (listings may continue to appear for free in "organic" search).

How the eBay Integration Works
Sellers currently pay Bonanza a 3.5% commission if their item sells. They can continue to do so with no change whatsoever. But with the new "ad program," they can choose to select a higher commission in order to get exposure on Google Shopping and/or on eBay.

Bonanza uses sellers' own eBay accounts (using the sellers' eBay User IDs) to list their items in a 30-day fixed-price listing format. Bonanza sellers will get invoiced directly by eBay for the listing and FVF fees. Bonanza charges sellers an additional commission on top of the eBay FVF. Bonanza states, "If you like, you can choose to incorporate this 1.5% fee into your eBay listing price, so its essentially "invisible" and you're just paying the standard eBay fees."

If the item sells on Bonanza first, the commission fee sellers pay to Bonanza could potentially be as high as 13%, but in actuality it would probably tend to average around half of that "if buyers like your stuff," according to Bonanza.

Bonanza founder Bill Harding answered some questions via email on Wednesday evening.

EcommerceBytes: Someone asked, "If we publish to eBay via bonanza will we be using our own ebay user idís?" Who at Bonanza will manage the listings (FP vs auction, duration, starting price, etc.)

Bill Harding: Yes (the seller's own eBay User ID is used). It's published to the user's eBay account as FP (Fixed Price).

EcommerceBytes: Other sites have integrated with eBay so that the merchant can choose to send part of their XYZ Site to eBay, but it seems like Bonanza isn't doing that.

Bill Harding: They can in fact send their merchandise in part if they choose. The toolset we have for that will initially be rudimentary, but I think we can make it pretty elegant for v2.

EcommerceBytes: By presenting the ad program as, "how much do you want to spend," it seems like it is multi-channel selling for dummies. Merchants don't have to worry about knowing how to sell on eBay or Google. Is that the idea?

Bill Harding: "Dummies" isn't probably the word I'd use to describe a seller who doesn't want to learn CPC and click arbitrage. Maybe "Mutlti-channel selling for practical people." :) But in essence you're right - a lot of what we're trying to do is give sellers an easy-to-use version the extremely powerful (but complex) tools like those used at ChannelAdvisor. We want to allow sellers to drive as much traffic to their store as they desire, all from within their Bonanza account.

EcommerceBytes: Also, it seems like Bonanza is saying it isn't driving enough buyer traffic to listings to sustain sellers, can you talk about that?

Bill Harding: Our situation is no worse than that of any other non-gorilla marketplace. We provide our sellers with a superb value at the 3.5% commission rate, with nearly every item on our site crawled by Google organic search, and an email marketing program with more than a quarter million subscribers. But that's no reason we shouldn't strive to do even better. Our revenue for this year has increased more than 50% so far, but I know that our sellers expect constant, rapid growth, and so do I.

I think that we are in the best position possible because of the high speed we can build novel features. This allows us to stay a step ahead of the game and capitalize on growth opportunities like this one when they present themselves.

You can read Harding's full post on the Bonanza blog along with his answers to sellers' questions in the comments section.

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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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