eBay Alternative Wigix Goes Live By Michelle Megna
April 29, 2008
A startup online marketplace, Wigix, is going live today with the ambitious goal of taking on eBay by offering a stock-market style method for buying and selling goods. Instead of auctions, Wigix.com, the "Want It, Got It Exchange," will use a price-matching system similar to that of Nasdaq — buyers and sellers list desired prices for merchandise and the system will alert them when they match up. Or, buyers can offer an alternative price, with both parties having the option to accept or reject the bid.
The market model makes sense for the company, as Wigix is being launched by CEO James Chong, formerly in charge of Charles Schwab's online trading platform, and his team includes other former Schwab executives. Chong believes this method works better for selling commodities, such as game consoles and such, as opposed to the auction format.
"When eBay was founded, it was for collectibles and unique items, say your grandmother's vase, and the auction format worked," said Chong. "But if you look at eBay today, there are mostly primary market SKU-able items, a SKU meaning stock keeping unit, something that has multiple copies, and the auction format isn't good for that so we've evolved to a Nasdaq bid-ask model."
Another benefit, said Chong, is the Wigix pricing structure. "With our model, people will list all their inventory because it doesn't cost them to list it, and it stays there with no fee until the item is sold," he said.
Wigix wants to dethrone eBay using bid-ask selling model, better search and lower fees.
Price and Search Advantages Wigix charges no insertion fee, and any transaction less than $25 is free. Buyers are charged $1.50 when a purchase is made, but the seller pays depending on the amount, with a decreasing-sliding rate: $1.50 for a sale between $25 and $100; $1.50 plus two percent of the amount above $100 for a sale between $100 and $1,000; and $21 plus one percent of the amount above $1,000 for a sale of more than $1,000.
Sales on the site, for now, are handled through PayPal, and Chong said that there is a utility that eBay sellers can use to import their inventory, along with plans for custom storefronts this summer for Power Sellers.
The Wigix team also believes its search function is better than eBay's, providing results that are specific to the item, as opposed to eBay's, where results can often be unwieldy and include storefronts with unrelated products. There will also be product specs on the results page, as well as a Q & A forum, for instance, where people can post queries for members who already own the product.
Also on the agenda for Wigix is community building and revenue sharing. When a member adds a product description into the Wigix catalog, he or she will receive a five-percent commission of transaction fees garnered for that site.
Another way members can get a slice of the profit pie is by becoming a "category expert." If you oversee a particular commodity, and vet the submissions to the catalog, you get one percent of the company's fee and ad revenue. However, these members must be active, by either buying or selling, blogging or posting in forums on a weekly basis.
During the public test phase, the company hopes to recruit category experts and "SKU owners" to build the inventory, now at about 500,000 items, as well as the membership. The company is hoping to court and garner feedback from eBay Power Sellers and, naturally, to grow the general membership. Formal launch of the site is expected in late summer or early fall of this year.
Michelle Megna is managing editor of ECommerce-Guide.com.
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