Bitcoin Forum

I recently wanted to make some purchases to show my good faith in bitcoin from the marketplace, or bitcoin retail online stores.

However, it has come to my attention that pretty much everyone operating a "bitcoin shopping cart" service is merely offering the same items for sale on newegg or amazon or insert big box retailer here, and are charging 15-20% markup (not even including shipping). This is insulting and I would like to point out to everyone else who are bitcoin enthusiasts that we not support these sites taking advantage of people.

I support bitcoin but I will not support ripping people off in its name.

For example just go to www.bitporium.com or any other bitcoin retailer you know of. Look at the prices of items from high end to low end and then compare the prices on google shopping or what have you. As long as "retailers" accepting bitcoin are going to operate in this manner, it isnt going to help bitcoin grow at all, if anything it will shrink the potential user base who'd buy items online.

I know everyone has to make their fair share, but current trends are blatantly egregious in my opinion.

(buy a computer case on bitporium for $70 + ~20$ shipping that bitporium buys from newegg for 40$ and ships it to your address instead of theirs)

If you don't believe me, just go add items to your cart and look at the totals before check out, you will be surprised at what some of these "bitcoin community helpers" are attempting to get away with.

just find any item and it takes seconds

http://img94.imageshack.us/img94/502/bitporiumpleasestopripp.jpg (http://imageshack.us/photo/my-images/94/bitporiumpleasestopripp.jpg/)

Uploaded with ImageShack.us (http://imageshack.us)



newegg cost: 105$ free shipping
bitporium cost: 147.259$ + 19$ shipping

almost closing in on 50% markup!

That's why I'm an advocate for businesses to sell mainly indie items when accepting Bitcoin. There would be no inflated prices because their item(s) sell for the same price whether they accept fiat or Bitcoin. In fact, they could easily sell their indie item at a lower price point if paid for with Bitcoin, and still recognize a nice profite.


Or you could start a store called Cheaper with Bitcoin (cheaperwithbitcoin.com--steal this idea) and set it up to sell other peoples used stuff so that they can start collect Bitcoin into their wallets.

In order to overcome this, we need good producers to make goods and offer them in btc. This can be a little hairy for them, though because they would probably buy their inputs in their local currency, and then it's hard to know what kinds of things people people in the btc economy would want to buy.

My wife sells coupons on ebay, but I'm not really sure there are enough couponers who also use btc, so we haven't even bothered to offer them.

That's what I am building. My GF crafts jewellery and I plan to sell them online... If that works I'll try to convince friends to sell their works too.

The issue is for non-techies to set up the store front-end and btc compatible carts. And in the end it's the non-techies who are more likely to sell hand-made or interesting things

Exactly!


Example: This one-of-kind oil painting of a chicken is for sale for $120 but only 10 BTC (approximately $100) if you order today:


http://3.bp.blogspot.com/_5tIvW9350EM/TAavN9Ezp_I/AAAAAAAAAko/aSErpStEs1E/s1600/onwardlg.jpg


Every single stand-alone shop can now enjoy more traffic to their site simply by accepting Bitcoin and listing their site here: https://en.bitcoin.it/wiki/Trade

I agree with the point of the original post, but it might be a little short sighted - those drop-shipping services are the easiest thing for someone to set up, so doubtless a bunch of techies are trying to make a quick buck

genuine retailers otoh, aren't usually techy enough to get involved yet - although i have seen some promising progress on open-source plugins for webshop CMSs like OpenCart! Once they're released and trusted I think the 'genuine retailer' market will expand very quickly.

If you want to support BTC, I recommend bitbrew - I bought coffee from them internationally and it's a great service providing really really good coffee!

Bitbrew at http://bitbrew.net/ is a perfect example. I think bitaccordion.com is still available.


http://ny-image2.etsy.com/il_570xN.125192418.jpghttp://bitcoincloset.com/image/cache/data/Bitcoin-Hero-Black-210x210.jpghttp://farm6.static.flickr.com/5315/5897030158_4472118008_s.jpg

There's also an issue of currency stability for resale of items with a real cost priced in fiat. Over the last 4 hours the median price has been ~10.92 USD/BTC with a standard deviation of ±0.41. That's about a 3.75% variation over just four hours and this in a market that is substantially more stable than it ever has been. Think about it - 3.75% market movement in about 4 hours comes to 0.938% per hour. If a merchant sells products 24 hours a day on the internet and liquidates to USD once per day (not an unreasonable timeframe really) then they could potentially incur 0.938% * 24 = 22.527% loss - and that's without breaking out of reasonable bands in the relatively stable market we've got today.

We've also seen that BTC is prone to spikes and crashes that could destroy small businesses in an instant. Imagine as an individual seller that someone buys your shiny new 6990 off of you for 32 BTC back when 1 BTC was 31 USD. This is a big purchase so naturally the buyer wants escrow, which is reasonable. By the time escrow clears you're at $10 per BTC and you've now sold that card for $322.58. Now imagine that times a thousand and understand why businesses HAVE to charge 20% markup or more just to offer product in bitcoins.

If you have any cost in USD you MUST mark up your product significantly to at least cover your costs in case of market crashes. Even then you still lose money in the event of a 31->10 crash like we saw earlier.

OP- Get off your high horse.

Vendors who offer the same goods as other retails are not selling volume in the gazillions. Large retailers can sell at razor thin margins, and I find it amazing you would compare a start-up to NewEgg? Of course small operations will cost more. They allow Bitcoin payments, however, and that is their competitive advantage. Over time, you'll see prices come down and larger retailers take over with Bitcoin.

"Price gouging" is a ridiculous concept. If the price is too high, don't buy it. If you think it's so super easy to sell at lower costs, then start a store yourself!

This is an excellent argument for not accepting dollars either.

My last customer of the day purchases a $100 item in my B&M shop. My profit margin was only 5% on that item. I close the store, taking all my cash home. That night, the market collapses halfway around the world, and now my dollars are almost worthless come morning. I knew I should have accepted Bitcoin.

Just had a thought: Merchants wouldn't need to hedge against 24 hours of movement if they had something that I don't think currently exists... If one of the exchanges or perhaps a third party created some kind of merchant services API that automatically sold the incoming BTC at the current market rate the instant they hit 6 confirmations then merchants would only have to hedge against ~1 hour worth of market movement.

At present you could probably hack something together using MtGox's merchant service API and their trade API (basically make a bot that checks BTC balance and sells if > 0) but a polished product not requiring programming skills would be much better. Better still would be a similar service run directly by the exchange themselves... Is MagicalTux or Jered around?  ;D

This is the nice thing about what bit-pay.com is working on.

Check out my site:
http://www.heidijosboutique.com

You can make a purchase just like on any other e-commerce site. But when you get to the checkout page...you can choose between paying with PayPal or paying with Bitcoins.

Same price either way.

bit-pay is working on making this easier for all merchants...

My next upgrade to the page will be choosing an icon on the front page to get all of the values in Bitcoins instead of dollars, or vice versa.

What if?

QVC meets BTC: http://www.qvc.com/qic/qvcapp.aspx/app.nav/params.class.P722.level.3/walk.yah.0100-G249?venue=cgen?ref=GAS&cm_ven=googlePAID&cm_cat=N-As+Seen+On+TV&cm_pla=Infomercial+Products&cm_ite=sXuaUfCOW_8296815540_infomercial%20products&cookie=set


http://images-p.qvc.com/is/image/a/63/a211463.001?$usmedium$

There's an important distinction that needs to be made. Because the currency you used to purchase this product and the currency you accepted for its sale are denominated in the same units, as long as you bought the product for $95 and sold it for $100 you still made your $5 profit. A more realistic example of the dollar's crash hurting your business would be that your remaining inventory of $95 products are no longer worth the $100 you must sell them for to make a profit. Edit 1: Scratch that, reverse it. A crash of the dollar would make dollars worth LESS relative to your product, so if the dollar's value were halved you could now sell your $100 product for $200 - the inflationary problem would actually INCREASE your profit margin.

The problem I'm speaking of is that we've introduced an additional source of volatility between the transaction and the actual profit. From a bookkeeping perspective I haven't actually turned a profit until your USD denominated cost is canceled out by a USD denominated income. if the $100 worth of BTC I take from you is worth less than $95 after the hour or so it takes to turn BTC back into USD then I've made a sale at a loss.

Edit 2: What I noted in Edit 1 is actually related to a real-world occurrence that I've noted and complained about many times. Gas station A is across the street from gas station B. B's tank of 87 octane runs low so they buy more gas and find that the price from their supplier has increased. Naturally they raise their prices to accommodate. A notices that B can now demand more dollars per gallon so they raise their price to match - despite the fact that the gas sitting in their tanks was purchased at the lower price. It seems to me that A could make a killing by NOT raising their price until they have to, or at least not raising their price as much, but they never do. The gouging would be canceled out if gas prices went down again, forcing A to sell at a loss, but the prices NEVER GO DOWN (at least that's how it feels)

Thank you for the recommendation, I will most definitely make a purchase if they offer an organic/fairtrade coffee. I don't touch the stuff but my wife does (and thats what she drinks).

Sorry for my obscure example. My post is clearly for a very different argument, now that you have brought it to my attention.


http://1.bp.blogspot.com/-aJIHzVHsjBk/TjGtvCsVc3I/AAAAAAAAAkc/qfvNr-GVWKQ/s1600/BrainFart.jpg

Does your wife like clothes?

http://www.heidijosboutique.com

 ;D

LOL love the image ;D

I still think someone should get MagicalTux or Jered over here to talk about implementing an auto-sell feature for merchant accounts.

They've got a range of fairtrade/organic actually - I'm the same way!

(That's why I sell tobaccos without all the nasty extra chemical additives  ;D )

go here: http://loja.pmakordeoneditora.pt and buy some music. I promise they are not retailers. In fact i dare you to find a price comparison from any other shop for any of the tracks for sale there.  ::)

Just one thing: The prices are in euros and the conversion to BTC is done real time when you make the payment, therefore your argument that things are overpriced when the price is marked in bitcoin is not valid here lol
Oh, and don't tell me €2,50 is expensive for a music track, beatport sells them for the similar prices(€2,57)

Now, put your money where your mouth is. You'll make an indie label very happy if you buy at least one track :)

You told me not to but sorry, I have to.

2.5 Euros is expensive for a music track.  A single track.  If it was an album then it would be cheap.  I regularly buy music online for 99 cents a track or $10 an album.  Most of what I have bought is from independent non-riaa groups.  I would indeed go without at nearly $3 a track for music. 

I also, when going to concerts of smaller groups, have bought their entire back collection of CD's when they price them below $10, otherwise at $10 or more I buy just what I am sure I will like.   A Cd costs $1 to make or less for most groups.

2.5 euros ~= 3.61 US dollars... That's... Well that's 3.61 times more than what iTunes charges, on average... You must have big brass ones to walk into a thread where folks are complaining about 15-20% markups and push something at a 361% markup while calling it reasonable or fair... I'm kind of speechless right now...

So, go give your money to apple, I'm sure they need it more than any of the persons that have shops that accept bitcoin... and while you are at it, ask them to accept your bitcoins.

Unlike apple, that store has to pay 23% of VAT(€0,47 from those €2.50). I said it before and i say it again: Beatport charges €2,57 for each track ,VAT included. From those €2,57 they give the artist around €0.25...

And using an analogy that will fit very well in here: you are comparing apples to oranges. Comparing a shop that has a catalog of millions of tracks against one that has 40 or 50 tracks.

One more thing: The shop where i sent you PAID a bounty (https://bitcointalk.org/index.php?topic=31554.0) of $150 to develop the module that accepts bitcoin payments and gave it to the community. What did apple ever gave to this community?

Don't forget about www.bitcoinworldmarket.com

We don't do Amazon, newegg etc... We have our own vendors and many of our prices are comparable to that which you can find on Amazon or the like. We also have a decent selection of items you can't get on amazon.

Cheers,

Jonathan

Wasn't comparing you to apple, necessarily, but the fact is they are one of, if not the largest merchants in this particular marketplace and whether or not it's by me, you WILL be compared to them. I understand 23% VAT is standard in your jurisdiction , which raises the price to about $1.23 or about €0.85. We can all find a "comparably priced" item marked up to insane prices no matter what product we're trying to sell. The fact that someone else is gouging doesn't mean you're not - your price is to be compared to industry standard prices, not compared to other gougers. 10% off a price that's 300% too high is still gouging.

Edit:
For example - http://www.memory4less.com/m4l_itemdetail.aspx?partno=HD-583X-ZNFV&itemid=1462346931&rid=fd_10
ZOMG only $418.62 for a 5830! That's $104.65 off their list price of $523.27!!! Or, y'know, $300 more than you'd pay from newegg...

Hey, you might think the shop is mine, but it isn't. I just worked on it.

I don't set the prices, the record label does, and my first post was just to say that the prices aren't more expensive because they can be paid with bitcoin. Other users paying with ATM, bank transfer or paypal get the exact same prices. (note to self: tell the record label owner to give a 10% or 15% discount to people who pay with bitcoin)
As the complaint of the OP was about people pricing stuff in Bitcoin and pricing it more expensive for it, it was just a way to show that it's not always the case.
The reality is that we can't compare the prices on the music shop with itunes prices because we can't buy those tracks on itunes. If we could, then the comparison would be correct.

On a completely off-topic side note: People have no idea of the costs involved to maintain a legal digital downloads shop in Portugal, e.g.: just for having 30 seconds samples for the tracks the label needs to pay €100/month to the Portuguese RIAA equivalent, go figure, wether they sell or not. Add server costs, developers, etc, and it's a huge cost for an indie record label that has a tiny catalog and therefore doesn't sell much  :( And yet, the owner paid those $150 for the module to be built and opensourced, even if he wasn't expecting that much business from bitcoin users, just because he thinks Bitcoin is a wonderful thing than can change the world we all live in. And guess who introduced him to Bitcoin: me.

You all might think I'm an a-hole, but i really care for Bitcoin. And the only way to see it succeed is if small shops start accepting it, because you won't see the big ones doing it in the next years. I hope I'm wrong in this prediction, but I suspect I'm not. :(

Sorry about the long post and about anything else I might have said that offended any of you guys/girls.

Cheers!

No, I do not give my money music money to Apple.  My last purchase happened from watching a bitcoin video and liking the music:

http://fadedpaperfigures.bandcamp.com/

The majority of it has gone to local groups buying their CD's in person.  Most of them charge $10 a CD or less.  

And your example, beatport giving the artist 1/10 is pretty bad, there are many outlets that give the artist 1/2 or more.  And a bunch of artists do it ALL on their own, keeping the vast majority of the money.

Bitcoin would be perfect for them.

+1

This sucks! I can't add anything to this post to make it better, nor supply an image. Good Job, psy.

Nah, I don't think poorly of you or anything, I was just pointing out some discrepancies in your statements, that's all. I do agree with your base reasoning though, that we need to get more mom'n'pop type places accepting bitcoin. Sadly I don't see it happening at the big stores for some time either.

I'd just like to point out that the excuse that stores have to inflate the prices if they take Bitcoin to handle exchange volatility is completely illegitimate.

Unless, that is, they refund some of your Bitcoins when the exchange rate goes up in between when you send the coins and when they sell them on an exchange.

That excuse of "well, in case it goes down" is just another way of saying, "We're going to guarantee that we make our profit -- and we're going to do short term speculation where we reap any and all rewards, but we'll force you to pay us extra in case we lose the bet."

I opened this thread wondering if I should mention BitBrew or not. I felt as if I might be trying to inject it into too many posts. Imagine my surprise to see others bring it up!


This is a good market strategy for any business, not just bitcoin based ones. I ran a brick and mortar store for ten years trying to provide a no-frills service, competing on price, cutting every ethical corner I could find just to offer a better deal than the guy down the street. In the end, I sold the business because I couldn't make ends meet anymore and was falling farther and farther into debt; no matter how low I set my prices, there was always someone else who was cheaper. Once I got out and could look back on it from the outside, I decided that it is much better to offer a high quality product for a fair price. With BitBrew, I may not have tons of customers, but they're obviously loyal ones. Thanks guys!

π > e (T-Shirt idea)

I like your business model--linking all three sites. Is the bitsquirrel your design? I'm thinking about having Martin tool it on leather, is why I ask.

Actually, I put the image and link for Square²Wear as a favor to Gabriel (https://bitcointalk.org/index.php?action=profile;u=11152), the representative of that company here on the forum. I think I may remove it, however. This isn't the first time someone has thought it was one of my sites and I don't want to mislead anyone. BitBrew and The Bitcoin List are mine, though.

Because the prices will both rise and fall then over the longer term (e.g., week, month or quarter, at worst) these fluctuations will in most instances cancel each other out.

If this is something where there is absolutely no margin for fluctuations, the Mt. Gox redeemable code (voucher) gives the merchant the ability to trade on the proceeds instantaneously, though this requires the customer to use a Mt. Gox account rather than the bitcoin client. This voucher feature is currently available already but for the API they are looking for beta testers yet if I remember correctly.

Additionally, when volumes become large enough there will likely be easy and inexpensive methods for lessening this risks similar to how forex protections are available.

So you mean it's a method for eliminating risk and maximizing profit? That... actually sounds like everything that every successful business does... ever...

Don't forget http://CoinedBits.com (http://CoinedBits.com). High quality unique product at an amazing price.

And check this out. It looks like arstechnica.com is one of my customers :-).

Here is todays article:
http://arstechnica.com/tech-policy/news/2011/08/symantec-spots-malware-that-uses-your-gpu-to-mine-bitcoins.ars

If 1,000 merchants offer 10,000 products/services and keep their BTC prices 10% lower in value to their USD, EUR< etc. prices, then wouldn't that create a BTC buying momentum that would raise the BTC/USD exchange rate?

After all, if we're talking quality vendors and not quick-buck scammers, new people (not miners or current BTC holders) would want to buy these things and so they would try to buy bitcoins in order to purchase these wanted items/services.

In the long term, offering a discount for BTC payments, is profitable, by expanding the market for BTC, and therefore create a buying pressure raising the exchange rates.

I do understand the businesses that want to take no risks (I've taken quite a few in my business life, and they did hurt), but if you do believe in BTC, you have to share some of the risk with your customer. They (the customers) will be hurt in the end and they will have a sour feeling if BTC/USD rises 20% from payment time to delivery time. You (the business) will be hurt if BTC/USD falls 20% from payment time to cashing in time.

And yes, I am thinking of starting a business selling food stuff for BTC, and my main concern is how to get prices lower than Walmart.

What about selling the food stuff that Walmart doesn't carry?

What about selling the food stuff that Walmart doesn't carry?
[/quote]

I was actually getting to that same conclusion...

I was actually getting to that same conclusion...
[/quote]

Next time, post faster. Or you could have mentioned selling other stuff that Walmart doesn't carry like...let me think for a second...I almost have it...here it is...Stuff Made in America.

btw, i wasn't dissing ur post, 3phrase--just wanted to drive my point home


http://images.wikia.com/phineasandferb/images/4/44/Super_food_stuff_mart.png

The existing APIs can do this.

That's why I sell my wick for bitcoin!

Priced the same as, or cheaper than, my US dollar retail price.

get off your high horse, All I did was point out many bitcoin stores are blatant ripoffs when held in comparison to the free market. There is already a perception that bitcoin is a magnet for scammers and operating a "service" which charges asinine prices and little to no service in the name of bitcoin is not exactly helping. There is absolutely no reason to treat consumers in such a manner unless one has absolutely no ethical understanding or morals. Are morals a requirement in the free market? No. But it won't get consumers beating down your door trying to give you money either.

The comparison to the store in the OP and newegg was because most likely he is just ordering from newegg himself and drop shipping it to the ordering address instead of his own, NOT comparing newegg and his store as a whole.


Consumers have rights and your post makes me question your general sanity if you are adverse to said rights. I would expect a 6%-7% markup to get his beak wet at most but every single item is gouged ridiculously. Especially when held in comparison to other bitcoin merchants that have stepped forward in this topic so far and advertised their services! There are great merchants out there and at the end of the day we need more of them with more business.


Merchants don't need to hedge any bets on the cost of Bitcoins as mtgox merchant api instantly transfers USD$ at the current rate with no buy or sell trade orders. If you are a merchant and accepting BTC that way, there is absolutely no way to lose money on exchange rates going up and down as you get the locked in rate at the time of the transaction. Watch an explanation from mtgox on the bitcoin show here if you have not heard of this yet: http://www.youtube.com/user/vlogwrap#p/u/7/KJAiGcKFtuE

This is good information, but it is new.  Not everyone knows or has the ability to do this yet.  This should allow bitcoin shows to have lower prices long term as they can count on a pretty close dollar value from the sale.  I do see prices lowering slowly for bitcoin vendors and when we have stable prices and people are not trying to sell the hottest video cards that are in short supply we should see some good deals.

I'm offering 25% discount on current exchange rates for anyone who pays with bitcoin on my eBay store (including shipping).
I've had no interest so far - I think anyone who owns bitcoins calculates their cost (ie time) in buying bitcoins and makes a decision based on that. Even a 25% discount doesn't represent the true value of the bitcoins to the owner of the bitcoins. Anyone using a 1:1 exchange in their pricing has no chance.
Bitcoins are worth more than dollars/pounds/euros even at the current exchange rate (I can just use my $£ - why waste my bitcoins?).

(If you want a link to my eBay shop message me or see my post in the trading section)

I dont know that anything is needed,a fool and his money are soon parted. These bitcoin markets cater to socialists and criminals. Over the long run, this forces bitcoin to collapse in value so its no big deal....the bitcoins are still there, and new buyers step in. If they repeat the same mistakes...bingo.

Even if the items were sold for the same price, all that does is make the exchanges richer. You would be really paying for the items in dollars in the big picture, but also playing an expensive game of currency conversion. Fighting against the dollar is absolute nuts.You got little joe talking about how to trust Jim over a game of trading bitcoins when both of them are dependent on the US dollar. The only way to combat this imbalance is to subsidize it...with little Joe excited about sticking it to the man. Eventually he loses interest after loss after loss. Gox nervously holds onto an increasing stack of worthless bitcoins since effectively, there is no liquity for a mass sale....its like China holding US dollars, the more Gox holds the more Gox will cause the market to collapse later, but if Gox converts bitcoins to dollars, Gox is going to cause a panic and expose that the emperor is wearing few clothes.

Meanwhile little Joe is fretting over a US dollar collapse, when if it does there will just be a new strong dollar...meanwhile little joe is trying to reinvent the wheel...yeah he trusts person X, who he has no idea of who he is, but doesnt trust the US government with hundreds of thousands of soliders strong, with a open judicial system and lawmaking framework[saracasm].

They still have to mark up costs to pay Gox. The buyer gets to pay as well. They could just exchange US dollars, but I guess thats too hard ;-)
Then buyer says 'well I like to be confidential'...LOL, and I thought it was the bitcoin that was confidential, not the buyer..it just shows you what an easy target these buyers are.

And a big thanks to these buyers for driving up the maintenance requirements of the blockchain...like throwing rocks in a pond..'well look at that'.

+1

Nice looking site you have there. I do have one question. Are you from India? The reason I ask, is because I spent 3 weeks there back in 1990 touring the country. I loved India. My second wife was from India (can you guess why I was in India?) She's a good woman with two great boys. There lives are now completely different then if they didn't have the opportunity to come to America, thanks to me.

So open a store that's cheaper.  You'll help out the ecosystem and actually make bitcoins instead of spending them.  I'm being serious here, not trying to be a smart-ass.

Fixed it for you. :)

Thanks, wolftaur. Believe it or not, the way you fixed it is the way I thought I wrote it. I must have typed the f instead of the g, being that the keys are right next to each other, along with me having food on the brain when I was in brain-fart mode back then--even when I proofread it.


http://files.sharenator.com/ComputerFriendsFunny_Why_cant_people_in_real_life_be_like_sharenators-s400x400-160808-410.jpg

You'd actually be surprised how many people don't realize Wal-Mart sells food. O.o