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.