Tuesday 21st May

The Pulse

Can You Kill a Category Killer?

Written by
Paul Hassing

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28
Oct

This might sting a bit …

Here’s a mystery I hope we can solve.

Seth Godin says that, while we should aim high with our goals, we should stay in the realm of reality.

In other words, we shouldn’t try to out-Google Google, or out-Amazon Amazon.

So why is Cash Converters (CC) trying to out-eBay eBay?

eBaying for Blood

I was hunting a rare Kylie Minogue DVD for my wife.

The only copy for sale on eBay was in the UK.

But there was one copy in Australia, on a site I’d never heard of: Cash Converters webshop.

I live near a bricks-and-mortar CC store.

My experience of this facility has been one of haggard locals pushing TVs in baby strollers with a singular sense of urgency.

From CC’s signage and fit-out, I understand them to be a franchised, much-nicer-than-usual pawn shop.

With the amount of TV advertising they do, I assumed they’d have no trouble moving the gear they buy.

And if they did have anything left over, why not simply flog it on eBay?

Yet they’ve gone to the trouble of setting up their own retail site with eBay-like features.

Theory Query

I quizzed CC about this, but received no reply.

Looks like it’s up to you and me.

So far, I’ve come up with the following possible reasons for a dedicated online store:

Build & control the CC brand.
Avoid eBay & PayPal charges.
Obviate any lack of control or certainty about eBay.

I’d be fascinated to hear if you concur with these theories or have better ideas.

Spinning Around

For the record, I bought two DVDs through CC’s webshop.

The transaction was seamless and the goods arrived fast. Alas, one case was broken: it looked like the postie had dropped it.

I emailed CC, who immediately refunded the purchase price and postage without query or rancour.

This was actually faster and more personal than (my experience of) eBay’s issue resolution system.

So, maybe there’s a fourth reason for CC’s online store:

4. To out-eBay eBay!

Who knows: they may just pull it off.

Your View

What do you think CC are up to here?

Have you experienced CC’s webshop (or any other eBay alternatives)?

Has your business ever wanted to beat a ‘category killer’ at its own game?

We’re on the market.

I welcome your bids.

Paul Hassing, Founder & Senior Writer, The Feisty Empire

business goals, competition, eBay, goals, online, online business, selling online, webshop, website

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What others are saying

Author

winno

October 28, 2010 at 9:31 am

Makes you wonder how much money reposession/police auctions could make if they moved online, does it?

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Author

Paul Hassing

October 28, 2010 at 9:37 am

Absolutely! I believe that stuff fetches just a small fraction of its value because nobody wants to trek to Lara at 3 pm on a Friday and mill around for hours in a physical auction shed.

If the cops put seized goods online, they’d fetch a fortune!

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Author

Adam Finlay

October 28, 2010 at 9:44 am

Cop Shop.

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Author

Paul Hassing

October 28, 2010 at 9:45 am

Ha ha!

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Author

Malcolm Owens

October 28, 2010 at 9:52 am

This really is marketing 101. You were correct in stating that they are doing this to build their brand. But also importantly to protect it. As markets evolve so must business or it will be seen as irrelevant which ultimately affects their brand franchise.

People will search ‘on line sales’ and see CC and they may decide to drop in at the local store to see what they have. Creates top of mind awareness, possible preference and the opportunity to achieve a sale either on line (defending against other online retailers) or in the store (remind and recognition).

The customer may then choose to visit a CC site but if they don’t have it locally then the customer will be prompted to look on their website thereby not losing the sale to EBay.

The very nature of the CC business is that their stock would vary significantly from store to store so it makes sense to open the entire catalogue to the customer base.

So they are not taking on a category killer, rather moving with the times and expanding their potential customer base.

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Author

Malcolm Owens

October 28, 2010 at 9:56 am

Did you know that you can sell little plastic bags of Ajax in Lara for $25 a pop? Cant hang around too long though.

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Author

Paul Hassing

October 28, 2010 at 9:59 am

Golly, Malcolm. That fascinating treatise just sounded like Marketing 787! I’m very grateful for your expert analysis.

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Winston Marsh

October 28, 2010 at 11:13 am

Its all very simple Paul!

If their customers like dealing with them at their bricks and mortar store they may want to occasionally visit them from the comfort of their own home.

I’m sure that there are stores you shop by both visiting and webbing. Dymocks and Borders are two on my list (but I love books and booksellers and although Amazon gives me my jollies sometimes its nice to get physical).

BTW what was the broken CD… someone may want to sell you one and you’ll have started http://www.ePaul.com?

As Malcolm says, they’re protecting their brand and their business.

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Author

Paul Hassing

October 28, 2010 at 11:19 am

Great to see your smiling face, Winston!

Thanks for your analysis too. Once again I’m learning more than I imparted.

I’m a statistical anomally. I only enter bricks and mortar shops under matrimonial duress or filial duty. Why do you think I’m always here to answer comments?! I know you’re a much more in-person chap. And I envy you.

The DVD was Kylie’s first (comeback) Sydney concert. As I had a spare case, the shop let me keep the disk itself AND get a refund. This impressed me greatly.

I’m sorry I don’t catch the ePaul reference. What am I missing?

With best regards and many thanks for your comment.

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Author

Carbonite Australia

October 31, 2010 at 7:27 am

Its been mentioned several times and in my opinion it is also brand protection. Given they have an established client base why not begin to move the customers online or catch their online transactions as well. Setting up a store within eBay would have been great, but not sure of the brand restrictions you have and then again do you really own it, or areer you simply renting space and promoting someone else’s establishment.

I don’t think they are trying to kill off ebay, simply setting themselves some goals that the future is online and they need to prepare for it. They have brand awareness and so its natural that expanding it into the online world is what they should do. it also means they can expand into other online businesses.

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Author

Paul Hassing

October 31, 2010 at 7:36 am

Thank you, Arthur. It’s always refreshing to get your clear, logical assessments of these things.

Thanks to you and the others, I realise my title for this post was quite wrong. But that’s the beauty of this community: the learning never stops. Best regards, P.

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Author

Winston Marsh

October 31, 2010 at 5:42 pm

I’m sorry Paul that you “don’t catch the ePaul reference. What am I missing?”.

Sorry, for the delay in my reply coz I’ve been travelling but to explain Paul… I was obviously too smart by half!

When I said that someone may want to sell you a CD and you’ll have started ePauldotcom I was suggesting that if you begin trading it might be the genesis of a huge web site that competed with e bay. It would be named after you. It was unfortunate that there was a web site of that name that conveyed a meanungless message you obviously puzzled over for hours.

A thousand pardons Paul!

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Author

Paul Hassing

October 31, 2010 at 6:19 pm

Ah! NOW I get it. If you’re too smart by half and I’m dumber than the average animal bar, that puts me off by a factor of eight. No wonder I didn’t get it! However, all has now been revealed. Many thanks, Winston!

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Author

Sherryl Perry

November 1, 2010 at 5:55 pm

My initial reaction was who in their right mind competes with eBay? But why not? Personally, I try to support the “little” guy. Just like I try to buy “Made in the USA”. Why not? If we band together by supporting each other, we can keep the entrepreneurial spirit alive. To me, it’s worth it.

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Author

Paul Hassing

November 2, 2010 at 6:12 am

Great to hear from you, Sherryl. I like your ethos. And I LOVE your piece on content scraping. You’re quite a find; lucky us! Thank you for commenting. P.

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Author

Paul Hassing

November 9, 2010 at 8:02 am

Another relevant post from Seth:

http://sethgodin.typepad.com/seths_blog/2010/11/problems-and-constraints.html

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