This post continues my thoughts on my previous post Social Network Escrow Service. I had started to talk about the importance of escrow services in relation to some Web 2.0 trends and I would like to expound a little on that here.
One trend we are reading about today is what is coined as “vertical social networks”. Some examples of these are Etsy and Threadless and all the sub-sites at Ning. It is turning out that these kinds of social networks are getting more popular and that they are going to increase in number.
Vertical social networks, by their nature, focus on one topic in a web 2.0 social way. Instead of discussing general topics, as do the social networks at MySpace and Facebook, these vertical networks circle around a particular subject.
One particular subject the above mentioned sites focus on is “user-produced products”. Threadless focuses on t-shirts and Etsy focuses on a variety of user-produced products. This is another trend we are seeing and is being coined “crowdsourcing”.
When we combine these two trends, we begin to see what other services are needed in order to support this combination of trends. In a nutshell, we get a vertical social network of people who are producing their own products that want to sell them to others. The need, therefore, is a way to get the sellers and buyers to exchange the products and the money.
The need is no longer fulfilled by today’s present shopping carts because there is something very unique about these crowdsourced sites. The problem is the products are often not produced until someone buys them and the buyer does not want to pay for something which does not exist.
An escrow service would fill this need. It would alleviate the seller’s concerns because he will know someone has already allocated money to buy his product, once he produces it. It would help the buyer know the seller is obligated to produce the product in order to get paid, otherwise the buyer could get a refund.
The other thing today’s shopping carts do not fulfill is the issue with the inventory. Today’s shopping cart software keeps track of all the inventory. But in a vertical social network, the inventory tracking of the products should be maintained by each seller, especially because some or all of the products for sale have not even been produced yet.
The nice thing about the social network aspect is that it permits the necessary conversations between buyers and sellers to be carried out before the order is placed, that is to say before the funds are put in the escrow. In these conversations, the products details are discussed, including final pricing, expected delivery date, and shipping information.
One final thing. Today’s shopping carts can also calculate shipping charges. However, they do not work well for international shipping. Sellers are more informed about their own local shipping costs and therefore it is best to permit sellers to calculate their own shipping charges and relate this info to the buyer during the conversations.
I hope you can begin to understand the need for inexpensive escrow services to support the coming ecommerce vertical social networks which some are coining “s-commerce”. Please let me know if you know of any escrow service I can integrate into my social network. Thank you and good luck if you happen to be developing this kind of service yourself.
Filed under: Escrow Services | Tagged: crowdsource, escrow service, s-commerce, scommerce, shopping cart, vertical social network |
Great thoughts!
Allow me to introduce Pure Verticals’ patent-pending technology that satisfies the processes you are describing — it’s called “e2VC”. Social Network site members (entrepreneurs) are able to enter products (ecommerce) and video ads (advertising) into e2VC and literaly publish their products or ads into: a) their own social network, or b) any social network that has the e2VC technology integrated. Pure Verticals uses PayPal to handle all payments. The model is a shared revenue model, where the business (member/entrepreneur) shares a percentage or a flat fee (their choice) of the product sale w/ the endorsing member – oh, did I mention “Mugzy” yet? Well, Mugzy works alongside e2VC and is a technology that allows ANY member to endorse products or ads in their UGC (text OR video!). And, all purchases are handled on the social network site (the buyer is not forced to another site to complete the purchase).
Come take a look at our demos, this will help you grasp the value, efficiency, and uniqueness of these models.
http://www.pureverticals.com/demos
Thanks for the article!
Howard
Thank you, Howard, for introducing PureVerticals.com to my audience and I. I briefly took a look and I somewhat understand your service.
There is one thing I see different than what I am looking for. It seems to me all the products being offered for sale have an inventory, i.e. have already been produced and sit on a shelf. While some of these products could be produced on-demand, can a buyer request any customization? If so, how is the price adjusted by the seller? In other words, is there any trackable communication between buyer and seller as a record of what the buyer is purchasing?
On the other hand, your service is quite unique from any other I have seen. I think you could do quite well if you target the right market with the right products. Good luck to you!
Fidel,
Thanks for reviewing out platform – and thanks for the kind words.
To answer your questions, the products we show in out demos are, in fact, existing items. However the technology works in the same way for “on-demand” merchandise. It’s completely up to the supplier – if they have a product image, and want to feature the item in user-gen content on a vertical social net, they can do so. Once an order is received from a customer, they can engage directly with him/her if there are special requests, customization needs, add-on items, etc.
The basis of the e2VC technology is to provide both sides of the content equation – the creator and the publisher/site owner – with a revenue stream.
Cheers!
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Did you ever find an acceptable service? I too am looking for this.
Hi Joe,
Actually I have not located any escrow service I could integrate into my service. I have read and received various comments about how an inexpensive escrow service would be difficult to produce, since there is insurance for liabilities to pay. I believe the lowest priced escrow service I ran into started at about $10 flat fee plus a percentage of sale price. This is still prohibitively high for a micro-retailer selling goods for under $10 each.
There is one interesting conversation I had that seems to imply that today’s social network technologies of using video comments, ratings, blogs and comments may be sufficient to alleviate mistrust between buyers and sellers. In other words, if either buyer or seller does not keep his end of the deal, then the opposite party can immediately leave his response on the site in a permanent manner for others to see. I am tending to lean towards this view and hoping this would truly circumvent the need for escrow services for low-priced items. One drawback is the lack of multilingual support. If an unhappy customer leaves his comments in Russian, it is a bit cumbersome to get it translated into your language.