If you've heard of the Philadelphia startup Half.com, it's probably because the company persuaded Halfway, Ore., to change its name. The newly minted town of Half.com got plenty of buzz, but no one seemed sure what its corporate namesake actually planned to sell. On Jan. 18, Business Week peeked into the business model.
The site, which launched Jan. 19, provides what Business Week's Amy Barrett calls "cyberselling for the garage-sale set." It's the place to buy and sell used items too mass-produced for Internet auctions. The shipping model is unique: When you list three items for sale on Half.com, it sends you packing materials. When you sell something, you pack and ship it yourself. Half.com picks up the tab for postage (via Net postage company Stamps.com), charges your customer's credit card, and sends you a check. One e-commerce analyst sees a problem here: "Half.com is, ultimately, beholden to an army of people who are not professional merchants to set their customer-service standard." In other words, if a Half.com seller forgets to ship your purchase for a few weeks, it's unclear what the company could do about it.
Half.com gets 15 percent of each sale, which isn't much when you're talking about a $6 used CD. Maybe that's why Half.com includes inventory from more than 40 used bookstores: Volume will probably be important to its success. It might also add more expensive items like PalmPilots later. In higher-end markets such as electronics, Half.com "could face brutal competition" from bigger-name Netcos like Priceline. Perfect YardSale, a Priceline operation for selling used equipment like VCRs to nearby buyers, launches later this month.
Kudos to Amy Barrett for keeping the Half.com, Ore., hype to a minimum and for balancing the company founder's boundless enthusiasm with a few cynical analysts. In the end, however, Grok is even more skeptical of the bargain-basement company's chances for eventual profit. Which doesn't mean we won't buy some used books from it in the meantime.