The Company Ebay Tried to Kill
October 10th 2006 22:06
Ebay bought Half.com in 2000 and made plans to kill the company in 2004 by folding it into Ebay and having Half.com sellers auction their stuff on Ebay with the Buy It Now feature. Half.com sells books, movies, CDs, Video Games, Board Games.
Ebay makes more money on the sale of these items off of Ebay than they do on Half.com. The reason? First, sellers have to pay upfront fees on Ebay for listing items. Not so on half.com. They pay a flat 15% commission when their item sells and not a penny more.
The second advantage of Half.com is that it puts buyers at a huge advantage. On Ebay, when you’re a seller, you compete only against those who are selling your item. For example if you’re selling a DVD of the Patriot, you’re only competing with those who are selling a DVD of the Patriot at the same time you are. On Half.com as a seller you’re competing against everyone so your price needs to be set so low that you’ll get your buyer. So books sell for 10 or 20% of their value.
To Ebay, the enterprise really didn’t make much sense, because you’re dependent on what buyers pay and they don’t pay much at all. However, half.com survived because sellers wanted it and the buyers wanted it. While E-bay may not make much off of someone paying 75 cents for the DaVinci code, Half.com is the internet source for college students buying and selling their textbooks.
Had Ebay chosen to go ahead with plans to close the site, no doubt they would have lost a large amount of market share to Amazon, which has a similar (albeit less known service) attached to its retail listing called the Amazon Marketplace.
That Half.com survives is great news for media buyers. If you’re buying books, games, movies, or music, this is a site you need to know about and become familiar with. It is a bargain hunter’s paradise.
Ebay makes more money on the sale of these items off of Ebay than they do on Half.com. The reason? First, sellers have to pay upfront fees on Ebay for listing items. Not so on half.com. They pay a flat 15% commission when their item sells and not a penny more.
The second advantage of Half.com is that it puts buyers at a huge advantage. On Ebay, when you’re a seller, you compete only against those who are selling your item. For example if you’re selling a DVD of the Patriot, you’re only competing with those who are selling a DVD of the Patriot at the same time you are. On Half.com as a seller you’re competing against everyone so your price needs to be set so low that you’ll get your buyer. So books sell for 10 or 20% of their value.
To Ebay, the enterprise really didn’t make much sense, because you’re dependent on what buyers pay and they don’t pay much at all. However, half.com survived because sellers wanted it and the buyers wanted it. While E-bay may not make much off of someone paying 75 cents for the DaVinci code, Half.com is the internet source for college students buying and selling their textbooks.
Had Ebay chosen to go ahead with plans to close the site, no doubt they would have lost a large amount of market share to Amazon, which has a similar (albeit less known service) attached to its retail listing called the Amazon Marketplace.
That Half.com survives is great news for media buyers. If you’re buying books, games, movies, or music, this is a site you need to know about and become familiar with. It is a bargain hunter’s paradise.
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