buySAFE blog - Views on e-commerce, online auctions, eBay and trust from buySAFE CEO Jeff Grass.

Margins: How Low Can You Go?

How low can you go? This is a defining question for any business, particularly in e-commerce. Sales and top line revenue are always important, but what is clearly understood as highly significant by every successful entrepreneur that I have ever met is a low margin. As the VP of Sales at buySAFE, I have the opportunity to speak with many e-commerce merchants selling in all product categories, and I can see that Internet merchants are constantly under pressure to reduce their margins from every possible direction.

Some of the most attractive characteristics of doing business on the web have been lack of or minimization of “brick and mortar” costs along with low barriers to entry and a nearly unlimited market reach with over 200 million online consumers. All of this should mean great margins regardless of the COGS profile of any business. As e-commerce matures though, these “advantages” are being eroded to the detriment of merchant profitability.

The minimal barriers to entry have resulted in a general lack of confidence in merchants by consumers since it is very difficult to differentiate through a browser. Some merchants have been all too willing to combat this problem with discounting of the product, while others get into e-commerce with discounting as their sole strategy. The net results are lower margins. The good news here is that 200 million consumers might see your site. The bad news is that it costs quite a bit to get them there. I cannot tell you how many near disasters I have heard about as a result of a runaway Pay-Per-Click (PPC) program. Paying for keywords in the hope of driving traffic can be a risky proposition. The result? Lower margins due to high customer acquisition costs.

But wait, there is more. I wouldn’t want to leave out payment processing fees, fraud detection fees, charge-backs and of course shipping. So how low can you go? But perhaps there is a better way.

buySAFE merchants are able to deflect some of these pressures and stem the tide of declining margins through the use of our bonding service, which provides a level of trust and confidence for consumers not normally found on the web. This helps shoppers discriminate between otherwise similar websites. The net effect is margin protection.

And it gets better. We have recently launched our Bonded Shopping Network focused on attracting the very shoppers that seek the trust and confidence gained from bonded merchants. This network provides consumers with multiple avenues to find these merchants. These consumers do not look at price first. Instead, their first priority is a trusted merchant. The best thing about this new program is it stands at the forefront of e-commerce advertising by utilizing a CPA (cost per acquisition) fee structure. This means that merchants pay advertising fees only after a consumer has made a purchase. The result is not only margin protection but cash flow improvement as well.

The best businesses manage their margins, rather than being told by the market what they must accept. eCommerce sellers are no different; those that can offer real differentiation to the shopper will protect their margins AND grow their revenues. So perhaps the question, after all, should be: How low do you have to go?

Today’s blog was written by Jon Aust, our VP of Sales & Marketing. Jon joined buySAFE in August of 2007 and is responsible for all Merchant sales efforts. Jon is an entrepreneur having launched a number of technology companies and enjoys helping e-merchants to grow their businesses through the guarantee of trust that buySAFE provides.

How the Online Merchant could survive (and profit from) the Recession

The ongoing recession has everyone in a state of uncomfortable uncertainty. The weak economy has consumers and merchants worried alike. But this very uncertainty represents an opportunity for smart merchants who can position themselves as precisely the TRUSTED, value-conscious, and low-hassle sellers that shoppers seek out during a downturn. 

While it is true that qualms about the economy cause some e-consumers to cut back on their online shopping, a recent survey also indicates that  other consumers plan to shop more online because of the convenience and greater chances of finding good deals, of course, to save money on gas (see a recent survey of 200 consumers by investment firm Piper Jaffray).  So the question is NOT what the macro-trend is, but rather how the smart merchant benefits from this share-shift.   

According to this survey, while 33% of online shoppers plan to reduce online spending on discretionary goods, 12% expect to spend more and 55% foresee no change. High-ticket luxury items are most likely to be affected by the decision to delay purchase.

Clearly, tactics for addressing the consumer also change.  For example, 67% of consumers polled by ICOM Information and Communications in another recent survey say that they increase coupon use in a weakened economy. 58% of these consumers favor electronic coupons delivered to loyalty cards online.

The U.S. government’s plan to send tax rebates to many consumers this spring has the ability to provide retailers a boost. But while Tax Rebates will inject a wave of expendable cash into the economy, two factors will influence the opportunity this creates for online sellers in the next two quarters: 1 - More emphasis on value and safety, and 2 - Easier access to discounts and coupons. Here’s how:

Both factors have directly to do with the increased importance of ‘value for money’ for every cent that the consumers spend. Both also increase the likelihood of more consumers turning to the Internet to make way through cuts in their personal expenses. We already know that starting with the price of gas, shopping online is just less expensive than driving to a store. Moreover, depending on how and where you shop, it’s easier to find tax savings, coupons and shipping deals online, because there are more and more narrowed down comparison and specialty stores on the Internet than there were a few years ago. This growth, from brick-and-mortar establishments into a host of niche stores that exist only online, definitely contributes to an exciting scenario for the online retailer. And combined with individual sellers on online marketplaces like Craig’s List, eBay (and now Facebook), these all add up to a plethora of choices for the price-sensitive consumer.
Along with the opportunity this brings though, there are certain challenges to be faced by the online merchant. The smart ones are going to take up these challenges and employ them to make the most of the ‘boom’ that recession can bring them.

1. Firstly, as the competition grows, it is imperative to play on quality not price. There is only a limit to the consumers who buy solely on price. Broken promises are unforgivable in the choice-plenty world of online shopping. Especially with the kind of influence feedback ratings, blogs and chat rooms carry, anyone who finds fault with your product can easily find an eager audience to complain to. Bad word of mouth travels fast.
2. Secondly, show your buyers that they are protected and won’t get ripped off if they deal with you! And there’s no better way to do this than to give the solid assurance of a bond. Protection Seals, bonding, safety from identity theft – show consumers that you care for their safety and that you have taken the extra steps to guarantee their safety. If you don’t take those steps, I assure you that your competitors will!

There are clear signs of a burst of growth in the online economy as shoppers turn to the Internet to better manage their shrinking budgets. It is now up to the smart online retailer to take full advantage of that!

Today’s buySAFE blog was contributed by Madiha Qureshi, who is a part of our Marketing and Communications Team.

This Just in: 2007 Internet Crime Report

The 2007 Internet Crime Report, just released by the FBI and the Internet Fraud Complaint Center, shines a spotlight on the overwhelming share of merchant non-performance as a part of overall internet fraud. The report states that over 60% of all internet fraud complaints are for merchant non-performance — compare that with a paltry 2.9% of all complaints for the much-hyped ID theft.

The total dollar value of consumer losses due to fraud also increased over 20% from the year before, from $198M to $239M – faster than the rate of the underlying growth in online sales. In short, the “bad guys” are doing better than the online market as a whole! Even more interestingly, the report’s research shows that fewer than 1 in 7 losses are ever reported, so the true problem must be significantly larger than the reported numbers.

According to the report, the Top Three internet user complaints by category are:

1. Auction Fraud – 35.7%
2. Non-Delivery – 24.9%
3. Confidence Fraud – 6.7%

While internet auction fraud was by far the most reported offense, non-delivery of merchandise and/or refusal to refund increased 31.1% from 2006.

These data explain powerfully why many online shoppers are anxious about buying online, despite the enormous benefits and rapid adoption of ecommerce. Shoppers’ uncertainty impacts their willingness to make online purchases – the reason why the National Consumers League’s Internet Fraud Watch now advises consumers to seek out bonded merchants when they buy online.

And that is, of course, where buySAFE comes in — we are experts at identifying good merchants, and so we can guarantee that they will perform, or we’ll take the loss for the consumer. We’ve bonded over 15 million transactions, and no honest consumer has ever lost a nickel. It’s very satisfying for me and my team to work in an area of the net that protects both consumers and rewards honest, reputable merchants.

For more information, check out the National Consumers League’s Internet Fraud Watch to read tips and info on protecting oneself when buying online.

Today’s buySAFE blog was contributed by Hans Dreyer, our VP of Operations. Hans has been with buySAFE since 2003, is in charge of our operations and customer support group, and, when he is not making the net safe for ecommerce, runs in ultra-marathons/adventure races and enjoys traveling the world.

Upcoming Event - eCommerce Summit, New Orleans

We at buySAFE are excited about the upcoming eCommerce Summit in New Orleans starting April 22.  If you are undecided about attending, ask any past attendee, or better yet, ask us!   For anyone with a stake in ecommerce, this is one networking and business opportunity that is reliably interesting, important, and productive…and a lot of fun.

Sponsored by our friends PeSA, Infopia and ECMTA, this year’s eCommerce Summit is going to be a happening event in New Orleans (three days of summit, one day of optional volunteering at Habitat for Humanity and all that followed by the weekend New Orleans Jazz Festival!). Hundreds of online merchants will gather up for 3 days of learning internet best-practices and networking with industry leaders and Internet thought leaders.  buySAFE will be a participant as well as proud sponsor!

The dates are April 22 – 24 and the venue is Morial Convention Center in New Orleans. The Summit will feature twenty sessions that cover almost every aspect of e-commerce.

What’s on the agenda: The two Keynote Sessions will be given by Lorrie Norrington, President of eBay Global Marketplace Operations and Ted Murphy, Founder & CEO of Izea. Some of the topics for discussion on the agenda include:

• Generating Sales with Online Video
• Search Engine Optimization
• Detecting and Managing Click Fraud
• Website Conversion Analysis
• Optimizing Your PPC Program

Almost all leading internet players will be represented in the speaking sessions and presentations, including Yahoo!, Google, eBAY, Microsoft, Infopia, SingleFeed, MerchantAdvantage and many more.   

Go to the ECMTA summit website to find out more!

Protecting Brand Integrity in the Online Environment: A New Approach to a Monstrous Problem

Travis Brown is an occasional contributor to the buySAFE blog.  One of Travis’s particular interests is the dynamics of markets for fake and counterfeit goods, and ways to leverage consumer choice to combat this huge and growing problem. 

Travis recently published an article on this, arguing that brand owners could better protect their products from online sales of counterfeits if they required their online channels (resellers, etc.)  to become buySAFE Bonded Merchants. This would take a confusing, “grey” market and effectively split it into a “white” – safe – market and a buyer-beware “black” market. Consumers, brand owners AND honest retailers would all benefit from this clarity and safety. In the absence of a solution that scales at the rate of the problem, the situation will only get worse.

Check it out below …

Protecting Brand Integrity in the Online Environment:

A New Approach to a Monstrous Problem

It was the best of times;  it was the worst of times.

Charles Dickens precociously put his finger on the tension underlying the enormous growth in eCommerce. A merchant or seller of any kind can now, with a single virtual storefront, offer his wares to every shopper in the world with an internet connection… hundreds of millions of households with more purchasing power than ever assembled in one retail marketplace in history. Wow! Likewise a scam artist, selling fake goods marketed as authentic, can also set up a virtual storefront and offer his wares to that same audience.  Never has the enormous equity built into major brands been so vulnerable to destruction by pirates of all sorts. eCommerce is now a battleground for asymmetric commercial warfare.

Only recently has a technology been available that can suppress sales of fakes and harness the power of consumer choice to re-direct sales along the path of demand for genuine goods.

eCommerce: ePerfection or eNightmare?

Good news:eCommerce retail sales in the US are growing at about 20% a year – six times the rate of growth in the underlying retail economy.

Bad news: Online sales of counterfeit goods are growing at twice the rate of all online sales. This means, at current growth rates, counterfeit goods will outstrip sales of legitimate goods online in 2010 about 3:1. This is very bad news for any brand owner, manufacturer, or honest seller of legitimate product.

Why? The dynamics of eCommerce create a uniquely favorable environment for scam artists. Here’s why:

• Sellers tend to have more information than buyers, but on the web, this effect is amplified. The legendary cartoon showing one dog on a computer explaining to another dog best illustrates this issue:  “On the internet, no one knows you’re a dog.”  In other words, reputational markers of the brick-and-mortar world -- location, inherent promise of permanence, community reputation, etc. – are missing on the web. This creates an immediate disadvantage for consumers, and therefore scammers flock to this environment
• Powerful trends make counterfeiting a high-reward, low-risk crime for a number of reasons. For one, digitization of photos and other media make perfect copying easy. The massive production capacity in China and elsewhere means factories will bid very low for extra work. In addition, consumer place a high importance on brand names, which only further validates the desirability of goods, especially, but not exclusively, luxury goods. Lastly, the prevalence of search engines as a gateway to online shopping means that traffic can be manipulated in new ways.
• Globalization of manufacturing, increasingly complex supply chains, and porosity of national borders all mean that local governments, customs departments face a number of challenges in stopping global trade in fakes. In addition, internet technology is ideally suited to protecting the anonymity of the operator behind such trade. Websites are easy to set up, easy to take down and easy to relocate scam operations. Local police agencies are no match for this.

The internet can be a tough and frustrating environment for owners and sellers of merchandise with well known-brands and consumers who want authentic goods but don’t want to pay more than the market price for that product. It’s a lose/lose/lose proposition for these brand owners, honest online merchants, and consumer who still want to buy genuine goods. The only winners are the bad guys.

Limits of Conventional Approaches to Suppressing Sales of Fakes

So what can brand owners do to combat this threat to their most valuable property: the integrity of their brands? Let’s start by listing what they have done in the past. Common tactics include:

• Hiring private detectives to chase down counterfeit product and determine its source and path through the distribution chain.  If these investigative efforts yield real information, they attempt to build legal cases (civil and criminal) against counterfeiters and their distribution chains, despite the near impossibility of getting jurisdiction over the most effective counterfeit producers.
• Lobby governments to deploy resources against the problem: more and better trained customs agent, better intelligence to go after counterfeiting rings, higher awareness of the nexus between counterfeiters and organized crime and even terrorist groups, consumer education, etc.
• Build harder-to-counterfeit products, either by high technology (microscopic ID tags, hidden serial numbers, etc) or low technology (some luxury goods manufacturers make their product more labor-intensive to manufacture, making it more expensive to copy).
• Employ various authentication tactics to help police and other experts identify genuine product, to strengthen ability to bring case against fraudsters.

What do all of these tactics have in common?

They are all essentially reactive. They attempt to go after the fake goods after it has already been injected into the stream of e-commerce. And they are effective in capturing only a very small percentage of the amount of illicit goods in circulation. These actions resemble the popular arcade game, WACK-A-MOLE: as soon as one mole is whacked, another pops up. The algorithm of this game is instructive: since the moles eventually pop up faster than they can be whacked down, the player always loses, sooner or later. A player can “win” only by delaying losing -- the moles always win in any absolute sense. Unfortunately, this is strong and logical metaphor for the effectiveness and scalability of these tactics outlined above.

A New Ally: The Consumer!

Brand owners need to get smart about harnessing the power of consumers to express their preferences for genuine goods. But wait: aren’t consumers the problem? Don’t they buy the fakes? Yes and no. There is a certain sector of consumers that knowingly want to buy a fake Hermes or Gucci purse, but there is a much larger proportion of consumers who want to buy the real thing at a good price, and are frustrated by the difficulty of how to do that without risk. In other words, the increasing rate of counterfeit sales does not necessarily reflect demand for fakes… it reflects in large part the very low level of reliable, transparent information on most eCommerce sites, and the ease with which an illegitimate seller can camouflage itself as a legitimate seller.

How Does this Work?

The simplest and most powerful way to enable consumers to discriminate between real and fake goods is NOT to focus on the goods, but to focus on the merchants. Instead of chasing “bad” merchants,  consumers need to be able to identify “good” merchants: honest, reputable online resellers who have been inspected, certified and bonded by an independent third party. One firm that does this is buySAFE, Inc. When buySAFE, Inc. allows a merchant to display the buySAFE Seal, it means that the merchant has been inspected by buySAFE, is determined to be stable and trustworthy and is continuously monitored to keep that status. buySAFE then allows customers to bond any purchase from that merchant: the bond essentially means that the merchant will perform according to his own terms and conditions. If they don’t, buySAFE will pay off the claim via a surety bond. This way, the customer knows in advance that she takes no risk around buying a fake, or any other breach by the merchant, if she relies on that buySAFE Seal.

This simple solution flips the existing situation on its head. Armed with reliable information to identify good merchants, consumers who choose to buy genuine can now do just that… with confidence, safety and peace of mind.

Those customers who want to buy fakes are not the market that the legitimate brand owner or merchant wants in any event, they are essentially in a different segment altogether. While these people are no doubt helping to fund an illegal activity, they are not the core problem. The difficulty of the mainstream consumer buying a legitimate good with confidence is the core problem, and so that is where the greatest opportunity for solution lies.

Next Steppes: How to Defeat the Barbarians at the Gate

The most effective way to harness millions of online decision makers to tilt the market back toward legitimate product is for suppliers to insist that their e-resellers become bonded by a third-party trust company as a condition of being an authorized reseller for that brand. This will revolutionize the marketplace to let the consumer buy real goods without risk, without fear, without hesitation. It would split the marketplace into the honest, transparent market, and the un-lit, underground, black market of fakes and scams. It would harness consumer choice to let their purchases precisely reflect their demand for authentic goods.

Conclusion: It’s the Habitat, Stupid! 

If poisoning, trapping, fumigating and enlisting government help were effective, there would be no cockroaches. Cockroaches thrive because they have found a very pro-cockroach habitat, not because they are popular.

For counterfeit trade, the key to making quantum changes is to change the amount and type of information that the online consumer can rely on in making the decision to buy. If brand owners required their online resellers to be certified and bonded by a third party, it would be the beginning of the end of the habitat that allows sellers of fakes to flourish. Brand owners owe themselves no less.

************************************************************

Travis Brown is General Counsel and VP International for buySAFE, Inc.

For more information on buySAFE, Inc., visit www.buysafe.com.

© Travis Brown,  2007

Vizu & buySAFE Release Holiday Shopping Survey Findings

Over the last couple of months, we conducted an online survey in partnership with Vizu Corporation to better understand what online shoppers are thinking this holiday season.  The results are useful for any eCommerce merchant to review.  Key highlights include:

• 1/3 of online shoppers plan to spend MORE online vs. last year - good news!

• Merchant performance is most important for online shoppers when making an online purchase - even more important than price: 48% cite merchant performance as the most important factor followed by price (38%), amount of selection (9%), and ease of transaction (6%).

• 66% said they would be more willing to buy online if every purchase was guaranteed
• 73% or respondents said lower shipping costs would cause them to spend more online this holiday season.
• 46% of respondents said they’d rather shop online this holiday season than face the hassle of malls or pay the high cost of gas.
• 34% said procrastination (e.g., buying items at the last minute) is the reason they would shop offline this holiday season
• One half of respondents have experienced at least one serious problem when buying online (e.g., item never arrived or wrong item arrive): nearly one-third of those have had at least three or more problems with online purchases.

You can also see more of the findings at www.MarketingCharts.com or by clicking here.

buySAFE Founder Interview on Practical eCommerce

Nice interview of Steve Woda in Practical eCommerce this week on "The Future of Shopping Carts."  If you haven't seen it yet, check it out by clicking here

The New New Internet – buySAFE CEO to speak at Web 2.0 for Business Conference

Executive Biz of Washington, DC is putting on a great Web 2.0 conference this week on Oct. 31 (Accelerator) and Nov. 1 (for Business). If you are going to be in the area and are interested in attending you can learn more about it at their website http://tnni07.thenewnewinternet.com/web-2-0-accelerator

They’ve lined up a great group of speakers to cover a wide range of topics related to Web 2.0. I’ll be speaking on a panel called “Maintaining Security while embracing Web 2.0 Open-ness” with Hart Rossman – Chief Security Technologist at SAIC and Steve Orrin – Director of Security Solutions at Intel. You can see info on many of the speakers here  http://tnni07.thenewnewinternet.com/speakers#grass

The panel will have bunch of very different perspectives so it should be highly informative. I hope to see you there.

Ingredients for the Secret Sauce – buySAFE Luncheon in Boston

As readers of this blog are aware, last Friday, buySAFE held an invitation-only luncheon in Boston titled “Discovering the Secret Sauce of Multi-Channel Selling Success.” With a capacity crowd at Anthony’s Pier 4 restaurant on the picturesque Boston Harbor waterfront, this panel drew e-commerce merchants, Wall Street analysts, and journalists as attendees, all of whom left the session with greater insight into the challenges of and key factors for succeeding online as a multi-channel merchant.

The topic and composition of the panel could not have been more timely, as the issue of multi-channel retailing came to the fore frequently during the week of eBay Live, with our panelists and attendees playing key roles:

· Moderator Ina Steiner of AuctionBytes.com was quoted in numerous publications during the week, and also scored key interviews with eBay North America president Bill Cobb and CEO Meg Whitman, addressing multi-channel issues specifically.

· Panelist Bjorn Espenes, CEO of Infopia, announced the availability of Infopia’s new book “The eCommerce 2.0 Handbook – How to Prosper in the New Era of Online Selling” by Ralf VonSosen.

· Panelist Brian Smith of ComparisonEngines.com and SingleFeed was one of the first to break the story of eBay’s decision to pull their advertising from Google.

· Panelist Jonathan Garriss of PeSA, ECMTA and Gotham City Online penned a much talked-about position paper about the eBay marketplace titled “Unhealthy Marketplace Dynamics - Seller Perspective.”

· Panelist Steve Woda of buySAFE announced new partnerships with TRUSTe and comparison shopping site PriceRunner.

· Attendee Derek Brown of Cantor Fitzgerald was quoted extensively in the San Francisco Chronicle and other media outlets regarding the impact of eBay’s boycott of Google.

Other analysts from Bear Stearns, Canaccord Adams and other Wall Street firms were also in attendance.  Additionally, highly influential eBay community members were attendees including Mike Enos of Platinum Power Seller, Skip McGrath of Auction Sellers Resource, Kerry Murdock of Practical eCommerce, Phil Davies, CEO of Tias.com and David Hardin, PeSA Board Member & CEO of Shoetime.  The event really brought together some key influencers in the e-commerce world at a very important time.

As for the actual panel discussion, the session lasted approximately 60 minutes, including 15 minutes of questions and answers. Topics ranged from how to optimize keyword campaigns, to the best ways to drive traffic, to choosing a shopping cart platform. Key takeaways included the following:

1. Diversify or Die – Successful online merchants must leverage multiple online channels. “eBay is a great starting point, but if you’re serious, you need to have your own Website,” said Garriss. “On Amazon, they give you buyers, but they are not really your customers. At a certain level, you want to take control of your business.”

2. Analytics are Key: All panelists agreed that you must closely track key metrics to understand success or failure in real time. “What you really need to know from analytics is, ‘What does it cost to acquire a customer?’ – at the platform, keyword and SKU level,” said Espenes.

3. Test, Test, Test – There are many advertising platforms besides Google that merit experimentation for driving traffic to a merchant’s site. “You have to test,” said Smith. “Test SEO. Test AdWords, MSN AdCenter, and Yahoo Search Marketing. Test Amazon. You have to see what channels work for you.”

4. The Customer is King – Panelists agreed that the lowest hanging fruit for driving sales is leveraging a merchant’s existing customer base. “You can always buy traffic, but drive traffic that converts. The number one way to convert is to motivate your existing customer base,” said Garriss.

5. Trust is a Must – In order to convert shoppers to buyers, merchants must convey their trustworthiness, else be forced to lower their prices to compensate for a lack of awareness and trust. “Merchants want to compete on a non-price basis. You can build a brand, but it’s extremely expensive. A third-party endorsement of your business from a trusted source helps merchant bridge this trust gap” said Woda.

If you were not fortunate enough to join us, Ina Steiner conducted interviews with some of the panelists and participants during the week of eBay Live. You can check them out here:

Brian Smith -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007f

Jonathan Garriss -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007e

Ralf VonSosen (author of the Infopia book “The eCommerce 2.0 Handbook” -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007d

 
Pictures from buySAFE’s lunch panel:

http://auctionbytes.com/cgi-bin/ebaylive2007/index.pl?0&2&1

http://auctionbytes.com/cgi-bin/ebaylive2007/index.pl?24&2&2

Lastly, a big THANK YOU to all the panelists and to the over 100 attendees at this terrific event.

buySAFE News: buySAFE Forms Strategic Partnership With Leading Merchant Account Provider e-onlinedata

This is a great partnership for buySAFE as e-onlinedata is a major player in the payments space.  They are the first of many future payment company partners we will be working with to cross promote our products.  buySAFE is a very natural value add for payments companies as we provide a major impact on merchant sales (via increased conversion) and since our core service is free, it’s easy to bundle with a payment companies suite of services provided.

We’re thrilled to partner with e-onlinedata and we’ve been quite impressed with their team and their product offerings for merchants.

Internet Retailer & Bear Stearns Internet Conference Takeaways

Most of the buySAFE team is now back from last week’s Internet Retailer Conference.  Some of us, like me, just spent the last two days in NYC for the 18th Annual Bear Stearns Technology/Communications/Internet Conference. I was a speaker yesterday on the Safety Panel.

I wanted to share a few important insights from the two conferences.  I’ll share a bit more following the eBay Live conference this week. 

Internet Retailer put on a terrific conference. The number, variety and quality of both the exhibitors and the merchant attendees were exceptional.  This was the best eCommerce conference I’ve attended all year.  It’s a great conference for large, professional, multi-channel online retailers.  So that’s you -- you should try to attend next year. The depth and quality of the content is much higher than one typically finds at an eBay conference and the caliber of the attendees there makes it a much more productive conference for everyone involved. 

The Bear Stearns conference provided a great overview on the key trends across the internet.  Internet advertising continues to grow at an astounding rate and it sounded to me like the trend toward CPA (Cost-per-action) vs. CPC is really picking up steam.  CPA-based advertising is a new form of advertising which merchants are clamoring for because it takes all the risk out of marketing (they pay  % of sales vs. a flat fee for impressions or clicks).  Given that advertising is the riskiest, yet most important, spend a merchant makes, turning this into a truly pay-for-performance model where advertisers are paid as a % of revenue generated will be a great thing for merchants. On the trust and safety front, our panel discussed the trust issues all online merchants face.  That online shoppers are nervous and that to avoid missing major sales opportunities, online merchants need to aggressively address the two primary concerns online buyers have when buying online – 1) will my information/data/privacy be kept safe and 2) will this merchant be reliable and trustworthy and deliver as promised (will I have a smooth transaction and get what I paid for?). Tom Cuthbert from ClickForensics also provided some great insights into the click-fraud issues the search engines are facing.  All of the engines are taking it seriously and trying to minimize it as much as possible, but that overall, the search engines are not making much headway in reducing it.  In fact, in many cases click fraud is actually growing.

Scot Wingo of Channel Advisor, Rodrigo Sales of Vendio and Jonathan Garriss and Joe Cortese of PeSA all participated in a panel yesterday afternoon. The focus of the discussion was eBay and the universal message was that eBay isn’t innovating fast enough and the changes they are making (like raising listing fees) are net harmful to the marketplace. According to Jonathan/PeSA, the primary issue eBay continues to face is buyer confidence. Everyone seemed to agree with this.

Discover the Secret Sauce of Multi-Channel Selling Success – Join Us Next Week at eBay Live!

As I mentioned in a post a few weeks back, buySAFE will be sponsoring two big events next week during eBay Live, and I wanted to share the details for both.

First, on Friday, June 15, buySAFE is hosting an invitation-only luncheon at one of Boston’s finest waterfront restaurants – Anthony’s Pier 4 (140 Northern Boulevard, Boston, MA). Titled Discovering the Secret Sauce of Multi-Channel Selling Success, this panel discussion will feature executives from some of the top companies in the space, and will provide attendees with crucial insights into traffic driving, infrastructure/fulfillment, and conversion issues faced by multi-channel merchants. The panel will be comprised of:

MODERATOR

• Ina Steiner, Editor of AuctionBytes

PANELISTS

• Bjorn Espenes, President and CEO of Infopia
• Jonathan Garriss, CEO of Gotham City Online, Executive Director of PeSA, Managing Director of ECMTA
• Steve Woda, Founder, Chairman, Senior VP - Product & Strategy of buySAFE
• Brian Smith, Author of ComparisonEngines.com, Founder of SingleFeed

Space is extremely limited for this event, so please RSVP immediately to ebl2007@buysafe.com if you'd like to attend.

In addition to the luncheon, buySAFE will again be the title sponsor for the Seller Meet & Greet event on Wednesday, June 13. This year’s event will be hosted at Ned Devine’s Irish Pub in Faneuil Hall’s Quincy Market building from 7:00-11:00 p.m., and is a great opportunity for sellers to meet and trade stories from the trenches. The event is open to all sellers, and will feature free appetizers, door prizes and more.

We hope to see you all there!