Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed June 26 2013 10:57:58

What Would Get You to Try New eBay Rival from Square?

By: Ina Steiner

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Many small sellers are blase about new marketplaces, having had their hearts broken many times before by companies' failed attempts to launch an eBay competitor. So what would get you to try a new one?

Square, a company that allows sellers to easily accept credit cards in the offline world, is expanding to the online world with the launch of an online marketplace for merchants. The move comes as PayPal expands its service offline through retail point-of-sale systems and credit card swipers.



Square has the advantage of lower fees - in particular, there's no 30 cent per transaction fee as many online payment processors have - an enormous advantage especially for sellers of very low-priced goods (30 cents is 15% of a $2 item!). And it ONLY charges payment processing fees - no listing fees, no commission fees. Compare that to eBay, Amazon and Etsy, and Square Market looks like a bargain for sellers.

On the other hand, Square only allows merchants to accept credit cards. Not only does that limit buyers' choice of payment method, it also means sellers are bound by the credit card chargeback process if a buyer contests a transaction.

Square is also limited to U.S. both in terms of sellers and customers, according to the Square Seller Agreement, which does not seem to have been updated to account for its new marketplace. (It does have an updated agreement for buyers.)

Another challenge is that Square thinks like a payment processor, not like a marketplace. New merchants looking into Square Market will want to know how they can easily upload their inventory and keep it synced across all of the channels on which they sell, how their listings will get exposure to buyers including on search engines like Google and Bing, and how the company will protect them from bad buyers.

In last year's EcommerceBytes Sellers Choice Awards for Online Payments, respondents who rated Square rated the service very highly, particularly on Fee Structure (8.1) and as a service they would recommend to other sellers (8.6). Its lowest mark was for Dispute Resolution (7.2). However, until today, Square was designed primarily for in-person credit card processing and the company did not make it into the final Sellers Choice chart because too few readers had rated Square. (PayPal was used by the most respondents.)

The launch of the Square Market will likely be a big draw to small marketplace sellers, especially Etsy where many sellers already use Square to process payments at fairs and shows. Square has a big advantage over other companies that have tried to gain traction as a marketplace - not only does it have an existing base of merchants, but ones who are motivated to drive buyers to their Square Market store thanks to the lower fees.

However, rival payment processor Dwolla charges only 25 cents per transaction, period, but it's been a challenge for the service to gain traction - low fees alone aren't a guarantee of overnight success.

EcommerceBytes is currently running its annual Sellers Choice Awards (you can click here to rate the ecommerce services you use, including online payments) - a sneak peek at some of the comments from sellers about Square include the following:

"LOVE Square!! They just charge the %. Wish PayPal only charged the % (even if it was another 1/10 percent or something to make up for the lack of a service fee. That 30 cents on small sales ($1 or $2) REALLY hurts!"

"PayPal is becoming more of a hassle to use their guarantee of a refund regardless of the situation is a major problem. Switched to Square earlier this year and it is working great with a lot more ease of use and lower fees also."

"PayPal requires a $30 monthly membership for Merchant Account, in addition to transaction fees. I've been stuck with it because I take orders from other nations and require PayPal's currency exchange. Now that international sales have dropped drastically due to USPS increase, I may be dropping PayPal for Square at the end of the year."


Peruse the Square marketplace, learn about setting up a Square Market store, and let us know if it's something you'll be exploring (and why/why not).

What odds do you give Square Market of surviving (and thriving), and which current player has the most to fear?




Comments (39) | Leave Comment | Permalink

Readers Comments

Perminate Link for What Would Get You to Try New eBay Rival from Square?   What Would Get You to Try New eBay Rival from Square?

by: RCL This user has validated their user name.

Wed Jun 26 12:57:00 2013

Where the heck is the search function? All I can find are stores names.

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This user has validated their user name. by: Rexford

Wed Jun 26 13:37:29 2013

Right now it wouldn't take much. Will be looking at it.  I do think it is finally time to build our own web site.  

I don't think we'll hitch our wagon to anyone else's star.  We'll only use someone else's site for leads.

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This user has validated their user name. by: Basset

Wed Jun 26 13:41:10 2013

At first glance:

I like the clean look of it but I find it a bit hard to navigate at first blush.

It appears you create a store. Then scroll through the stores. I did not find a search feature to search the entire site.  It could be there, I just did not find it.

Going into individual stores: I noticed some, but not a lot of inventory choices in the ones I entered (I did not go into each store).  Also, there was NOT a search feature in each store - I was specifically looking for one.

I did stumble upon the list of prohibited items. I did not see a specific prohibition of used or OOAK items.  But I do think there are a few more limitations than eBay has.

The magnifying glass icon at the top expands into a search? field. It only took me to local (I was NOT signed in) businesses though. Several sites did not have photos. Several of the local websites listed did not function.

My initial take would be that it looks nice & clean, is a bit hard to find specific things but might be nice to browse.

If I had a ''store'' on Square, I think I would limit the number of items, too, if there is not a search feature.  You CAN provide a link to your own website.

I DO think if you have your own website, it may be another option to direct traffic to it, but you would want to keep it up to date.

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by: Digmen1 This user has validated their user name.
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Wed Jun 26 16:28:35 2013

Annother market place wannabe?




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by: Digmen1 This user has validated their user name.
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Wed Jun 26 16:30:22 2013

They would be better off if they let buyers pay by direct credit baking like we do here in NZ on our Trademe site.

No costs and no fees, nice and easy and quick and safe.

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by: Patricia This user has validated their user name.

Wed Jun 26 19:47:15 2013

I started trying other venues several years ago.  I sell some on Etsy and now have finally found a great artsite dedicated solely to original art.  I'm a happy camper and today making as much and more than I ever made on Ebay, I have only one item on Ebay :-)  If you don't at least try other venues you will never be out from under Ebay's thumb!  Don't expect as many sales right off the bat but you can build that up with time.

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by: unusual1 This user has validated their user name.
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Wed Jun 26 23:22:50 2013

I have had Square and used it for quite a while - until I found Payanywhere. Square is a problem to deal with as it is only emails. If anything goes wrong it is a time consuming mess. Payanywhere is the same cost with support by live people, statement  and online service. I have just about stopped using Square. I would not want to sell on a site that didn't have live support and not fully functional.  

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This user has validated their user name. by: The End

Wed Jun 26 23:37:56 2013

Just tried SQUARE on for size.
DON'T GO THERE !
You can't close your account. No help WHATSOEVER.
The Complaints rival that of PayPal.
The whole place emotes the erie feeling of Scam.
Just Sayin'.

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This user has validated their user name. by: The End

Thu Jun 27 00:09:47 2013

Just attempted to view Square Market store merchandise. Repeatedly got a window telling me I had to download Java. (I don't need it).
It kept blocking my view of everyone's items.
It a Useless website.
And it's giving Verisign a bad name.

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This user has validated their user name. by: Ming the Merciless

Thu Jun 27 02:50:20 2013

Only if they advertise.

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This user has validated their user name. by: Marie

Thu Jun 27 03:42:35 2013

I agree, where the heck is the search feature.  simple yet extremely important to anyone's success.

It looks like they only have a couple dozen stores which can easily fit on the first page.  But what the heck would they do if they had 1000's of stores.  Would they expect potential customer to page through all the stores until they found one they wanted to shop in.  And then how would they compare products and pricing with another store.  Make manual notes.

I am all up for a real competitor to Ebay and PP, but IMHO this one has a very long ways to go.

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by: Mr. Me This user has validated their user name.

Thu Jun 27 11:30:45 2013

YAWN, another "mee too" site with no advertising and little traffic.....

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by: klbarry This user has validated their user name.

Thu Jun 27 13:32:22 2013

It's the same for any new marketplace - just set yourself up to connect to ChannelAdvisor's API, and you'll get a number of enterprise sellers like my company in no time.

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by: Massachusets Howler This user has validated their user name.

Thu Jun 27 14:59:10 2013

Let's not chase them away- folks can open a store there and put their new stuff in there!
Anything IS better than this.
LW seems alive and well to me!
MH

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by: Massachusets Howler This user has validated their user name.

Thu Jun 27 15:01:03 2013

When they get more sellers I am sure that will add a search or an index.
Like your own site you will have to drive traffic to it, and yes, they will need to advertise.
MH- Lets let them get started and look at them in 30-60 days.
MH

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by: TomH This user has validated their user name.

Thu Jun 27 15:41:04 2013

Search didn't work for me or did not find any of the five items I tried. Clumsy site. It's pretty in a worthless way. I left after two minutes and will not return.

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This user has validated their user name. by: iheartjacksparrow

Thu Jun 27 16:13:01 2013

I tried the search (click on the magnifying glass to show a search box), and chose "dolls." After a while, I get a screen showing a map with a bunch of dots in California, and then a bunch of store logos, presumably corresponding to the dots and taking square for payment. The first one I clicked on had a "closed" sign when the company page opened. I wouldn't consider selling there until they make some major changes to the site.  

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by: Susan Averello This user has validated their user name.

Thu Jun 27 17:02:21 2013

It seems set up more like SupaDupa than a venue. All individual stores with the platform but no real linking between them. It's basically a stand alone store, a whole different ball game from Ebay - not really competition.  

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This user has validated their user name. by: Ed Gadfly
Web Site

Thu Jun 27 17:26:30 2013

Why give Square a chance when PreyPal works in outer space?!?

http://abcnews.go.com/Technology/paypal-galactic-launches-answ
er-questions-space-transactions/story?id=19498683#.UcytDOvEhv0

Guys
like Johnny D. are such big cheerleaders for this place...

it will be interesting when the Sith hit the Fan.

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by: JohnGermaine This user has validated their user name.

Thu Jun 27 23:07:06 2013

Nothing would entice me, I have no need and it's expensive. Checked into it when it first came out. No thanks.

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