Newegg Needs to accept bit coin.

[dsp]

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]

It would be awesome if they did, but I'm not going to hold my breath.

[zybron]

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.

[x0Jakeyboy0x]

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.

[joulesbeef]

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

[SlipperySlope]

It would be great if Newegg supported bitcoin.  Especially for international orders.

[dustintrammell]

Here's an intermediary service:

http://bitspend.com/

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

http://bitegg.net/

[JoelKatz]

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.

[fascistmuffin]

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.

[Stephen Gornick]

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]

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.

[JoelKatz]

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.

[tc2606]

is there a list of "relatively large" sites that accept bitcoin somewhere

[Duffman]

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?

[cuddlefish]

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]

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

[JoelKatz]

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).

[aerion]

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]

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.

[JBDive]

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.

[fascistmuffin]

I don't think people realize that it's not as simple as making a form to pay with bitcoin and putting it on the site. Running a business isn't just taking money and giving a product out. You have to take a lot more things in consideration.

Like I said in a earlier post on this thread, Newegg has no use for bitcoin because they can't pay suppliers, shippers, or employees with BTC. They probably will never have a use for bitcoin as long as they wish to deliver things with low prices, and they will never be legally able to pay their employees in BTC in the USA*. Think of all the fees associated with BTC when the only use you have for it is turning it into money. You pay the trade site a commission, then you pay dwolla (or trade site for different method) an amount to withdraw those funds. All of that is done on a not as developed infrastructure, unlike credit cards. Yes they paid fee's with credit cards, but they also get a whole hell of a lot more protection in that way, since the fees from credit cards help pay towards anti fraud services and insurance. Does bitcoin really have any fraud protection other than people pointing out scams?

They don't get any benefit from internationally purchases, which could be easier with bitcoin, since they don't ship internationally.

Then there's also taxes, employee benefits, and other costs that can't be covered by bitcoin. Also, they would need to add more support and/or train support people to deal with BTC translations.

So in the end, if you were running this business rationally, with consideration of the well-being of your employees and business growth, would you accept bitcoin?

*If you disagree with this point, look how long it takes for any technology legislation to be passed or how informed the people deciding those things are. Hint: Most of them get money from businesses to insure that businesses interests.

[Stephen Gornick]

They probably will never have a use for bitcoin as long as they wish to deliver things with low prices

The price competitive businesses will be among the most enthusiastic about a low cost option to compete against businesses that only offer credit and debit payment card methods.

Think of all the fees associated with BTC when the only use you have for it is turning it into money.

.  

0.65% exchange fee (on Mt. Gox) + $0.25 per-day to sweep the balance to Dwolla.

All of that is done on a not as developed infrastructure, unlike credit cards.

There are APIs for all of this now.

Yes they paid fee's with credit cards, but they also get a whole hell of a lot more protection in that way, since the fees from credit cards help pay towards anti fraud services and insurance. Does bitcoin really have any fraud protection other than people pointing out scams?

As long as the merchant waits for the transaction to confirm (and thus become irrevocable) before shipping, there is no fraud risk.  Are you instead trying to make an argument why consumers might not want to pay with bitcoins?

So in the end, if you were running this business rationally, with consideration of the well-being of your employees and business growth, would you accept bitcoin?

Let's see: no payment network fees (to the merchant), no chargeback risk, all payments "settle" (funds available to be spent) within an hour ...  hmm ...  what's the question again?

[happyface]

A big site like newegg accepting bitcoins would definitely help the currency out.
Isn't a huge problem that the value of bitcoins changes so much though?

[zybron]

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.

This sounds a lot like a credit default swap. We know where that lead.

Although the last part - the part that didn't exist for CDS transactions - might help mitigate the potential crash.

[redr0cket]

I don't think people realize that it's not as simple as making a form to pay with bitcoin and putting it on the site. Running a business isn't just taking money and giving a product out. You have to take a lot more things in consideration.

Like I said in a earlier post on this thread, Newegg has no use for bitcoin because they can't pay suppliers, shippers, or employees with BTC. They probably will never have a use for bitcoin as long as they wish to deliver things with low prices, and they will never be legally able to pay their employees in BTC in the USA*. Think of all the fees associated with BTC when the only use you have for it is turning it into money. You pay the trade site a commission, then you pay dwolla (or trade site for different method) an amount to withdraw those funds. All of that is done on a not as developed infrastructure, unlike credit cards. Yes they paid fee's with credit cards, but they also get a whole hell of a lot more protection in that way, since the fees from credit cards help pay towards anti fraud services and insurance. Does bitcoin really have any fraud protection other than people pointing out scams?

They don't get any benefit from internationally purchases, which could be easier with bitcoin, since they don't ship internationally.

Then there's also taxes, employee benefits, and other costs that can't be covered by bitcoin. Also, they would need to add more support and/or train support people to deal with BTC translations.

So in the end, if you were running this business rationally, with consideration of the well-being of your employees and business growth, would you accept bitcoin?

*If you disagree with this point, look how long it takes for any technology legislation to be passed or how informed the people deciding those things are. Hint: Most of them get money from businesses to insure that businesses interests.

I understand your point of view as I run a wholesale business myself. Fluctuation in pricing(even a little bit) can drastically undermine your bottom line. Now take the additional man hours it takes to convert these bitcoins into USD, handle refunds, etc...  There is no reasonable expectation that they will clear the same profit than were they to not accept them.

 I think a lot of folks simply look at the market rate and say hey! my bitcoins are worth $17.00. I'll give you 2 bitcoins for that $34.00 mouse pad. As a company, were I to accept bitcoins I would be skeptical that I would be able to get the funds I really need into a bank account to pay my creditors, employees, etc... in a timely manner. I don't have enough faith in the value yet. I know what my cost of goods are, I know to the penny what it costs to have an employee working for 1 hour or 41 hours. I know what I need to charge to break even, and I know what I need to charge to make a profit. A fluctuation in price of even .30$ could take me from profitable to break even or worse.

Now if there was a premium associated with accepting bitcoins' at this particular time (for arguments sake 1:1.25 I could reasonably justify accepting them for products that I stock and sell. Until that happens I would be very hesitant of tackling this animal.

[Stephen Gornick]

Now take the additional man hours it takes to convert these bitcoins into USD

There are APIs for all of this now.  They could be converted automatically, and immediately.

handle refunds

You convert the same number of USDs to BTCs using the market rate when the refund is issued.

Now if there was a premium associated with accepting bitcoins' at this particular time

Your logic seems odd to me.  To accept a payment method that costs less, you want to charge more?  

Maybe your business is booming right now and you aren't hungry.  A lot of businesses aren't that fortunate -- they'ld welcome new sales that might occur after accepting bitcoins as payment.

Ask Meze Grill, for instance, if they regret the idea of accepting bitcoin as payment:
 - http://bit.ly/l07wny

[squeeb]

Would be cool if they took it...been a newegg fan for like 10 years.

[JBDive]

Simple fact is for Bitcoin to become anything more than basement geek coolness (look I at my mining rig) you have to start seeing more people/businesses willing to accept BTC as payment or exchange. I'm thinking more one on one transactions for services vs. larger businesses for products.

I have been trying to figure out how we could accept BTC in exchange for totally secure backup services we provide but would users be willing to be invoiced monthly and the price in BTC be a moving target? One month 1 BTC, the next who knows, not to mention there would have to be a padding in there for any price moves between invoiced date and payment date. If I knew there were enough geeks here who provide tech services to their own clients I can see where maybe they charge the client in $ but pay us in BTC and that might help drive it especially if they bought from us a chunk of backup space and then devided that up to their clients then we could charge based on the block, say 100GB, but cover the BTC price move based on them only using 80% of that then after they hit 81% they would have to go into the next storage block. Don't know, still trying to figure out some way to do it and not loose money while not overcharging as well.

[JoelKatz]

I have been trying to figure out how we could accept BTC in exchange for totally secure backup services we provide but would users be willing to be invoiced monthly and the price in BTC be a moving target? One month 1 BTC, the next who knows,

Do you vary your prices in USD when the value of USD relative to other currencies changes?

not to mention there would have to be a padding in there for any price moves between invoiced date and payment date.

Why? Wouldn't the opportunity make extra money balance out the risk of losing some? And if you know how to time your conversions, you can insulate yourself against that risk pretty well.

If I knew there were enough geeks here who provide tech services to their own clients I can see where maybe they charge the client in $ but pay us in BTC and that might help drive it especially if they bought from us a chunk of backup space and then devided that up to their clients then we could charge based on the block, say 100GB, but cover the BTC price move based on them only using 80% of that then after they hit 81% they would have to go into the next storage block. Don't know, still trying to figure out some way to do it and not loose money while not overcharging as well.

Pick a price in bitcoins. Adjust the price only as absolutely necessary just as you would with USD. Time your conversions of BTC->USD.

Yes, you would be taking an additional risk, but you would also have the potential for additional profits. If you don't think BTC is a good investment in the medium term (2-3 months at least), then don't do it. Wait until bitcoins are more stable.

[JBDive]

I have been trying to figure out how we could accept BTC in exchange for totally secure backup services we provide but would users be willing to be invoiced monthly and the price in BTC be a moving target? One month 1 BTC, the next who knows,

Do you vary your prices in USD when the value of USD relative to other currencies changes?

My cost are in US dollars and that cost is fixed based on storage use plus client software fee. It doesn't matter what the currency is doing the price remains the same. Since I can't pay for my cost in BTC I could get screwed considering the price moves in BTC over a month's time or the opposite, I could be totally ripping somebody off if I set it at 2 BTC based on today's $14 and next week it goes to $30.

not to mention there would have to be a padding in there for any price moves between invoiced date and payment date.

Why? Wouldn't the opportunity make extra money balance out the risk of losing some? And if you know how to time your conversions, you can insulate yourself against that risk pretty well.

Our margin is very tight. We should charge a good 30% more than we do but we provide this service to our customers as cheaply as possible so they have a solid, secure backup vs. some of the all you can eat junk that simple does not work or is not secure.

If I knew there were enough geeks here who provide tech services to their own clients I can see where maybe they charge the client in $ but pay us in BTC and that might help drive it especially if they bought from us a chunk of backup space and then devided that up to their clients then we could charge based on the block, say 100GB, but cover the BTC price move based on them only using 80% of that then after they hit 81% they would have to go into the next storage block. Don't know, still trying to figure out some way to do it and not loose money while not overcharging as well.

Pick a price in bitcoins. Adjust the price only as absolutely necessary just as you would with USD. Time your conversions of BTC->USD.

Yes, you would be taking an additional risk, but you would also have the potential for additional profits. If you don't think BTC is a good investment in the medium term (2-3 months at least), then don't do it. Wait until bitcoins are more stable.

My concern is I always want to be fair about things and trying to match our cost against a moving target, BTC to $, would likely require I pad the price in BTC to cover the 3-5 dollar swings we are seeing. The next problem would be how the customers feel about being invoiced a different rate each month in order to match that moving target. Would somebody get ticked off that this month it's 1.25 BTC and and next month it's 1.5 BTC because BTC to dollar fell, I'm doubting any would overly complain the other way around, was 1.25BTC and next month it's just .75BTC.

What I think I am going to do is to open it up to a test group, maybe 10 users, and see how a few billing cycles go. At 10 users on the lower plans I can cover any loses and get a feel for how to process and automate the billing. I think what your getting at is instead of me invoicing X BTC and then trying to convert those to dollars as they are paid I would bank those BTC either as a long term investment or sell when pricing matches what I value them at. This would probably put me in the hole the first few months as I have to cover cost yet in the long run I should come out ahead.

Sorry for the strange formatting but I tried to do quotes in quotes and got the whole thing messed up so started over.

[redr0cket]

Now take the additional man hours it takes to convert these bitcoins into USD

There are APIs for all of this now.  They could be converted automatically, and immediately.

handle refunds

You convert the same number of USDs to BTCs using the market rate when the refund is issued.

Now if there was a premium associated with accepting bitcoins' at this particular time

Your logic seems odd to me.  To accept a payment method that costs less, you want to charge more?  

Maybe your business is booming right now and you aren't hungry.  A lot of businesses aren't that fortunate -- they'ld welcome new sales that might occur after accepting bitcoins as payment.

Ask Meze Grill, for instance, if they regret the idea of accepting bitcoin as payment:
 - http://bit.ly/l07wny

Sorry I didn't respond sooner. Got "busy"...

I checked out the link you posted. A few things: they haven't had a customer use BTC as of when the article was written. They have a worry that I also share, current exchange rate. I'm not selling food. I'm selling products that cost hundreds of dollars, my margins are thin, and my total profit is a small percentage of my total gross sales. I could not, nor want to absorb a 3% market value decrease over the span of a month, never mind a day. I think you'd find this is the case with the vast majority of companies out there(99.99999%) Meze Grill have a QR code to accept payment, but they say nothing of the process after getting BTC. I know what I have to do to get funds from BTC, so I'm assuming that's they way I'd have to do it initially.

As of right now, bitcoins do not cost me less to use. I can't pay my vendors, employees, insurance, fuel, import fee's, taxes, etc... in BTC. I need to convert 100% of my BTC to USD. It takes far longer to get the funds into my account than through normal means.  So the value of BTC could decrease in value(possible), I will pay an exchange fee and a transfer fee to get funds into my account(given) and it takes 2x's longer to get funds.  Now I need to refund BTC? Start the process over....

Take into account the costs of setting up my system to do this automatically; I don't know how to use API's, now I have to pay someone. I have a  company that handles our systems but I would need to hire someone else to do this specialty work and coordinate with the other company to make sure my systems are still hardened (also on my dime). It turns into a headache for me, and I want to be able to accept bitcoins. Now that I've gone through all of that, I'm assuming that even one of my customers have/have enough bitcoins to spend.

This all leads back to charging a premium to use BTC as a method of payment. It's great that MEZE can sell a chicken sandwich for BTC, can they afford to sell pallets of chicken sandwiches?  Another example of current market conditions. Right now, TH has a last sell price of $13.95. 2 weeks ago I sold 2 BTC for $17.00. That's a -17.94% decrease in value.

Let's say hypothetically that I'm Newegg and accept Bitcoins. I sell 100 parts for an average of $50= $5000.  Convert that to BTC. $5000/13.95= 358.42*** BTC.   Market drops 3%= 358.42 BTC= $4850.00 or $13.53.  Newegg has documented profit margins of 1.4%, that's off their financials FYI. They spend $98.60 for every $100 they make. So to break even they would need to have made $4930.00 in USD. You project that out over 100k in sales and it becomes unbearable. Newegg does over 2 billion in sales....  Now Newegg has already gotten services in place to accept BTC. There is a tangible cost associated with this. You might put a QR code on your site in 5 minutes but it's a little more complicated than that for Newegg. They are now even further in the hole profit wise. Exchange fee's? Transfer Fee's? 1, just 1 person submits for a return and they have to give a refund on the USD value of the product(unless otherwise stipulated) They've lost even more....

$1 USD = $1 USD but $1 USD=0.071*** BTC(Subject to Market Rates)  Basically Newegg shoulders all of the risk for BTC currency, while all partners shoulder risk with USD.

In the end, it is too risky for large companies to accept BTC as a method of payment right now. The market is too volatile to shoulder that risk. Hopefully one day it'll work itself out.

[thavok]

it would be now more "risky" then accepting other currencies, as long as there is a market to support the bitcoin they can change it into whatever currency they want.  I think we need to start a petition or even only buy from hardware people that accept bitcoins things don't change unless you put your money where your mouth is.

[linkme]

considering the business the bitcoin community brings em, i agree, as for risk cant they just wait for confirms ? and for value fluctuations they could just add 5% on the prices.

[svojoe]

I would be willing to pay 5%-7% premium to use BTC instead of USD in most cases.   If the order was huge maybe I would be inclined to convert it to cash but if I wanted a cheap SSD from newegg I would love to just pop off a fistful of BTC even if I technically paid $6 usd more dollars for it.

[svojoe]

Actually if I can acquire BTC through means I find sustainable (say mining, barter etc) and spend them say at Newegg and get goods/services that I need/want.  It would become a closed loop system that would eventually cause me to become less concerned about whatever the BTC to USD rate was even if there was a lot of fluctuation.   It would just become yet again another route to maximize value or minimize loss that many people don't take.   Just like coupons for example.   I don't use them,  well hardly ever... its not that I don't care about saving money, I do.  I work hard for what I have.  Its just that outside of a radical circumstance I just can't be bothered to incorporate the acquisition/use of coupons into my lifestyle for the preconceived gains.   So I miss out and I'm doing just fine. 

I don't really care what the medium for validating the equity of the exchange is...  Just so long as it works to give me what I need.

[JBDive]

The post concerning returns needs to be addressed and I don't see anyone doing that. If you bought that $200 video card for 16BTC and wanted to return it a week later and the current USD price of BTC was $10 would you expect Newegg to send you 20BTC, credit of $200. Maybe they should just return the 16BTC minus fees, I doubt anyone would be happy with that now would they? They certainly are not going to issue you a check, they can't credit your CC so should Newegg be forced to maintain a BTC bank for returns or program a Dwolla draft so they can convert dollars into BTC to send you?

I just don't see this happening. Where is the incentive? They would clearly need to see a huge markup in the price of the products in order to accept BTC and to cover their margins. Who would stand for paying 10% higher for using BTC than cash, kind of defeats why your shopping at Newegg to begin with?

[ellipsis]

The post concerning returns needs to be addressed and I don't see anyone doing that. If you bought that $200 video card for 16BTC and wanted to return it a week later and the current USD price of BTC was $10 would you expect Newegg to send you 20BTC, credit of $200. Maybe they should just return the 16BTC minus fees, I doubt anyone would be happy with that now would they? They certainly are not going to issue you a check, they can't credit your CC so should Newegg be forced to maintain a BTC bank for returns or program a Dwolla draft so they can convert dollars into BTC to send you?

I just don't see this happening. Where is the incentive? They would clearly need to see a huge markup in the price of the products in order to accept BTC and to cover their margins. Who would stand for paying 10% higher for using BTC than cash, kind of defeats why your shopping at Newegg to begin with?

Most computer hardware is probably not purchased from the manufacturer in USD, and the USD exchange rate changes quite a bit each day, but have you ever heard about anyone correcting for that? Refunds return what you paid, not fair market value.

The incentive was already mentioned. If customers would pay a premium to use BTC over USD, that is profit. "Maintaining" a BTC account would probably be worth it, considering the effort required is close to nil. Software development to enhance their shopping cart, if done by someone competent, should only take an hour or two. Even on small margins, that would pay for itself rather quickly if they can fill their orders.

[getsum]

they would gain a lot of loyal customers if they decided to accept bitcoin.

[bobbybit]

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.

There would have to be a company that handled the exchange. Then Newegg could just display the current BTC cost (based on the company's api). When people pay using BTC, it works just like paypal. They go to that companies site, pay, then they notify Newegg the person has paid and to proceed. Then the company pays Newegg the USD equivalent.

On Neweggs side, they're still selling it for USD, nothing really changes. The bonus is no chargebacks.

The bitcoin company handles selling the bitcoins, covering their costs, and provides the API/setup for any business to sell in BTC and get paid in USD. I'm not sure how much profit there is going to be, this is probably a business that loses money in exchange for legitimizing bitcoin and gaining consumer and business confidence. If I was that guy with 250k bitcoins I'd no question use 10k of them to fund this business in order to protect my other 240k coins.

No real business is going to screw around with converting/accept bitcoins. There has to be a specialized bitcoin company that will accept the incoming bitcoins and then turn around and pay the online retailer in USD. Just the fact there's no charge backs should be at least some incentive.

It's like saying you want Newegg to accept gold bullion. Newegg isn't going to screw around collecting gold bullion anymore then they would bitcoins. But if another company would handle accepting/exchanging it to USD, then it makes a lot more sense.

[Duffman]

I just don't see this happening. Where is the incentive?

The incentive was already mentioned. If customers would pay a premium to use BTC over USD, that is profit.

no one would pay a premium except for idiots.  the incentive is the irreversibility.

[wormbog]

I just don't see this happening. Where is the incentive?

The incentive was already mentioned. If customers would pay a premium to use BTC over USD, that is profit.

no one would pay a premium except for idiots.  the incentive is the irreversibility.

Commenters in this thread have expressed willingness to pay a premium. I would be happy to pay a (reasonable) premium to buy from Newegg with btc. Why?

• Right now there are very limited options on what you can buy with btc. Anyone willing to sell gift cards or preloaded credit cards charge a premium for that service. I'd rather pay a premium directly to the vendor and cut out the middleman, especially if it makes the purchase process simpler.
• If I mine some coins and use them to buy from a vendor, do I owe tax on the purchase? Maybe. Does the IRS have any way to know I made the purchase? Nope. If I buy with cash and later get audited I won't be looking forward to reviewing those bank statements if I didn't pay those taxes.
• Newegg has a risk of losing money if the exchange rate drops before they can cash in. They can minimize that by charging a premium. However, they also stand to earn extra money from the exchange rate increasing. The btc economy is small enough right now that backing from a major vendor could very well cause the exchange rate to rise. They're big enough to move the market in their favor.

[Joqer]

I would be willing to sell newegg products for a reasonable premium in the near future, much less than the 15(?)% charged by these websites.

[JBDive]

The post concerning returns needs to be addressed and I don't see anyone doing that. If you bought that $200 video card for 16BTC and wanted to return it a week later and the current USD price of BTC was $10 would you expect Newegg to send you 20BTC, credit of $200. Maybe they should just return the 16BTC minus fees, I doubt anyone would be happy with that now would they? They certainly are not going to issue you a check, they can't credit your CC so should Newegg be forced to maintain a BTC bank for returns or program a Dwolla draft so they can convert dollars into BTC to send you?

I just don't see this happening. Where is the incentive? They would clearly need to see a huge markup in the price of the products in order to accept BTC and to cover their margins. Who would stand for paying 10% higher for using BTC than cash, kind of defeats why your shopping at Newegg to begin with?

Most computer hardware is probably not purchased from the manufacturer in USD, and the USD exchange rate changes quite a bit each day, but have you ever heard about anyone correcting for that? Refunds return what you paid, not fair market value.

The incentive was already mentioned. If customers would pay a premium to use BTC over USD, that is profit. "Maintaining" a BTC account would probably be worth it, considering the effort required is close to nil. Software development to enhance their shopping cart, if done by someone competent, should only take an hour or two. Even on small margins, that would pay for itself rather quickly if they can fill their orders.

Your wrong on if Newegg is paying in USD for their parts, they are. They are basically an eCommerce frrontend to the real Tier 1 Disti's. Their margin is very slim on most items and they make this up in that they are not actually warehousing, shipping or dealing directly with importing the parts. They do appear at times to handle things directly skipping the Disti such as when they bought and sold the fake CPU's last year or the year before but for the bulk of their product you can look at them as nothing more than a customer service web front to the backend importers. I would argue that those backend importers, the Disti's also pay for their products in dollars but I can't say that is a fact. Orders for most products are done months in advanced by the Disti's directly with the manufacturer and although those Intel chips may come from Taiwan it's Intel TechData, Synnex and Arrow are buying from and paying.

I agree that refunds would be based on what you paid but as I said if you paid 5BTC because that's what Newegg's backend API called for when doing the math you would not be a happy camper if Newegg sent just 4BTC back if the market had fallen nor could Newegg survive many returns if the market went the other way and 100 people all returned those video cards because Newegg based returns on current pricing and the price had gone through the roof. The dollar does not vary by 5% in a day, BTC does. Somebody in the exchange is going to be very unhappy.

So let's say you have Newegg accepting BTC how does Newegg get it's dollars out of it? The exchanges are limited in the amount they can pull out in a day, MTGox is what $1000? They would have to limit sales to the amount they could reclaim to cover cost not to mention sending those dollars to DWolla or however would show up as thousands in possible international money transfers, RED FLAG IRS!

I think the better idea if for Newegg to offer on a daily basis X number of $10 Gift Cards, limit per user to say 5 (yes some people would just backdoor multiple accounts). They could thwart the scammers by offering those cards in batches spread throughout the day so one users could be sitting at his PC with multiple accounts open at 12:01AM PST in order to pick up ever single Gift card.With a limited number of cards in the wild they should be able to cover any withdrawals they need to make per day to cover the dollar cost of the cards, the price of the cards are fixed and Gift cards are not refundable. Now if you use that card today or a month from now doesn't overly matter and any returns would be based on the dollar price of the product purchased with the gift card. There may be some legal room in there too since they would only be exchange a card for BTC vs. BTC for a physical product.

[ellipsis]

Your wrong on if Newegg is paying in USD for their parts, they are. They are basically an eCommerce frrontend to the real Tier 1 Disti's.

I said, "from the manufacturer." You would need the entire process, from mining, refining, design, fabrication, etc. to be in USD for exchange rates to not be relevant.

Their margin is very slim on most items and they make this up in that they are not actually warehousing, shipping or dealing directly with importing the parts. They do appear at times to handle things directly skipping the Disti such as when they bought and sold the fake CPU's last year or the year before but for the bulk of their product you can look at them as nothing more than a customer service web front to the backend importers. I would argue that those backend importers, the Disti's also pay for their products in dollars but I can't say that is a fact. Orders for most products are done months in advanced by the Disti's directly with the manufacturer and although those Intel chips may come from Taiwan it's Intel TechData, Synnex and Arrow are buying from and paying.

I agree that refunds would be based on what you paid but as I said if you paid 5BTC because that's what Newegg's backend API called for when doing the math you would not be a happy camper if Newegg sent just 4BTC back if the market had fallen nor could Newegg survive many returns if the market went the other way and 100 people all returned those video cards because Newegg based returns on current pricing and the price had gone through the roof. The dollar does not vary by 5% in a day, BTC does. Somebody in the exchange is going to be very unhappy.

Yes, but all of that is irrelevant. Everyone knows that a refund does not mean fair market value. I have never received a reduced refund through them, and this is the only part in their return policies that says anything like that:

Out-of-Stock (Back-Order) Items
If Newegg no longer carries an item that is sent in for replacement, or if that item is simply out of stock, the item will be sent to our Back-Order RMA Department. You will be notified via email of two options: 1) Newegg can send you a comparable replacement item, or 2) Newegg can issue you a refund at the current market value of the product. A current-market-value refund may not exceed the original invoice price. If the item is returned within 30 days of the original invoice date, a full refund will be issued.

If someone wishes to cash out on a low, that is their problem. I wouldn't expect Newegg or anyone else to do that. They only need an EMA on the exchange rate, profit margin, possibly a little buffer at first which they can remove over time to remain competitive, and price and exchange at or above that level. It's not rocket science. If they want to limit or reduce their risk, they can only offer certain items for sale with BTC, not offer a return policy at all on them, insure themselves by investing an equivalent amount of their risk elsewhere, etc.

So let's say you have Newegg accepting BTC how does Newegg get it's dollars out of it? The exchanges are limited in the amount they can pull out in a day, MTGox is what $1000? They would have to limit sales to the amount they could reclaim to cover cost not to mention sending those dollars to DWolla or however would show up as thousands in possible international money transfers, RED FLAG IRS!

The same way we do. Yes, the exchanges are small, but once you get retail markets involved, it will expand, probably rapidly. Few are willing to tie up capital in order to be the counterparty to any deal, so they are mostly simple brokers between parties at this point.

I think the better idea if for Newegg to offer on a daily basis X number of $10 Gift Cards, limit per user to say 5 (yes some people would just backdoor multiple accounts). They could thwart the scammers by offering those cards in batches spread throughout the day so one users could be sitting at his PC with multiple accounts open at 12:01AM PST in order to pick up ever single Gift card.With a limited number of cards in the wild they should be able to cover any withdrawals they need to make per day to cover the dollar cost of the cards, the price of the cards are fixed and Gift cards are not refundable. Now if you use that card today or a month from now doesn't overly matter and any returns would be based on the dollar price of the product purchased with the gift card. There may be some legal room in there too since they would only be exchange a card for BTC vs. BTC for a physical product.

Good idea. At least it's something.

[dual6990s]

A novel concept, but for the number of items that break, burn out, or have been replaced I would be up a creek many a time if I had payed in bitcoins

[JBDive]

This is not true I have seen the city of industry warehouse. The stock. I'm sure they drop ship also.

When ordering from Newegg and you see the shipments coming out of NJ, PA, TN and yes CA those are direct from the Disti. They may have a warehouse at this point but it's stock would surely be limited to the high turn over items or items they are pack breaking like hard drives and MS OEM software which you won't get a Disti to do. I have noticed HD's always seem to come out of CA so yes I can see them getting HD's in by the case and breaking those out but I am willing to bet it's setup in some type of "as we need it, replenish it" from the Disti who also has warehouses there.

[Desolator]

Their profit margins are super thin and they make their money in volume and low operating costs.  Because of this, they can't take a currency whose value goes up and down pretty wildly.  They could take a payment for an item that has a 20% profit margin and the next day, the change in bitcoin value means it's -5% and they actually lost money.

There's nothing stopping someone from acting as a middleman and taking bitcoins then buying items on newegg for USD and forwarding the item on to that person (except that that's a massive fraud waiting to happen )

[Stephen Gornick]

they can't take a currency whose value goes up and down pretty wildly.

This is a long thread now, perhaps you missed earlier posts where this was addressed. Specifically:

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.

- http://forum.bitcoin.org/index.php?topic=25380.msg317659#msg317659

That way a merchant not wishing to be exposed to exchange rate risk is never holding bitcoins for more than a few minutes.  They can accept them as payment and trade them out to USDs upon receipt.

There is an expense in adding this new payment method though.  That expense is offset though from the benefits that bitcoins bring:  no chargebacks, significantly lower transaction fees and nearly instantaneous settlement.  Compared to sales paid for using Visa/MC payment cards, the sales paid for using bitcoins could be the merchant's most profitable as a result!

Bitcoin is perfect for ecommerce sites though the larger sites probably will hold off until they are forced to follow.  Expect some smaller ecommerce sites to start experimenting with bitcoin payments.  This experimentation is already happening for at least one global ecommerce company in a private trial with a small target group of customers.