EcommerceBytes-Update, Number 213 - April 20, 2008 - ISSN 1528-6703     3 of 7

iOffer.com, the 'Make Me an Offer' Ecommerce Site

By Greg Holden

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Wouldn't it be nice if buyers and sellers could exchange goods online the way they do in the real world? When you see something you want in a physical store or marketplace, you don't keep an eye on it for a week and then bid furiously on it just a few minutes before a predetermined ending time occurs, do you? If sales worked that way in the brick-and-mortar world, businesspeople would find it hard to survive. Instead, you either pay right away or make an offer and then bargain with the seller until you agree on a price.

That's the kind of thought process Ryan Boyce and some friends went through in 2002 when they created the online marketplace iOffer (http://www.ioffer.com). This site, which is becoming increasingly popular, allows buyers to make offers and to negotiate with sellers without a hard-and-fast deadline.

"There was a group of us in the beginning; some were friends, and some had worked on a Web site called eWanted.com," explains Boyce. "We were in the right place at the right time. One of us was using eBay to buy a hard drive, and he set his alarm clock to get up at 2:30 am when the auction was ending. He looked tired when we all met the next day. We did some brainstorming and said, "There's got to be a better way to buy something. There are plenty of other hard drives for sale online, so there's no reason for him to be up at 2:30 a.m. to save a couple bucks. Why couldn't he just buy it the way you would in real life?""

iOffer was launched on May 1, 2002. Boyce, who started out as a network engineer, is now CEO of the San Francisco-based company. He originally helped set up the infrastructure and network for the site, and still does some programming when needed.

The site provides a dramatic contrast to eBay's auction sales formats. First, you don't have to pay anything to create a listing on iOffer. You can set a starting price if you wish. But if you don't know what something is worth, you can simply invite prospective buyers to make offers. In this case, you leave it up to the buyer to suggest a reasonable price. You can either accept that price or make a counteroffer. Offers go back and forth until a price is agreed upon.

"Although eBay was in the back of our minds, we wanted to create a better alternative," says Boyce, who is 28 years old. "We never looked at eBay so that we could copy them. I think eBay is more about the experience than the auctions. We've tried to develop live interactions. More than half of our buyers get notification with only five to ten minutes of lag time," he says.

iOffer offers many innovative services for both buyers and sellers. For example, sellers can open stores, and the site has a discussion area along with "clubs" that members can join. iOffer has a local service that lets individuals find buyers and sellers in their immediate area. And software tool called Mr. Grabber takes your unsold listings from eBay or other sites and imports them to iOffer so you can resell them.

"We can find out right away if people like or hate a new feature. It's the instant gratification of being able to look at a page and change it right away that makes it all worthwhile," he says.

Of course, it takes courage to stick to change when there are complaints. Boyce remembers what happened in 2006 when the site's architecture was rewritten from scratch. "Half a year later, nobody was using it. It was hard to explain to our customer base. They kept saying, "Why did you change that?" We'd outgrown our old systems and had to do it," he says.

Like any online business, iOffer has faced a series of other challenges. One is adverse selection: buyers attracted by the free listings but whose merchandise simply wasn't desirable. "We had one seller who listed around 20,000 items," recalls Boyce. "Only half had a picture. Some photos were blurry, and some listings only had three-word descriptions. He never sold a single item." The problem is not only attracting sellers with good inventory, but simply having an adequate mix of buyers and sellers, he adds.

Boyce believes that the computer has replaced the TV as the major form of entertainment, and the key is embracing the whole mobile connectivity. "We see a lot more consumers online everywhere. Most phones have the capacity to get online and take a picture, so we have a notification feature that lets sellers be connected all the time," he says, adding that the feature is still in beta testing. iOffer sends notifications to buyers and sellers, and plans to enable sellers to list items for sale from their mobile phones.

And more people are connecting to iOffer. He estimates that last year, there were two to four thousand sellers online at any given time. In the last month or two, seven to thirteen thousand sellers have been waiting to accept offers.

One factor is the economy, according to Boyce. "I don't want to call it a recession, but when the economy is down people tend to buy more used merchandise and to sell more of their own stuff. They don't have extra money to make purchases," he says.

Boyce also finds that sellers are increasingly disenchanted with eBay. "Sellers don't like the way eBay treats them, and if they can find an alternative, they will. We have the buyers. This last week was our busiest week on record, and I don't see it slowing down. We are seen as Number Two in the auction space. We may be a distant Number Two, but that's an important place," he says.

Clarification: The article has been edited to clarify the following sentence: "In the last month or two, seven to thirteen thousand sellers have been waiting to accept offers."


About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.


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