iOffer.com, the 'Make Me an Offer' Ecommerce Site

by Greg Holden

Wouldn't it be nice if buyers and sellers could
exchange goods online the way they do in the real
world? When you see something you want in a
physical store or marketplace, you don't keep an
eye on it for a week and then bid furiously on it
just a few minutes before a predetermined ending
time occurs, do you? If sales worked that way in
the brick-and-mortar world, businesspeople would
find it hard to survive. Instead, you either pay
right away or make an offer and then bargain with
the seller until you agree on a price.

That's the kind of thought process Ryan Boyce and
some friends went through in 2002 when they created
the online marketplace iOffer (http://www.ioffer.com).
This site, which is becoming increasingly popular,
allows buyers to make offers and to negotiate with
sellers without a hard-and-fast deadline.

"There was a group of us in the beginning; some were
friends, and some had worked on a Web site called
eWanted.com," explains Boyce. "We were in the right
place at the right time. One of us was using eBay to
buy a hard drive, and he set his alarm clock to get
up at 2:30 am when the auction was ending. He looked
tired when we all met the next day. We did some
brainstorming and said, "There's got to be a better
way to buy something. There are plenty of other hard
drives for sale online, so there's no reason for him
to be up at 2:30 a.m. to save a couple bucks. Why
couldn't he just buy it the way you would in
real life?""

iOffer was launched on May 1, 2002. Boyce, who
started out as a network engineer, is now CEO of
the San Francisco-based company. He originally
helped set up the infrastructure and network for
the site, and still does some programming
when needed.

The site provides a dramatic contrast to eBay's
auction sales formats. First, you don't have to pay
anything to create a listing on iOffer. You can set
a starting price if you wish. But if you don't know
what something is worth, you can simply invite
prospective buyers to make offers. In this case,
you leave it up to the buyer to suggest a reasonable
price. You can either accept that price or make a
counteroffer. Offers go back and forth until a price
is agreed upon.

"Although eBay was in the back of our minds, we wanted
to create a better alternative," says Boyce, who is 28
years old. "We never looked at eBay so that we could
copy them. I think eBay is more about the experience
than the auctions. We've tried to develop live
interactions. More than half of our buyers get
notification with only five to ten minutes of lag
time," he says.

iOffer offers many innovative services for both buyers
and sellers. For example, sellers can open stores,
and the site has a discussion area along with "clubs"
that members can join. iOffer has a local service that
lets individuals find buyers and sellers in their
immediate area. And software tool called Mr. Grabber
takes your unsold listings from eBay or other sites
and imports them to iOffer so you can resell them.

"We can find out right away if people like or hate a
new feature. It's the instant gratification of being
able to look at a page and change it right away that
makes it all worthwhile," he says.

Of course, it takes courage to stick to change when
there are complaints. Boyce remembers what happened
in 2006 when the site's architecture was rewritten
from scratch. "Half a year later, nobody was using
it. It was hard to explain to our customer base.
They kept saying, "Why did you change that?" We'd
outgrown our old systems and had to do it," he says.

Like any online business, iOffer has faced a series
of other challenges. One is adverse selection:
buyers attracted by the free listings but whose
merchandise simply wasn't desirable. "We had one
seller who listed around 20,000 items," recalls
Boyce. "Only half had a picture. Some photos were
blurry, and some listings only had three-word
descriptions. He never sold a single item." The
problem is not only attracting sellers with good
inventory, but simply having an adequate mix of
buyers and sellers, he adds.

Boyce believes that the computer has replaced the
TV as the major form of entertainment, and the key
is embracing the whole mobile connectivity. "We see
a lot more consumers online everywhere. Most phones
have the capacity to get online and take a picture,
so we have a notification feature that lets sellers
be connected all the time," he says, adding that
the feature is still in beta testing. iOffer sends
notifications to buyers and sellers, and plans to
enable sellers to list items for sale from their
mobile phones.

And more people are connecting to iOffer. He
estimates that last year, there were two to four
thousand sellers online at any given time. In the
last month or two, seven to thirteen thousand
sellers have been waiting to accept offers.

One factor is the economy, according to Boyce.
"I don't want to call it a recession, but when the
economy is down people tend to buy more used
merchandise and to sell more of their own stuff.
They don't have extra money to make purchases,"
he says.

Boyce also finds that sellers are increasingly
disenchanted with eBay. "Sellers don't like the way
eBay treats them, and if they can find an
alternative, they will. We have the buyers.
This last week was our busiest week on record,
and I don't see it slowing down. We are seen as
Number Two in the auction space. We may be a
distant Number Two, but that's an important
place," he says.

Go to iOffer.com