Distributed Classifieds vs eBay

Recently eBay has been getting beaten up as it does fee restructuring.  It makes me wonder if an old idea is ready to come to life:  Distributed Classifieds.

Why Do We Need Distributed Classifieds?

When you’ve got something to sell, you should be in control. You have the goods, so you chose your marketing, you chose your price, and you chose your guarantees, service, and customer support.  Why should any company – eBay included – dictate to you how much they get?  Shouldn’t it be the other way around, and you tell eBay how much you’re willing to give to them?  After all – you are the seller!

eBay gets away with this because they are a centralized server.  They control everything, but also provide the product base from their sellers and the client base of buyers.  Since they created the market, you pay them to be part of their world.  Unfortunately, you sacrifice a lot of control and pricing when you do this.

Distributed classifieds allow multiple markets to co-exist and put the seller in control of the price.

How Distributed Classifieds could work – Finder’s Fees

With a distributed system, the seller would start out by posting his classified.  Imagine something like this:

Red Bicycle For Sale – $200
2 years old, good condition.
Berkeley, CA
Feb 20, 2008 2:13pm
Finders Fee:  $10

All of this looks pretty standard.  But what is the “Finder’s fee?”  The Finder’s Fee is the seller’s proposed “listing price” to any market.  A market is anyone that helps find a buyer for this product.  eBay, for example, could be a market.  Or, “John’s House of Bicycles” could be a market.  For whoever finds a buyer for this item, the seller is willing to pay $10.

Why is This Good?

In this new world, the seller doesn’t get locked into a single market.  With eBay, once you’ve listed your items you are obligated to sell through eBay even if a higher bidder emerges from another market.  For example, you couldn’t post your item both in the newspaper and also on eBay without losing reputation on eBay.  This is not right – you should be able to sell to the highest bidder under any circumstances.

Search Glues It All Together

One problem facing sellers today is which market to sell the products on.  Choices are numerous, but you want the ones which are most profitable, easiest to use, and have the largest collection of buyers.  Examples of markets you could choose include Craigslist, eBay, your newspaper, a piece of paper on your dorm bulletin board, etc.

But, shouldn’t you post it once, and have the markets find your listing automatically?  Just as search can find web pages, what if each market crawled the web looking for items for sale?  Instead of you going to the market, you simply post your listing, and they find you.  RSS has led the way here – using pingservers, you could post once, ping a few servers to let them know of your new posting, and then a plethora of potential markets would pick up your for-sale item.

Other Details

I’m leaving out lots of details about how reputation systems work, how to handle auctions, how to guarantee payments, and more.  Some of these problems are easy, some are hard.   But I believe they can be solved.

Once solved, the world is a better place:

  – Sellers rejoice in selling to the best customer. 

  – Buyers rejoice in getting lower prices. 

  – Businesses rejoice because there is no central system monopoly (eBay!) for all classifieds.

A distributed eBay would rock.

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