Priceline.com Inc. has a new scheme for getting rid of old things gathering
dust in the attic: an online "yard sale."
The company is preparing to launch a new Web site dubbed Perfect
YardSale. The site will have the same basic mission of the giant Internet
auctions run by eBay Inc., Amazon.com Inc. and Yahoo! Inc. -- namely,
hooking up buyers and sellers of goods. It will have a heavy emphasis on
"quality second-hand goods" like old video-game cartridges, exercise
bicycles and television sets.
But Priceline, based in Stamford, Conn., says
there will be key differences between Perfect
YardSale and auctions. The new site will let a
user make an offer beneath the seller's asking
price for an item, a system that's similar to the
haggling that goes on at garage and yard sales.
Priceline (Nasdaq: PCLN) argues its method will lead to better bargains for buyers than at
auctions where a minimum price is set.
Jay Walker, the vice chairman and founder of Priceline, also said he
expects Perfect YardSale to attract a different type of merchant -- the
individual seller seeking to get rid of unwanted possessions on the cheap.
In contrast, he argues, much of the trade on Internet auction sites is
conducted by dealers selling the hottest new toys, antiques and other
collectibles. "If you have a VCR, you're willing to sell it for whatever," Walker says.
A more personal touch
Here's how the system will work: A buyer hunting for a camcorder, for
example, will select the features he wants on Perfect YardSale, the price
he's willing to pay and how long he wants the site to search for a seller that
meets his demands. The buyer then will be required to submit a credit-card
number to demonstrate that his bid is serious.
Once Perfect YardSale finds a willing seller, the two parties will arrange to
meet in person so the buyer can inspect the merchandise. If the buyer is
satisfied with the condition of the item, he'll give the seller a secret
pass-code. The seller can then enter the pass-code into the Perfect
YardSale site to receive payment for the item directly from Priceline.
Perfect YardSale will be limited to local metropolitan areas so buyers and
sellers can swap goods in person, eliminating the expense of shipping. The
company says it expects to begin testing the site in a city in the Southeast in
January, with plans to expand it to other cities later in the year.
Luring new customers
Priceline will try to lure bargain hunters online with perks not found at
normal yard sales or most auctions. The company won't charge buyers'
credit cards until seven days after their purchase, giving them a week to
return an item if they're not satisfied. After that, Perfect YardSale users will
have a 30-day warranty period, during which they can receive a refund on
defective merchandise. Analysts briefed on the Priceline service said such
consumer protections will be crucial if the site is to catch on with users, but
they predict the site will face stiff competition from the existing Internet
Priceline plans to make money on the service by charging sellers a fee of
around $1 to list an item on Perfect YardSale. Sellers will also pay a $3 to
$5 fee for every item they successfully sell on the site, while buyers will pay
about $1 for every item they purchase. Priceline is forming Perfect
YardSale as a separate company that is expected to bring in additional
outside investors. The company took a similar approach to launching
WebHouse Club, a name-your-price grocery shopping service.
It will be tough, however, for Priceline to attract enough buyers and sellers
to Perfect YardSale to make it a viable marketplace. To jump-start the
service, Priceline is negotiating with a major rock star to hold a concert to
which Perfect YardSale buyers and sellers will receive free tickets,
according to people familiar with the matter.