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Half.com Searches for Gold in Cyber Garage Sales The startup is offering a way for consumers and used-goods merchants to tap an online market for common items like secondhand books or CDs Philadelphia Netrepreneur Joshua Kopelman, 28, wants to make money off some of the stuff in your basement -- and garage and attic, while he's at it. How? With Half.com, his new startup, which officially launches on Jan. 19. Kopelman's goal: to use the Net to create a market for nearly new, mass-produced goods such as that not-quite-so-hot-anymore John Grisham novel, or that not-so-must-have Spice Girls CD. It's cyber-selling for the garage-sale set. The Net is proving to be a good vehicle for helping industries sell off excess and used inventory. So Kopelman figures it might also be a great way to help individual consumers sell off some of their own small items -- and with less hassle than having to organize and manage a yard sale. Yet Half.com is not an auction site like eBay. Many of the goods Kopelman expects on his site are still too common and widely available to inspire much serious bidding. "Auctions are good for items with an element of scarcity," says Kopelman. Sure, there may be some items listed on Half.com that also make their way onto eBay. But Kopelman thinks he can build Half.com into a brand that consumers check out first when they're out to buy specific books, CDs, and video games -- on the supercheap. Why the optimism? Kopelman says he got the idea for Half.com when he noticed that copies of John Grisham's novel The Partner couldn't even fetch $1 per copy on eBay. To be sure, Half.com isn't a sure bet -- yet. That's chiefly because rivals like Priceline.com are eyeing the yard-sale model and expect to announce their own online versions in coming weeks and months. But Kopelman hopes his delivery model will separate his virtual garage-sale effort from the others. SEND THE BUBBLE WRAP. Here's how Half.com works: Let's say you have a slightly used copy of The Partner that you want to get off your hands. You go online and register with Half.com to help you sell it -- in the hopes of getting more for it than you would at a yard sale. You then type in the item's UPC code, which is printed on the book jacket, and Half.com uses that to get a digital description of the book, which it then adds to its online inventory. The next step: Half.com sends you a suggested sale price, based on whether the book is in excellent, good, or fair condition. No item will list for more than half of the original retail price -- thus the Half.com moniker. Who delivers the book? As soon as you list at least three products on Half.com's Web site, Half.com will send you an envelope and some Bubble Wrap to use when shipping the books to the people who bought them. As for postage? When you sign up with Half.com, you're sent instructions about how to use Stamps.com, the online postal service, to buy the needed postage for the item. You stick the goods in the mail -- then Half.com reimburses you for the postage later. And that's not all. When you tell Half.com the product has been sold and shipped, Half.com will charge your customer's credit card for the book, then send you a check for it, minus a 15% cut of the sale price.
Market analysts also see the potential. Mike May, an e-commerce analyst for Jupiter Research, a market-research firm, says Half.com can get better prices for merchants. "It allows Half.com to compete on prices where customers are price-sensitive, without cutting into their own margins," he says. Venture capitalists also are keen on the company. So far, Kopelman has raised some $2.5 million to get Half.com launched, with a chunk of that from Comcast Interactive Capital, the VC arm of cable giant Comcast Corp. Kopelman is in the process of raising $15 million to $20 million more. But the risks are big ones. For starters, consumers may be turned off by Half.com's down-home delivery system, which, by its nature, probably won't be as speedy and slick as those of big online bookstores like Amazon.com. And Half.com will have far less control over how fast individual consumers put the items they've sold in the mail. Says Jupiter analyst May: "Half.com is, ultimately, beholden to an army of people who are not professional merchants to set their customer-service standards."
Brand awareness could indeed be a big sticking point for newbie Half.com. Kopelman says he's tackling that with plans to spend $15 million this year on marketing and advertising. And Kopelman is out to get all the publicity he can. One recent publicity stunt: He has persuaded the town of Halfway, Ore., to change its name to Half.com. (Halfway officials agreed to do that for free, saying they were looking to heighten their image, anyway, to woo more tourists.) Sales hype aside, Kopelman says Half.com also has the substance to go the distance. He says Priceline isn't expected to pay to ship the items it helps people sell, so Kopelman thinks Half.com has an advantage there among potential customers. Furthermore, he figures Priceline will focus on selling items that are too bulky to ship economically -- not the smaller items like books, CDs, and video games and, eventually, smaller but pricier items such as PalmPilots and other electronic gear that Half.com is targeting. With any luck, Kopelman will be able to take Half.com much more than halfway. Barrett is the Philadelphia correspondent for Business Week. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 WEB POINTERS Click here to visit some of the sites mentioned in this column: Half.com Priceline.com Stamps.com Comcast Interactive Capital The Original Book Swap Jupiter Research Forrester Research | ||||||||||||
