Ybag.com sees itself succeeding where boo.com failed with an unusual e-commerce model: Ybag.com lets consumers request goods via the Internet and then invites retailers to tender their best deals for the products. Under this "reverse auction" model, Ybag retailers theoretically reply to the buyer's own personal Ybag (an anonymous mailbox system) within a few hours, allowing the consumer to decide whether to make their purchase online, over the phone or in the store itself. For consumers it eliminates the hassle of bargain-hunting, and businesses reach customers they might not otherwise find online.
But is e-shopping popular enough to justify the launch of another site of this kind? techTrader spoke to Dylan Schlosberg CEO about the advantages that he sees in Ybag over more conventional sites.
Do we really need another e-shopping site? Hasn't the recent collapse of boo.com indicated that we already have too many?
There are so many shopping sites that buyers have no idea of where to go anymore. Ybag is just a facilitator -- the boo.com's out there are our suppliers rather than our competitors. Our site is a result of this explosion that we have seen in e-shopping start-ups. We are using the Internet to match buyers and sellers.
Why did you choose to adopt your unusual sales model?
The reverse auction model offers the ultimate means of facilitating buyers and sellers in one Web site. We were frustrated by the weaknesses of online shopping, with all the auction houses being equally inefficient because of the fact that there can only be one winner. Ybag is focused more on the buyers, letting them receive a response from numerous sellers.
What's your verdict on the failure of boo.com?
I never had much faith in the business model for boo.com -- there is very little potential in the plan to sell clothes and shoes over the Internet at not very reduced prices. I think that clothing on the Internet will always be the weakest product.
I also think that the collapse of boo.com was largely due to mismanagement -- it was started at a time when investors thought that it would be a golden opportunity, and so jumped into things too quickly. I do believe that this has been good for the industry though, as it will make investors look at the value propositions in new business models more carefully, assessing whether or not the revenue can be tapped into.
Do you think that consumers will always prefer to shop in the real world?
Shopping in the real world will always be bigger. By 2025 only 22 per cent of all purchases will be made online. With Ybag there is the facility for physically speaking to the e-tailer, so that we keep the real world human element involved.
What are your expansion plans?
We have recently been approached by a third party in Australia, and are looking to roll through into Europe in the third or fourth quarter of this year. An IPO is always a possibility. We're going through a second round of funding at the moment -- so an IPO could well be on the cards in the first or second quarter of next year.
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