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Author Topic: We Need a Real Bitcoin Online Store, not "retailers" who just price gouge 15-20%  (Read 4774 times)
ampirebus
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August 17, 2011, 05:12:51 PM
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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.
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ampirebus
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August 17, 2011, 05:21:13 PM
 #2

just find any item and it takes seconds



Uploaded with ImageShack.us



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

almost closing in on 50% markup!
Phinnaeus Gage
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August 17, 2011, 05:27:14 PM
 #3

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.


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.
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August 17, 2011, 05:28:16 PM
 #4

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.
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August 17, 2011, 05:37:20 PM
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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
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August 17, 2011, 05:41:05 PM
 #6

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:





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

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August 17, 2011, 05:45:29 PM
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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!

MacMiner - The first, best and easiest to use native Mac coin mining app: https://bitcointalk.org/index.php?topic=197110.0

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August 17, 2011, 05:54:18 PM
 #8

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.


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August 17, 2011, 05:56:30 PM
 #9

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.

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August 17, 2011, 05:58:32 PM
 #10

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!
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August 17, 2011, 06:04:44 PM
 #11

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.

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.
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August 17, 2011, 06:09:34 PM
 #12

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?  Grin

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August 17, 2011, 06:09:39 PM
 #13

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.

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Pool your bitcoins with others. Vote on solutions using the Bitcoin blockchain. Keep your bitcoins in your cold storage until you find a solution you like.
Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
Phinnaeus Gage
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August 17, 2011, 06:15:55 PM
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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


enmaku
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August 17, 2011, 06:16:25 PM
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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.

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.

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)

ampirebus
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August 17, 2011, 06:18:15 PM
 #16

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!

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).
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August 17, 2011, 06:21:08 PM
 #17

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.

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.

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.

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.


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


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August 17, 2011, 06:23:46 PM
 #18

I don't touch the stuff but my wife does (and thats what she drinks).

Does your wife like clothes?

http://www.heidijosboutique.com

 Grin

http://www.bitpools.com
Pool your bitcoins with others. Vote on solutions using the Bitcoin blockchain. Keep your bitcoins in your cold storage until you find a solution you like.
Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
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August 17, 2011, 06:24:58 PM
 #19

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




LOL love the image Grin

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

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August 17, 2011, 06:45:49 PM
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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).
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  Grin )

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