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VCs Pump Money Into eBay Rivals Like Swoopo

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imageLook out *eBay* — VCs keep lining up to invest in your competitors. The latest auction site is Swoopo, which has nabbed $10 million in a second round of funding. August Capital led the round, bringing the startup’s total raise to $14 million; its first round was from Wellington Partners in 2006.

This follows luxury goods auction site Portero’s $6.6 million in funding in February (via TechCrunch), and a surge in popularity (and profits) for niche social marketplace Bonanzle (per ReadWriteWeb). Of course, eBay (NSDQ: EBAY) dwarfs all these bit players traffic-wise, but each new site chips away at the giant’s pool of available buyers and sellers as it gains popularity — a trend of market share loss eBay can’t afford.

The company is facing a number of challenges: its shift away from catering to small merchants that thrived on auctions, to a focus on mass sellers and on-the-spot sales has cost eBay some of the brand equity that separated it from other sites like *Amazon*. As such, Compete reports that fewer shoppers are returning to eBay, and the average amount of money they spend per visit has stagnated. This was also reflected in the company’s lackluster Q4 performance.

Founded in Germany in 2005, Swoopo launched its U.S. site (and a Cupertino, Calif. office) in 2008. Designed to combine “entertainment” and e-commerce, the company says it auctions over 10,000 items like computers, to game consoles and even cars per month; the trick is that buyers actually pay to bid — they can buy bids, which cost $0.75 in “packs” of up to 500 — creating a somewhat high-stakes game. Release.

Photo Credit: liewcf

17 Responses to “VCs Pump Money Into eBay Rivals Like Swoopo”

  1. @carolpsp: i dont think sites like that is a scam. im pretty sure that the rules and mechanics of the bids are very well explained in the manual or guide in their website. besides no one is forced to participate on the bids in the first place.

  2. Hardly a "refugee" from anything. I'm a current power seller on eBay and have been there 11 years on 2 different ID's. I have most certainly "enjoyed success" on eBay up until very recently(the holiday season was especially profitable). Sales fell off a cliff about mid-February and haven't returned since. Nothing has changed in the way I personally do business, and I still offer the same things I always have. It's the site itself that's on a rapid decline due to their inane policies, rampant fraud, and their desire to run off the very people who made it the powerhouse it once was.

    On the other hand, Bonanzle welcomes everyone, and within 1 month of being registered there I've sold 12 items(more than I sold on eBay during the same time period). For a site that is still relatively unknown and only has a userbase of only about 45,000(and mostly sellers at that), that's really not -that- bad– not to mention I sell items that are completely non-essential, something that can be difficult to sell in the current state of the economy. No, it currently won't keep me afloat, which is why I still turn to eBay(even though that's pretty much failing as well), but I do believe that given time, Bonanzle will become a healthy competitor. It's certainly the best "alternative" selling site that's come along in quite some time.

  3. carolpsp

    Any seller that thinks Swoopo is a good idea must have also fallen for Bernie Madoff's speil. Swoopo is just a complicated ponzi scheme.

    Save your time and energy and try any other site.

    Personally I've done great at eCrater and Bonanzle. Yes I've sold more than the 5/ month of the above poster. How about 5 + / week. No I'm not going to get rich at that amount. But it's a whole lot better than zero since eBay doesn't want me any more.

  4. Not everyone is a refugee

    Not everyone that sells at Bonanzle are eBay "refugees". I never sold on eBay because I didn't like what I saw as a potential seller.

    When I first looked at Bonanzle it looked easy and friendly (not my impression of eBay), and the low fees really appealed to me. I have seen several sellers that still have an eBay mindset, and they don't seem to be doing well at Bonanzle. Bonanzle is a different fish altogether, so why expect it to be like eBay or anywhere else for that matter.

    Bonanzle was started less than a year ago. A huge portion of the buying population has yet to hear about or experience Bonanzle – a site that does not yet have a 10 year history. eBay started out much the same, it took time for it to get the traffic and sales it has today.

  5. Sharon

    As far as investments in upcoming growth companies are concerned, I'm hoping that Bonanzle offers a private placement. (For those of you that aren't familiar with this process, the shares cannot be sold for awhile after you get them. It could even take years before you can trade them, generally after an IPO is done) but boy can you make some money!

    I see Bonanzle being so perfect for this kind of offering. And I would hope this would happen before they went in with any VCs that could possibly have a controlling interest.

  6. BZ will not keep you busy

    I'm a seller, both on eBay (EB) and Bonanzle (BZ)
    EB has made and continues to make very bad decisions, however, they still are the #1 site.

    BZ will never amount to anything but a "refugee camp", for ex-eBayers who never enjoyed success on th EB site. I visit the BZ site 3-4 times a day, for the entertainment, thats always to be found on the forums.

    If 0-5 sales a month make your World rock…BZ is the right place for you. Anyone with greater expectations, will sell on both sites.

  7. Kbarrd

    When I joined Feebay in 1998, it was a great venue to buy and sell unique items and had the feel of a big garage sale. Over the years it has shifted to the big box stores and drop shippers of junk that can be found cheaper locally. The total contempt that Feebay holds towards the smaller sellers is unforgivable.

    I am now exclusively buying and selling on Bonanzle. They care about their members and, for the most part, the community is there to help with their expertise and encouragement. There have been some minor changes along the way, but this is to be expected with any new venture. The support from "The Boyz" is fantastic and they want only the best from all of us. Even if Feebay were to change back to the way it was, (which is never going to happen), I still would not go back. Just go to bonanzle and find out why so many of us are there!

  8. Ebay has been suffering for some time now. I am a powerseller on Ebay. I based my decision on closing my store there on my sales. They slowed down to a point I was not making money. I still sell some auctions but the traffic IS NOT there. When I closed my store in Ebay I opened in several places including Bonanzle. Bonanzle has shown the most traffic for me. They make it easy and fun to sell and buy. I do not feel my booth just sits there like in some other venues. There is interaction everyday from just about anyone. No, it is not for everyone, but it is for me.

  9. After many years of fun and excitement on eBay, the fun stopped for us after many changes which created a "mine field" for sellers. This is not the eBay created by Pierre in the mid 90s!

    When eBay stopped working for us and the fun was gone, it was time to move on to help other small selling venues grow. There has been a rise and demise of many! A few have done well – (even in this economy).

    We sell on a couple of venues and have observed growth. Tried yet others without much success. The best selling platform that we have found has been Bonanzle. Since August 2008, we have utilized this selling venue with success. Entered the site when it had less than 1000 registered users and a small inventory that has evolved into a viable selling venue – with now over 1,500,000 items in inventory and over 43,000 users. The numbers of users and inventory increases daily.

    It does not take a rocket scientist to see that in even in today's economy, a small online business can thrive. The key is having the wisdom of keeping something simple and paying attention to seller/customer needs. When a giant such as eBay spinned ahead and out of control to achieve "profit" goals only, it left behind the people that helped it grow and the "simplistic" principles on which it was established were tossed out.

    Looks to us that adopting old and tried principles/ideas and listening to your customers "still works" in a highly technological world.

    We will try other selling venues in our hobby to sell. It is always wise to diversify one's selling portfolio.

    Bonanzle is a site to watch, and am sure that any investors would chomp at the bit for a chance at this one!

  10. eBay has not been a good choice for me for quite some time now. And since they gave my personal information to a user with only a feedback of 3 AND that they had SUSPENDED for "Suspious activity" I havent listed on there at all.

    There are too many other sites available to sell and buy on, and some of them ARE gaining ground. I highly recommend both buyers and sellers to start using these sites more.

    I personally am on Bonanzle, have been since August, and love the freedom and flexablity the site offers. And I also enjoy the fact that ALL sellers on Bonanzle…large and small, are aloud input into the changes and improvements made. The owner has a list of possable improvements that are on the table that EVERY seller can go and vote on. That alone shows me that Bonanzle VALUES my input, and respects every one who comes on their site!

    Is Bonanzle for everyone….no…but I do encourage all to take a serious look at the site when you are looking to buy….or are Shopping for a new home for your Business.

  11. bonanzler

    I haven't experienced a change in rules or regulations, so I'm not sure what you do on the site that "changed". I just sell and buy. I do know one thing for sure, I like Bonanzle much better than Ebay. And if some other site comes along, I welcome it and will check them out!. I'm out here to make money, the more venues I can sell from the better!

  12. ranched out

    Hey, cool your jets bonanzler!

    Bonanzle isn't all that great! They change rules and regulations for the sellers without notice, freedom of speech on the forums is limited to an elite few and while the fees may be quite a bit lower than ebay, their is a definite favoritism of those few felt amongst the majority of sellers.

    Small sellers, keep searching for greener pastures.

  13. bonanzler

    I agree! I stopped selling on Ebay just for this reason. I packed up my things and moved into Bonanzle. Nice view, clean air, peaceful living! Hey what this?…..My earnings aren't being sucked up by seller fees??? We have room for everyone! Come on over and check it out!

  14. When are the stockholders going to realize that ebay's CEO is taking them for HUGE fools??? He touts, "Don't look at ebay's numbers. I've got a new plan", but the "new plan" is STILL to kill ebay, ebay Inc.'s bread & butter. "Here, look at Paypal and ignore how I am destroying ebay's core and millions of what WOULD have been future patrons". Get rid of him before there is nothing left to save of ebay or your money!

    Read what his own employees think of him at glassdoor.com. Read the sentiments of (ex) ebay users by searching the internet for Terminate ebay's CEO, John Donahoe at petitiononline.com

    It's time to look out for YOUR best interests and fire the person responsible for YOUR losses!

    Educate yourselves about what ebay's CEO, John Donahoe is REALLY doing to ebay Inc! Because of Donahoe's policies, sellers are constantly getting their items stolen from them by their buyers with the help of ebay Inc. and Paypal! Donahoe's policies are aiding thieving sellers shill bid against honest buyers! The site has turned into nothing more than a free-for-all for scammers from both sides. The honest buyers and sellers are leaving by the droves and if you really care about your money, I'd suggest you look at the REAL facts rather than buying into Donahoe's smoke and mirror parlor tricks! Take a good long hard look at ebay's recent decline and pay particular notice to the FACT that it began when Donahoe and Whitman teamed up with their "Disruptive Innovation" scheme against ebay. To hide the reality, ebay is purging it's boards by deleting honest posts and by suspending all members who dare post the truths about ebay's deceitful practices.

    Search the internet for this title, then decide how long you want your name connected to such a corrupt business: "Battle over bag: Seller loses out in online sale".

    Millions of online shoppers and sellers have already left, more are leaving. Either take your money out of this stock or fire Donahoe to save your investments!

  15. Now is certainly the time for these small start-up's to get themselves out there and seen. eBay continues to shoot itself in the foot over and over again, alienating sellers and buyers alike. Without some drastic correction– and soon– they're going to become merely a bad memory to most people who are moving on to sell and buy on sites that welcome their presence.

    Your article states that fewer shoppers are returning to eBay, and the same is true of sellers. Most are being actively discouraged from using the site and those who continue to do so anyway find their listings buried in a biased search that favors large 'box' sellers of mass-produced garbage that can be purchased at the nearest WalMart, often for less. Not a very good way to treat your paying customers.

  16. Ebay is going down. As a 10+ year seller on Ebay I know first hand that the traffic simply is not there OR Ebay is purposely manipulating traffic away from small sellers thru its vicious best match search. Either way, Ebay will be sorely sorry when they realize that small sellers and the buyers who follow them were the life's blood of Ebay's core. Sellers, too, have badly tarnished Ebay's reputation by simply telling the truth about the new, outrageous and unfair policies Ebay has enacted and how hostile the selling environment is on the site now. Sellers are leaving and have been leaving…they are taking buyers along with them or discouraging potential buyers by telling them about the real Ebay.

    In the past year Ebay has not helped the sellers to sell or the buyers to buy…they haven't enticed one new buyer to the site nor are they very successful in woeing large companies to list on the site. The past year has been an utter failure for them (as shown in the holiday season fourth quarter of last year and a 16 percent decline in sales!) – yet to hear them speak you would think they are still wildly successful and it is a privilege to be allowed to sell on their site. Its laughable. Ebay management is killing off Ebay slowly but surely….check the first quarter of this year when it soon comes out…then you'll believe what I'm saying ;-)