2/5 – Design Goals for COMC.com

Note – This week we are writing a series of blog posts covering several topics.  When assessing the large volume of information that we want to communicate, it made sense not to simply pour it into one extremely large post, but to separate it out into bite-size chunks.  Please consider each section in light of the others, and not as an independent post.  The subjects we’ll be covering are:

1/5 – The Big Picture
2/5 – Design Goals for COMC.com
3/5 – Beta Testing New Markets
4/5 – How to Flip on COMC.com
5/5 – 5th Anniversary Special + Ad Campaign

2/5 – Design Goals for COMC.com

Here are some principles that we are using to guide the design of COMC.

Diversification
Check Out My Cards is very specialized, and that is great. We love that and don’t want to lose its appeal. However, we need to make sure that we have a solid foundation that will not be susceptible to things like lockouts. Last year we got very lucky. If both the NBA and NFL had been locked out, that would have significantly impacted our business. When the MLB and NHL went through their lockouts many card shops went out of business. Since you are counting on us to be here in the future, we need to protect your investment with a stable foundation. To do this, we will be gradually and carefully expanding into new markets so that a shift in any one market will not rock our foundation.

Network Effect
We have seen that our service has a “network effect.” Similar to facebook, twitter, youtube, and other websites that have gone viral, the more people that use our service, the better it is for everyone. The more sellers & the more content for sale, the more buyers will find the site, the more sales will be made… Also the more inventory for sale means that there are more things the sellers will want to buy so that they won’t have to worry about the 20% cash-out fee.

To attract more sellers and more content, we are going to expand our service to new markets. We will start with closely related collectibles, but you can speculate about directions we might head in the future. For example, imagine a day when you can use the store credit earned from selling trading cards to buy… clothes for your newborn. (Very long term example, but there is currently a very successful company doing consignment of baby clothes.)

Psychology of Free
This is often not intuitive, but most people are actually willing to pay significantly more for an item if they get “free shipping.” Evidence for this can be seen by Amazon’s efforts to offer free shipping. You can see this in nearly every successful shopping website today. This is the trend of the future. Amazon’s Prime service appears free (after paying the $80/year membership fee), but Amazon’s fulfillment service actually charges the seller $1 per order plus $1 per item to pick & pack, plus they charge the seller a shipping fee per pound, and a storage fee. Those fees are then reflected in the seller’s markup, but they appear to the buyer as “Free Shipping.” With this strategy, Amazon is by far the most successful shopping website on the planet.

We are going to experiment with our own way of achieving “Free Shipping.” Buyers want to know how much it will cost to get the product in hand. They don’t want to be surprised by extra shipping fees or confused by how to keep those fees to a minimum. We believe that giving buyers “Free Shipping” will generate both increased sales and increased profit margins for our sellers. As such, sellers want this too. Now the challenge is figuring out a way to do this without making it a burden on the sellers. Don’t worry, I won’t forget about flippers. You are near and dear to my heart. That was one of the main reasons why I built this site. We have a plan for people that are only intending to relist items to get them without fronting the shipping costs.

Research on the market reaction to free shipping has been consistent. UPS commissioned a study on buy decisions.  When asked the question, “Thinking of the last time you put items into your shopping cart but did not finish the online purchase, which of the following best describes why you did not complete the transaction?” the most common response was “Shipping and handling costs were too high.”  There’s a lot of other relevant comments in the UPS study on strategies for free shipping.

The Motley Fool studied the psychological impact of “Free” outlined in Duke professor Dan Ariely ‘s book Predictably Irrational, where in experiments people reliably chose “free” options that were demonstrably not as good a deal.

There’s a mountain of research that concludes that buyers respond to the idea of “free.”  On COMC.com we will have a “Free Local-Pickup” option that will be available for people in the Seattle area, and we will be gradually adding more “Free Pickup Locations” throughout the US and Canada. More details about this program will be released over the coming months. For the people that want the items delivered to their home, they will have an option to pay a flat $2.99, and eventually we might add an Amazon Prime style membership where for something like $80/year we give unlimited free shipping.

Still not convinced?

We invite everyone to see this in action before settling your opinion.  You will get a chance to try it before you make any decision.  Check Out My Cards and COMC.com will be running in parallel, so everyone will be able to see both side by side.  The storage fee threshold is about to become a lot more generous, allowing your card prices and profit margins to increase.  Give it a try before you decide.

We will continue listening to feedback and adapting as we go. We have already rolled up a bunch of feedback into design changes this week. For example a lot of the frustration appears to be around how flipping might work. Well, have a really cool way to address that. We will talk more about that in post 4, and you will be able to play with it in about a week.