It’s been a while since we wrote about OnBuy, the marketplace which soft launched in November 2013 and then went back into development. Today we received an email signed by OnBuy’s MD, Cas Paton which lays out his plans for the future.
OnBuy have the normal problem that all start up online marketplaces have – “Where do we get the buyers from and if we’ve got no buyers how do we convince sellers to sign up?” Cas addresses this pretty honestly in his email.
Our advice is do absolutely nothing at the moment. Christmas is fast approaching and you shouldn’t be wasting a minute of your time on a marketplace which isn’t scheduled to launch until the middle of next year.
After the Christmas rush take a look at OnBuy and decide if it’s for you. Do you want to wait until you see others having success on OnBuy or do you want to get in early on day 1?
The only measure of success that OnBuy needs to deliver is sales and profits for sellers. Assuming that listing will be as easy as uploading a CSV of your inventory or clicking a link in your multichannel management solution, if you can make more profit than the cost in fees the marketplace is worth sticking with.
No one expects OnBuy to be as successful as eBay or Amazon the day they open for business. What we at Tamebay will be looking for however is within a couple of months are sellers making enough profit to cover the monthly fee plus sales commission plus a bit left over? If the answer is yes then OnBuy will be worth growing with.
Here’s the email in full:
Important OnBuy Update
I wanted to update you about the status of OnBuy and how you can get involved, to help launch the UK’s first major Amazon rival, the OnBuy Marketplace.
As you may already know, OnBuy was acquired by myself, Cas Paton, after a rocky start to the project and the deterioration of the relationship between the three principle shareholders of the original business.
The rocky start of OnBuy last year had nothing to do with the business itself, the project viability, or finances. To put it bluntly, the project suffered from three different opinions for the future growth of OnBuy and this led to a deadlock for the business.
I purchased OnBuy in July 2014 after several months of negotiation. OnBuy is currently back in development and is expected to launch to the public on 1st July 2015, with exciting new fees and a significant marketing investment.
We have a dedicated development team working flat-out to deliver a much improved solution to market.
We really want you on-board with OnBuy.
New OnBuy Fees
It was always my opinion that OnBuy should offer a better deal to UK businesses over the competition; Rather than to simply “compete” with them on fees, we want to blow them out of the water while still being able to effectively employ a viable business model.
On this basis, the first thing that I have done since acquiring OnBuy is drive the sales fee down to 7% across all categories on the marketplace. This will make OnBuy the cheapest cost-per-sale marketplace on the internet, while still being a viable business.
Secondly, I decided that OnBuy needed an edge in the market, to help drive the business over the first two years of trading and to secure sellers like you with OnBuy even at the start of our project, when sales numbers are growing but obviously not as great as they will be.
I’ve decided to give sellers the lowest possible affordable cost initially, which also helps to secure the best prices possible for OnBuy. I have agreed to launch OnBuy at 3.5% for the first two years. That’s unheard of in our industry.
Those fees includes transaction processing costs.
Sellers subscriptions are simple too, £50 per month for a normal seller account and £100 per month for a managed sellers account, featuring a dedicated account management team to help with all kinds of activities, including: listing assistance, marketing assistance, marketing opportunities, API support and much more. We are also offering some additional tools for managed sellers, such as auto-repricing, pre-ordering and more.
Subscriptions vs. Sales
The first thing that I’m often asked is whether OnBuy is viable for a seller at the start of our initial trading, when being asked to pay £50 per month to list on a marketplace that has only just started marketing themselves, with limited traffic.
Obviously I understand this conundrum, but the truth is that OnBuy will work very hard from day one of trading to ensure that we invest in as much marketing as possible and as quickly as possible. That being said, admittedly, it will still take some time for the sales numbers to increase.
OnBuy will be advertising on TV, radio and magazines to ensure maximum exposure. During the run up to Christmas 2015 this should be in full-swing. Every penny we generate will be invested for several years.
Getting listed on OnBuy at the beginning of our journey will mean more exposure for your listings, with less competition. This has to be worth its weight in gold to all sellers in this competitive online space.
The prospect of OnBuy may actually be worth your investment for a few months; the result of OnBuy’s success will be a more affordable, approachable and honest marketplace, which has the added benefit of being British.
Also, remember that OnBuy is not a retailer (unlike others), so our intention is to launch a viable marketplace that will never compete with you, never use our sales data to gain a competitive edge, but instead fairly operate as an honest platform while trying to maximise your margins as much as possible and also increasing your exposure as much as we can.
We at OnBuy want you on-board. We want your support.
If you want to sign up for OnBuy, please complete the OnBuy interest form on www.onbuy.co.uk – If you have done so already you don’t need to repeat this exercise, we have your details safe and will be in-touch later this year.
If you have any questions please forward them to [email protected] and one of our new business team will respond as fast as we can.
52 Responses
£50 a month?!!!
They are having a laugh.
S.
Having a built-in auto-repricing feature freaks me out far more than the subscription charge! Surely this will just mean the same Race to the Gutter you get on Amazon so no competing seller actually makes any margin? Auto-repricing only makes sense if you are the only seller using it!
The cheapest? What about eBid, they are free to use once you pay the initial £49.99. Or if you want to you can pay a small percentage (1-3%) for various upgrades. And to agree with other sellers, £50 upfront a month, you will get virtually no one interested, so scrap that before you start. You cannot ask for money upfront with no track record whatever spiel you spout, only results count.
It’s interesting to read everyone’s comments. No business decision is without risk or up-front investment, so personally £50 per month, no listing fees and very very low commission for 2+ years sounds worth a look to me….
After Play.com I would be very reluctant to spend the time on an unproven platform especially with a £50 a month subscription. The sensible option seems to be wait and see rather than going in from day one, let other sellers subsidise the platform launch. If the marketplace manages to attract sufficient customers and traffic it might be worth a look again in 2016.
Hi there
I am very interested to hear that a new rival to eBay is coming to town! I sell vintage costume jewellery, vintage handbags, accessories and homeware. Will I be able to sell these sort of items on OnBuy along with other second hand and collectable items?
Will I also be able to sell my own range of hand made up-cycled costume jewellery?
I just hope that OnBuy is just not for NEW goods only that need bar codes, like Amazon. Please tell me you are going to welcome the niche sellers of unusual, one-off items that eBay is driving away at the moment.
Hope to hear from you soon.
Nina
£50? To a substantial operation with range and depth of inventory that would not be seen as any barrier to entry at all. The offer would be the deciding factor.
£50 will however keep away many of the small scale traders that abound on eBay. And that can be seen as either a good thing or a bad thing dependent upon your standpoint!
Tamebay Community
The comments on Tamebay were brought to my attention this AM by our marketing team, and I have just responded to one comment but I don’t have time to monitor the site continuously, so thought I’d make a comment of my own!
The OnBuy project is to launch next year and we will be able to showcase everything then, so you have a sound understanding of exactly how the project works.
However, I invite you to contact OnBuy with your individual questions as our marketing team can only say so much on a forum. I will personally invest time with any seller who is interested in OnBuy and has concerns about our functions or features, our mission, our objectives or our limitations.
I currently don’t have the free time to discuss fees and rates, I think this has been covered already.
Feel free to email [email protected] and mark the email FAO Cas Paton if you would like to ask me something personally.
I look forward to welcoming many of you onto OnBuy in due course.
Have a great weekend.
Yours Sincerely
Cas Paton
looks like an excellent offering from our perspective.
i dont feel £50 per month is that prohibitive, in fact we’d probably go for the managed account, give it a few months, and if its not possible to recoup the £100 each month then its not worth trading.
as much as i like the idea of “investing” in an alternative to eBay, the real investment is the time it takes, time that could be spent increasing sales on other platforms, subscription fees are less of a concern.
– for me, if you could make the CSV upload able to accept (with minimal editiing) eBay or amazon format files, i could have thousands of products available in a matter of minutes. then its all down to how many customers OnBuy can attract for my £100, and whether the sales are enough to recoup the costs.
-failing that, sort out a “migrate your listings” tool.
considering the FVF’s are approximately half the price, with no addtional charges, you’re only looking at around ~£800 worth of sales each month to cover the £50 monthly fee, anything above that and you’re already getting a better return than eBay.
if they rivalled the sales on eBay (i know they wont straight away, its an ‘if’ ), we’d recoup the £100 on the first day and be 50% better off the rest of the month.
I’ve been following OnBuy for a long time now, I was pretty excited about the fees until I read about the £50 subscription fee. It is a fair amount at £600 for a year and a significant time investment for the sellers.
If OnBuy expects buyers then why not charge the seller higher fees and zero subscription that way the seller only pays when they make a sale limiting the sellers risk and enabling more sellers to test the waters. Since OnBuy is so confident with sales early on they’ll make plenty from the fees for marketing? £50 per seller for advertising doesn’t seem like much at all. Personally I think a much higher fee but no subscription fee to start off will attract a lot more listings.
I really hope we will have an alternative.
Hi Jason
It’s a catch 22. OnBuy has a substantial marketing budget, but seller subscriptions will aid that budget considerably; 1500 sellers paying £50 per month (for example) is a nice additional supporting revenue to throw into category based marketing.
The idea for OnBuy is that the first Christmas will be our real break-through.
It’s the balance between long-term placement vs. short term invasion. OnBuy has to push it’s way into the market, and continue to grow strongly over the first 3-5 years.
This way, the British marketplace stands a chance at pushing the bigger players out of the way in certain areas. Without this, OnBuy will always be the “company that could never quite get there” and will trickle along growing slowly but never really delivering the results that sellers need to stay on OnBuy long-term.
Yours Sincerely
OnBuy
Hi, are there any plans to integrate with any of the multi channel providers e.g eSellerPro, to simplify inventory and order management.
Thanks
I do wish people would stop complaining about the £50 fee. Everyone moans about how rubbish ebid is as an alternative to ebay.
It is rubbish because there are no buyers.
There are no buyers because no one has heard of it.
No one has heard of it because it is not widely advertised.
It is not widely advertised because ebid do not have enough money to pay for marketing and PR.
Ebid do not have enough money to pay for marketing and PR because they don’t make a big enough profit.
Ebid don’t make enough profit because their fees are TOO LOW.
Simple as that…ebid do not charge their sellers enough to sell on their marketplace. Consequently, they cannot afford to prmote their marketplace to attract the buyers they so desperately need.
If you want cheap fees – go to ebid. You’ll not sell a great deal though.
If you want sell on a marketplace filled with hungry customers – be prepared to pay decent fees to be there. Think of the Trafford Centre in Manchester, Blue Water in Kent, and Meadowhall in Sheffield. Shop rents are mega expensive in places like that. Why? Because they attract millions of shoppers eager to spend their cash morning, noon, and night.
Think about it? You get what you pay for. Buy cheap, buy twice.
Although it is good to see another potential channel arrive here in the UK we shall proceed with caution.
Whilst £50pm is not a lot for many sellers the time needed to load product & pricing and then manage same via our systems simply dwarfs that recurring cost and when opportunity costs are included we have to be sure serious volumes are potentially available via this channel.
Much more attractive to simply expand our existing channel product offers and into overseas markets plus increase our adspend to generate hard sales.
We have already seen similar nonsense with Play where only a few sellers seem to prosper and to be successful even they have to be running permanent promotions via the main splash pages it would seem.
If OnBuy are serious then we would expect then to subsidise key anchor merchants for 3 to 6 months completely free and also offer serious rebates to the initial intake of sellers to drive both consumer choice and bolster their credibility during start-up.
The idea that many sellers are going to pay £50pm plus all the other serious costs to a completely unproven sales channel with no sales history or market presence is an interesting proposition but far from compelling.
We are still waiting for ‘bubbles’ to even register with consumers and the flubit brokerage business model is probably unsustainable given the likely trading margins.
For many sellers the risk to reward ratio is far from proven with a new channel like this.
Our advice – wait and watch to see if they deliver serious customers who will spend money via their marketplace by Q3/4 next year.
In the meantime perhaps better to prepare for Q4 this year!
I’m out.
£50.00 a month on ebay offer’s me worldwide sales options.
Amazon £25.00 Pm offers a known & respected platform to sell from.
You have neither and where are the buyers coming from??????
Well I have registered my interest and I am not to concerned about punting a few hundred quid in the build up to Christmas 2015. What always bothers me more with such ventures is the time and effort investment – ie ar$ing around with buggy platforms. So I would probably go for the £100 a month managed account
Bryn