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Author Topic: Newegg Needs to accept bit coin.  (Read 3226 times)
dsp
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July 02, 2011, 03:08:54 PM
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http://www.newegg.com/HelpInfo/OverView.aspx?SectionID=89&SubjectID=176&ShortDesc=Payment

I'm going to send them a email requesting they add bitcoin.

Any thoughts before I do.
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zybron
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July 02, 2011, 03:12:04 PM
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It would be awesome if they did, but I'm not going to hold my breath.

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July 02, 2011, 03:22:43 PM
 #3

No, I agree, make the request. In fact, I would suggest you gather all the necessary details that you use, like the contact info and a short message and post it back in this thread or another. Maybe if there are enough requests they will take it seriously.

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July 02, 2011, 03:55:34 PM
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I highly doubt they're going to consider it until the market is more stable or rising. As of now buying or accepting bitcoins is quite a gamble. Your best bet is going to be in a well laid out explanation of what the currency is and a well written list of logical reasons as to why it would be beneficial to their company. You're going to have to make the market sound good. The important thing is you get a petition with as many people as you can though, there is always safety in numbers.

Anyway, goodluck. I hope it one day happens.

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July 02, 2011, 04:55:35 PM
 #5

there are a few sites that allow you to buy from newegg using bitcoin.. but yeah they should take it but good luck with that.

A lot of venders arent satisfied that the bitcoin has stabilized in price and that makes pricing things a bit, tricky.

Do you think newegg would have honored purchases during the mtgox crash?


anyways there is bitspend.com and bitegg.net which allow you to use your bitcoins on newegg

mooo for rent
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July 03, 2011, 03:47:52 AM
 #6

It would be great if Newegg supported bitcoin.  Especially for international orders.
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July 03, 2011, 04:31:19 AM
 #7

Here's an intermediary service:

http://bitspend.com/

And here's a way to buy Newegg gift cards with BTC:

http://bitegg.net/
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July 03, 2011, 04:35:59 AM
 #8

Do you think newegg would have honored purchases during the mtgox crash?
Of course they would. They would make a fortune. The value of a bitcoin fell.

I am an employee of Ripple.
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fascistmuffin
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July 03, 2011, 04:44:01 AM
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I don't know why newegg would want to accept bitcoin since the price is so volatile. If someone got a $200 item with bitcoin, and bitcoin price dropped a dollar or two, then they'd lose a good amount of money. Also, the shipping they pay in USD and they pay their suppliers in USD, so all the bitcoin would amount to is collecting fees from currency exchange sites since they have no way to use that bitcoin.
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July 03, 2011, 04:58:13 AM
 #10

the shipping they pay in USD and they pay their suppliers in USD, so all the bitcoin would amount to is collecting fees from currency exchange

Correct, until they have a place for those bitcoins to go (i.., employees, suppliers or investors) then they would likely be cashing out most of (or all of) those bitcoins that they've received.

However,
 - Credit card transactions can be reversed by the payment network.  Bitcoin payments are irrevocable.  This is attractive to a merchant -- especially a low-margin merchant like NewEgg.
 - Credit card transactions incur a fee.  Newegg probably gets about $0.98 for every $1 charged.  With bitcoin, the transaction fee is paid when the transaction is sent.  Even then the fee is fraction of the fee that the payment card networks charge.
 - Credit card transactions don't clear immediately.  The settlement process takes a day or two or more before NewEgg's bank has the money.  Bitcoin transactions "clear" in about an hour.

And ..
 NewEgg's competitors will discover bitcoin as well.  For NewEgg to compete, they may be forced to accept bitcoin or else lose those sales:
  - http://twitter.com/#!/ComputerGeeks/statuses/86467167851266048


Incidentally, there's another vendor offering NewEgg prepaid virtual gift cards as well:
  http://www.BTCBuy.info  (NewEgg, Amazon, Walmart, and Buy.com gift cards)







JoelKatz
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July 03, 2011, 05:00:58 AM
 #11

I don't know why newegg would want to accept bitcoin since the price is so volatile. If someone got a $200 item with bitcoin, and bitcoin price dropped a dollar or two, then they'd lose a good amount of money. Also, the shipping they pay in USD and they pay their suppliers in USD, so all the bitcoin would amount to is collecting fees from currency exchange sites since they have no way to use that bitcoin.
They would probably gain the ability to defer profit taking. Depending on some details about how they operate and how aggressive they're willing to be, there could be other tax benefits as well, especially for international corporation. They would take the risk bitcoins would drop in value, but they would gain the benefit of any rise in value. And, of course, they probably pay at least 2% in credit card fees, chargebacks, and so on.

I am an employee of Ripple.
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July 03, 2011, 08:30:05 AM
 #12

One thing that would help a lot is if one of the exchanges could offer BTC rate insurance. The way it would work is a company like NewEgg takes bitcoins and purchases rate insurance on them. If they accept them at the going rate, say 16BTC, the insurance might cost 1% of the dollar value and would allow them to exchange the BTC for USD at 90% of the rate they accepted them if the rate was lower than that for the entire following month.

For example say NewEgg accepts $500 as 31.25 BTC at an exchange rate of 16.
NewEgg pays a $5 to insure their 31.25 BTC.
In 30 days, NewEgg may claim their insurance any time in the next 30 days if the exchange rate drops below 14.4
If NewEgg claims the insurance, the insurer pays them 90% of the their money ($450) and takes their 31.25BTC.

This will cost NewEgg less than they pay for credit card fees. And it caps their loss at 10%. The insurance should be possible to provide cheaply, since you're only covering the drop in value.

You do need a stop loss provision. Something like: If the exchange rate drops below 80% of the rate at time of purchase, the insurance company can give NewEgg two days to either trade their BTC at full value (they get $500, they lose nothing) or give up the insurance. This allows the insurance company to cap their payouts at only a bit more than 10% of the insured amount, unless the exchange rate drops catastrophically.

I am an employee of Ripple.
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tc2606
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July 03, 2011, 08:33:24 AM
 #13

is there a list of "relatively large" sites that accept bitcoin somewhere
Duffman
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July 03, 2011, 09:10:18 AM
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I'd be happy with newegg making an official bitegg.net equivalent w/ a discount for buying the gift card.
eg @ $16/BTC, newegg wants .99BTC for a $16 gift card and sells the BTC immediatly if they don't want to hold onto it.  you think it might happen?
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July 03, 2011, 09:30:17 AM
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One thing that would help a lot is if one of the exchanges could offer BTC rate insurance. The way it would work is a company like NewEgg takes bitcoins and purchases rate insurance on them. If they accept them at the going rate, say 16BTC, the insurance might cost 1% of the dollar value and would allow them to exchange the BTC for USD at 90% of the rate they accepted them if the rate was lower than that for the entire following month.

For example say NewEgg accepts $500 as 31.25 BTC at an exchange rate of 16.
NewEgg pays a $5 to insure their 31.25 BTC.
In 30 days, NewEgg may claim their insurance any time in the next 30 days if the exchange rate drops below 14.4
If NewEgg claims the insurance, the insurer pays them 90% of the their money ($450) and takes their 31.25BTC.

This will cost NewEgg less than they pay for credit card fees. And it caps their loss at 10%. The insurance should be possible to provide cheaply, since you're only covering the drop in value.

You do need a stop loss provision. Something like: If the exchange rate drops below 80% of the rate at time of purchase, the insurance company can give NewEgg two days to either trade their BTC at full value (they get $500, they lose nothing) or give up the insurance. This allows the insurance company to cap their payouts at only a bit more than 10% of the insured amount, unless the exchange rate drops catastrophically.


bitoption.org, buy puts.

wolf902
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July 03, 2011, 10:53:49 AM
 #16

It's a request, worst they can do is say no. Their employees have to be running mining rigs etc. I'm sure they know they will have to address this sooner or later.

LOL Most of us at Geek Squad are running Rigs

http://i.imgur.com/KN8Dd.png (http://wolf902.triplemining.com/register)
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July 03, 2011, 11:39:39 AM
 #17

bitoption.org, buy puts.
It is effectively the same thing, but most companies would have a better time saying they need insurance to minimize risks associated with innovation rather than saying they need to buy options on an unstable market to hedge risks. But yes, the insurance is basically a put, but they would know ahead of time that there is someone who was contractually obligated to take it (and they would pay more because of that).

I am an employee of Ripple.
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aerion
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July 03, 2011, 02:30:57 PM
 #18

Would be great if they did, however Newegg I assume has very tight margins, and the volitility of bitcoin at times could cause them to even loose money. I 'm just a newbie and still getting my head around bitcoin :O
JBDive
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July 03, 2011, 02:40:57 PM
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Would be great if they did, however Newegg I assume has very tight margins, and the volitility of bitcoin at times could cause them to even loose money. I 'm just a newbie and still getting my head around bitcoin :O

yeah it's never going to happen because they cannot without some hefty programming compute the current price of a product with their current margin on that category against a fluctuating BTC. Then the whole tax reporting issue comes into play. They could however and probably should be looking at Dwolla then it would not matter what the BTC price is, where the money originated or anything else.

Remember they are just an eCommerce frontend to the disti.
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July 03, 2011, 07:43:31 PM
 #20

Programming should not be an issue for an eCommerce site especially a geek driven one. Its really just the chick and the egg problem in my view. If newegg was on board it would be more stable mitigating the need for an insurance. Since they are the egg then need to stop acting like a chicken.

In real time your asking for them to pull the current price of BTC, validate product price, provide BTC price for product then protect themselves from any changes in BTC between when you were quoted and when the shopping cart was processed then automate the actual transaction from wallet to wallet. At the current margins on most items they sell this just isn't built into those margins meaning they would have to increase, even if by a little, a higher margin to cover the programming and variation in BTC prices.

I don't see that happening. Again even though Newegg has grown they are really no more than an eCommerce frontend to the disti. Ingram or Techdata, don't remember which, came to us some 8 years ago to do the same thing.
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