By Leslie Walker
Washington Post Staff Writer
Thursday, August 12, 1999; Page E1
Listen up, e-tailing guinea pigs. A spate of new shopping services has rolled online in the past six weeks, each upending traditional selling models with its own twist at helping buyers.
The new services debuting this summer – which include eWanted.com, Respond.com, NexTag.com, Imandi.com and Mygeek.com – all fall into the "reverse" shopping-agent category. They learn what buyers want and try to connect them with far-flung sellers. Priceline – the grandaddy of reverse online salesmanship – is experimenting with the concept like a crazed auctioneer. It is considering jumping into person-to-person auctions with a kind of reverse eBay.
None of the services appears to have a clue how to make money, but what do you expect? This is the Internet. Web marketers say their goal is wooing and building ever-larger bases of customers, not raking in profits, because e-tailing is still so embryonic.
One service I find intriguing is eWanted.com, the Net's first whack at a real reverse auction. The idea was born of the founders' experience trying to replace a cracked screen on a laptop computer. Merchant after merchant told Tony Ghanma the screen would cost more than the laptop, prompting Eman Ghanma to ask her ex-husband a question: Instead of having people post an item for sale and having buyers bid up the price, why not let them list what they're looking for and have sellers bid down the price?
"I'm the software guy. I said, 'We can do that,'‚" recalled Tony Ghanma. The Ghanmas quickly decided to start their own business. Actually their second one. They sold their first, a computer retailing operation, in 1994.
On their two-week-old Web site, buyers anonymously post detailed descriptions of what they are looking for. Sellers review the listings and enter "bids" or selling prices. Sellers can see one another's bids, putting pressure on them to drop prices. EWanted, like most of the new services, keeps buyers' identities secret until purchasing time so people won't have to worry about looking like cheapskates.
EWanted's auctions run for the time buyers choose, like auctions on eBay, but software coming soon will also allow eWanted buyers to invite sellers to a private "negotiating table" where they can haggle over prices in real time. EWanted charges no fees yet but eventually hopes to collect a modest commission from sellers.
While there are few buyers or sellers at the site (3,000 listings and 1,500 offers so far), I view the "most eWanted" list and similar services as being at the vanguard of e-tailing. For if eWanted can attract even half as many participants as eBay, which typically has more than 2 million items for sale at once, it could become a helpful place to find rare items. You might, for example, search eBay for a lithium battery for your video camera, then, if you found none, click over to eWanted and put up a month-long posting.
I got a glimpse of eWanted's value for finding unusual items in the domain-name category. "Tony4" posted that he was seeking a Web domain name for his online insurance sales operation. The request has drawn 12 offers, ranging from $300 for Ins-Market.com to $3,500 for InsuredWeb.com.
Respond.com and MyGeek.com do something similar to eWanted, although they reach out to offline merchants who may lack a Web store. Buyers fill out an online form describing what they're looking for in any category, and the services forward those requests to merchants, which pay fees to get notified in specific areas so they can respond via e-mail.
I fired off a batch of requests to Respond.com last week and was disappointed that no one offered to sell me a Pac-Man software game or a rare Singer sewing machine. Three responses came back about a solar heater for a backyard swimming pool, but none provided good installation advice in addition to the price quote. On the other hand, I got a dozen helpful e-mails with prices and advice about digital cameras selling for under $500. And I liked seeing clerks include their names, telephone numbers and e-mail addresses, even though an annoying number of merchants said, "We are unable to fulfill your request but think you should check out our store anyway."
NexTag.com, which recently launched a price-negotiation service for computer products, is aimed at buyers who already know what they want. It allows them to click on an item for sale, offer a lower price and watch sellers make counteroffers. "We make the process of negotiation much more comfortable," said founder Purnendu Ojha. "You are not haggling face to face with someone."
NexTag joins vaguely similar services that launched in the spring and negotiate volume discount for buyers – Accompany.com and Mercata.com.
The best-known reverse shopping service is Priceline.com, which asks people to name their price for surplus airline tickets and shops those bids to 22 participating airlines. Despite the complex rules requiring consumers to accept at least one stopover and a wide range of flight times, Priceline had collected bids on more than 5 million tickets by the end of this June. It had sold 762,000 of them. Analysts, however, remain skeptical and note the company had to sell many of those tickets below cost. Priceline has since expanded its reverse pricing model to include hotel rooms and home financing and is experimenting with car sales.
I recently tested Priceline on a trip to San Francisco, where regular air fares ranged from $1,500 to more than $2,000 because I was buying the ticket three days in advance. Priceline rejected my first bid of $620. To bid again, you have to change an airport or date of travel, so I extended my stay one night and upped my offer to $820. Delta accepted. I wound up flying from Washington National to San Francisco with a 50-minute stopover in Cincinnati.
Priceline reported in a Securities and Exchange Commission filing last week that it is weighing whether to license its model to two companies. One, it said, "is developing a consumer-to-consumer business in which buyers would make conditional purchase offers to acquire goods from other consumers. The other would enable consumers to use the Internet to name the price that they are willing to pay for retail merchandise, which they would pick up from participating retailers."
An equally tantalizing new service is Imandi.com, founded by former Microsoft Corp. employees. It lets people request price quotes for local services such as house cleaning and landscaping, but the bidding has been restrained by lack of participation from local merchants and kludgy software that can't really let consumers evaluate more than price.
Give it time. These services, for the most part, are inept infants we wouldn't trust to evaluate anything important yet. But as the Net continues its rapid transformation into a gigantic global retailer with unmanageable virtual aisles, we are going to need all the help we can finding stuff.
By then, these reverse shoppers should grow into serious allies in our war against the chaos of the Net.
Leslie Walker's e-mail address is email@example.com.
© 1999 The Washington Post Company