|Thu Aug 30 2012 00:00:53|
Bonanza to Help Sellers List Items on eBay and Google
By: Ina Steiner
The marketplace that barged onto the scene in 2008 as an alternative to eBay and attracted unhappy eBay sellers is now going to help its members sell on eBay.
Bonanza is launching a program to help sellers sell items more quickly than they could do by listing on Bonanza alone - for sellers who are willing to pay a higher commission. It's a bit of a "multichannel selling for dummies" approach, since Bonanza simplifies the process for sellers - and it also removes the risk of upfront CPC (cost-per-click) costs for Google Shopping ads, which will soon no longer be free.
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 also choose to select a higher commission in order to get exposure on Google Shopping and/or on eBay.
Bonanza uses sellers' own eBay accounts in order to list their items in a 30-day fixed-price listing format. Presumably Bonanza sellers will get charged directly by eBay for the listing fees. Just who bills the seller for the eBay commission fees is murky, and Bonanza charges sellers an additional commission on top of the eBay FVF. (Bonanza alerted us to their blog post on Wednesday evening and did not pre-brief us; it seems sellers commenting on the Bonanza blog have some of the same questions we have.)
Part of the explanation into how the new program works is found in the FAQ, "How is it that Bonanza can be paying to buy me Google Shopping clicks before I've paid Bonanza?"
"This is indeed the major difference between Bonanza and every other advertising platform that we know of. We have built systems that understand the selling potential of a given item, so we can have our software automatically adjust the cost per click such that the risk is sufficiently low for Bonanza. That said, there will be many times where we pay for clicks to your items, your items don't sell, and we lose money. We accept that as a cost of doing business to help us reach our "big hairy audacious goal" (see above).
Those potential losses are justified to us, because we don't think that you want to learn how to calculate the optimal CPC cost for your items, so we're doing away with the complicated stuff and focusing on what matters to you - what percentage of your profits are going to be spent on getting this item sold?"
The FAQs for Bonanza's new ad platform acknowledges that many sellers are disgruntled eBay sellers - one FAQ asks, "Wait, you allow publishing items to eBay? Aren't they the enemy?"
The answer to the question is as follows:
"We understand that many of our sellers have had bad eBay experiences at some point, and there are certainly aspects of the eBay selling experience that leave something to be desired. But at the end of the day, eBay can often be the fastest way to get an item sold, if you can afford the fees. For the sellers who are interested in making the most sales possible, publishing their items to eBay while using Bonanza's award-winning UI (all while getting paid advertising handled for them in Google Shopping by Bonanza) is a solution that will probably make a lot of sense."
Founder Bonanza Bill Harding called the new approach a paradigm shift in an effort to drive more sales to sellers' booths.
It appears to be an admission that their merchants' sales are slow, and calls into question just how viable an alternative marketplace Bonanza is.
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