This post is by A Crowded Space from A Crowded Space
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eBay is one of the most famous marketplace success stories. It started as a simple auction site with listings and users bidding on the items. This was great for easy price setting and unique items, but it was inconvenient for more mainstream items with multiple units available. Then came the introduction of the “Buy it Now” button, which at the time was a big change and strong innovation. The Buy it Now button dramatically accelerated growth. Part of this is simply because it lowered the customer effort to buy something. It went from guessing on an appropriate bid and monitoring the item and auction, to simply clicking a button.
Ecommerce companies have long known the power of the “buy now” button. Amazon even patented the “1-click buy” button.
I’m a big believer in lowering customer effort. It pretty much always works to drive more demand and expand the
. The convenience factor is something that traditional economic theory has never fully understood. Economic theory would suggest that sellers will go to the platform that offers the highest price for their goods. As it turns out, that’s not really true.
Take a look at a StockX – just one of the current high-flying secondary sneaker marketplaces. If I own a pair of sneakers that is listed on the platform, I have this handy Sell Now button.
This is an awesome button to enable. I did an eBay search and there are plenty of people looking to sell these at $199 or more, but they will certainly have to do more work and more waiting in order to get that amount. Is it really worth it? Where would you sell your stuff?
1) The brightly lit, reputable store that guarantees payment, guarantees it quickly, and is always willing to make an offer. May make less $, but will be safe and convenient.
2) The shady bazaar where you must beware of scams, must haggle with buyers, and have no guarantee of any sales. May make more $, but will be shady and inconvenient.
The notion of Sell it Now is not entirely new. Priceline was one of the first innovators here – let me name my price for travel (a bid) and any airline or hotel can sell their inventory immediately if they hit the bid. It’s also been a big driver in some labor marketplaces. Lyft and Uber are effectively Sell Now labor marketplaces, any driver can hop on and get work right away.
The interesting thing to me is that we’re now seeing more of these Sell Now marketplaces for goods. Outside of the good ol’ fashioned pawn shops, there aren’t that many opportunities for consumers to sell their goods instantly and conveniently. Now we’re seeing some excellent online marketplaces enter this space at two opposite ends of the spectrum.
1) Sneakers – GOAT + StockX
2) Houses – OpenDoor + Zillow (the Rich Barton Returns edition)
Stay tuned… there will be more success stories with this Sell it Now model.