Tag Archives: Overstock.com Inc.

About 1269 days ago Data Security

For Holiday Cheer, Keep Customer Data Safe

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This is Greg Balestrieri’s first Christmas as the Candy Man and he’s doing everything he can to make it a good — and safe — one for customers of his online sweet shop, Candy.com. Balestrieri and his cousin and co-owner Joe Melville opened Candy.com in July stocked with 6,000 types of candy from 500 sweets makers. Christmas goodies include gingerbread-shaped Peeps, a two-pound mint stick, and old-fashioned ribbons and sourballs like your Grandma used to keep in the living room candy dish. To prep for Christmas, the eight-person Weymouth, Mass. company also stocked up on e-commerce security measures to keep customers safe while they shop, including the latest website encryption technology, multiple security seal programs, and payment options that don’t require customers to input a credit card number. “It’s all about conversion,” Balestrieri says. “When you have thousands of people coming to your site every day, if making one little change like putting a security logo on your checkout page makes a 1 percent difference in conversion rate a day that can make a huge impact on your bottom line over time.” Like Candy.com, small online merchants are mimicking the security practices of bigger, more well-known e-tailers to give customers a little peace of mind along with their wares this holiday season. It’s vital for small businesses to show they’ve got their customers’ best interests in mind because they don’t have the familiarity of big brand names to fall back on, says Robert Siciliano, a Boston Internet security consultant. “In this day and age, you should be screaming about how secure you are,” Siciliano says. “Consumers are overwhelmingly concerned about their personal security as it relates to fraud prevention and identity theft. If you can show them you’re a security-minded brand, they’re more likely to do business with you.” Secure holiday shopping cheer When planning their online store, one of the first things Balestrieri and Melville did was hire a website hosting company that met widely used PCI DSS standards for processing credit card payments, which include a number of mandatory security measures. To keep customers saying “Ho, ho, ho” instead of “Oh, no, oh, no,” here are other measures electronic shopkeepers should take, according to security vendors and consultants: Use EVSSL — Extended validation secure socket layer, or EVSSL, is an upgrade to the existing SSL security standard that requires certification requests to go through a more rigorous identity check and authentication process. When a website’s got EVSSL its browser’s URL address bar turns green: on the left for Firefox, on the right for Internet Explorer or green text on white background on Mac Web browsers. Since its February 2007 introduction, EVSSL has been adopted by 18,000 sites, including big names such as eBay and Overstock.com, but predominately small merchants, says Tim Callan, vice president of product marketing at VeriSign, part of the consortium that created the process. Some companies opt for EVSSL coverage throughout their entire site, while others like Candy.com use it only for the checkout process. Sign up for seal programs — Small merchants can pay security agents to vet their websites to ensure they’re operating within set security precautions and get trust marks or seals to display if they pass. Charges for such programs vary; VeriSign’s is $995 a year per server. Other programs include TRUSTe, BBB and McAfee Secure. Some also display the date and time a site went through its most recent security check up. Experts suggest merchants prominently display trust marks, especially on checkout pages or other spots where they’re asking customers to fill out forms. Offer multiple payment options — For shoppers leery of giving credit card information to an online merchant they’ve never dealt with before, offering alternatives such as PayPal or Google Checkout is another way to gain their trust. Unlike larger merchants, small businesses don’t pay PayPal a monthly fee to maintain an account so it’s helpful and cheap, says Eddie Davis, the company’s director of small and mid-sized business service. However, merchants do pay PayPal a commission of 1.9 percent to 2.9 percent on each transaction. According to Davis, PayPal’s research has shown small merchants conversion rates go up 23 percent when they offer alternative payment methods. “We bring a lot of consumers who love using PayPal and they’ll seek out sites,” he says. Another option that security experts suggest is this: if you accept credit card payments, delete card information after a transaction, thereby eliminating any risk hackers could break in and steal it. Show and tell — It’s not enough to display security program logos or trust marks on your website. You need to create a page somewhere that explains in detail what precautions you take, Siciliano says. That goes against the grain at some major online merchants, who treat their security measures as a competitive advantage. By contrast, smaller merchants who promote their security programs can use it as a way to differentiate themselves from their like-sized competitors. “Partnering with those big companies helps us get closer to that point of being trusted,” Balestrieri says. Keep customers in the loop — If the name of your online store isn’t the same as your corporate name, include both on order confirmations or credit card receipts that get e-mailed to customers — it’ll save them from refusing the charge because they don’t know where it came from. “You’re also showing them you’re conscious of their card activity, you’re concerned for the security of their card,” says Siciliano, the security consultant. Because Balistrieri’s company’s legal name is G&J Holdings LLC, both that name and Candy.com show up in the Web browser window when customers are checking out, and on receipts. E-commerce security isn’t just about keeping customers safe. Merchants have to make sure they’re not getting defrauded either. That’s why security experts suggest small businesses use intrusion protection hardware and software, monitor credit card activity levels and keep credit card blacklists. SIDEBAR: Safe Shopping Resources Resources online retailers can use to find out more about e-commerce security include: PCI Security Standards Council — The online home of the industry group that developed the PCI DSS security standard for credit card payments offers a variety of resources and information, including downloadable specifications. CA/Browser Forum — This volunteer industry consortium creates guidelines used for issuing EVSSL certifications and provides updates related to the standard. The Number One Sign of Trust on the Internet — Results of a May 2009 study from Synovate/GMI and commissioned by VeriSign about online shoppers’ security concerns.

About 1787 days ago Setting Up a Website

How to Collect Money Online

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As buyers, we are all too familiar with those little shopping cart icons on our favorite shopping sites. But, not all shopping carts are the same. It may seem that way for the person making the purchase. For the company on the other end of the transaction, the story is much different. When a customer makes a credit card purchase in a bricks and mortar store, he or she swipes their card to initiate a secure electronic transaction. This is called a point of sale system. In the online world, a payment gateway is the equivalent of that. The solutions available to facilitate those transactions range from one-click simplicity to the Byzantine. It all depends less on the payment gateway itself and more on which gatekeeper (merchant account provider) is chosen. Types of merchant account providers “For any small business starting up, the easiest way to go is PayPal. They’ve been around a long time and most likely your customers already have a PayPal account, which is a huge advantage.” says Michael Miller, author of Choosing an Online Payment Service: Google Checkout vs. PayPal (Pearson Education, 2007). Turn key solutions like PayPal or Google Checkout may seem like the obvious choice for the new online seller. But there’s another alternative: dealing directly with a credit card processor. Most credit card processing companies typically offer bundled in services like back end integration with your website and the shopping cart navigation. However, the costs charged back to the merchant can vary wildly; sometimes cheaper than the turn key providers, sometimes much more. Brenda Mize, owner of Beacon’s Glow, an online collectibles store and her newer ecommerce venture, The Toy Bench, skipped right over turn key merchant account services like PayPal and Google Checkout and started out with a credit card processor. In the five years that she’s been in business, she’s never looked back. “We’ve never had one bad transaction. Our Web designer picked out the credit card processor, who waived all the up front fees. Customer service has been great. We’ve even been able to negotiate lower percentage rates. We never even considered PayPal. Their fees were astronomical when we started,” says Mize. Miller would consider Mize an exception to the rule who cautions smaller businesses, especially those just starting out, to avoid credit card processors. “It’s very complex. With a credit card processor, fees can vary. Make sure you shop around,” says Miller. Clearly opinions are divided when it comes to weighing all options. Here’s a look at some of the more popular solutions and the advantages and disadvantages therein. Turn key merchant account providers PayPal charges 2.9 percent of the sale price, plus 30 cents per transaction. It used to be much higher in their earlier days. PayPal has more than 60 million customers worldwide, operating in 190 countries. A major part of its customer base comes from its parent company, eBay. However, it’s not just the merchant account provider of choice for small businesses. Delta Airlines, CompUSA, and Overstock.com are just some of the large companies that use PayPal. “Five years ago, there was a stigma that PayPal didn’t look professional. Now it’s so popular, it’s ubiquitous,” says Miller. Advantages: PayPal can be as simple as embedding one click from your site to theirs to complete the sale. However, it’s scaleable too. Merchants can integrate the entire shopping cart process within their own site. It only takes about a week to set up an account and get it up and running. Disadvantages: Although distribution of funds back to the merchant is immediate, it is also manual. Meaning, it doesn’t happen until the merchant clears his account. PayPal then takes its cut and transfers the rest to the merchant. Miller cautions businesses to clear their accounts on a daily basis. “PayPal, especially, is very consumer friendly. So, if there’s a dispute, they tend to take the customer’s side. It doesn’t happen often, but PayPal has been known to freeze accounts until a dispute is resolved and that means everything in the account. You don’t want to risk money from other sales getting tied up in the event of a customer dispute,” warns Miller. Google Checkout charges 2 percent of the sale, plus 20 cents per transaction. It’s a much younger service than PayPal, less than two years old and only been operating abroad for about a year. Because it’s Google, one can expect its growth to make quick gains on Pay Pal’s market share. Advantages: “Google Checkout is pretty much the same system as PayPal,” says Miller. However, its percentages and fees are slightly lower. Additionally if a business is already using Google Adwords, those fees are reduced, if not waived altogether. “They’re clearly using Google Checkout to drive business to Adwords,” says Miller. Disadvantages:  Fewer people are using it than PayPal, so there’s the risk of more lost sales from first time buyers who don’t want to bother opening a new account. Though not measurable, there is also plenty of anecdotal information from former merchant account holders online complaining of technical glitches ranging from incomplete sales, funds collected by Google and then not distributed back to the merchant, poor communication notifying merchants of a sale, etc. Whether the complaints are valid or significant, perception is reality and a dicey reputation online is reason enough for merchants to think twice before they bite on that lower rate. Volusion is a much smaller (and newer) player in this market, with only 10,000 accounts to date. Percentage rates per transaction start at 2.17 percent of the sale   with no additional  transaction fees. This is a company to watch. Here’s why: Advantages:  It’s the only ecommerce solution that integrates with MySpace and Facebook, to date. Instead of that 20 to 30 cent transaction fee per sale, Volusion offers a flat monthly fee based on the number of products for sale on your site, ranging from $20 to $100 a month. Disadvantages: No one’s heard of it. That 2.17 percent taken out for the credit card companies is a teaser rate. No word on how high that rate can go. Credit card processors There are too many companies out there to mention. However merchants basically have two ways to go: dealing with the financial institutions itself or hiring a company to do it for them negotiating the best rates and using its own economy of scale to do so. “Your bank is probably the worst place to go. You will always get the worst rate there,” says Miller. Miller, whose wife works for a credit card processor (in the spirit of full disclosure), offers the following advantages and disadvantages to going this route: Advantages: There’s the potential of negotiating a lower rate, especially as the business grows selling in higher volume. Many sellers, like Mize, simply feel it looks more professional to have a customized cart than a PayPal or Google Checkout button on a site. “We also have a SSL certificate button on our site. I think it helps give our customers peace of mind,” says Mize. Disadvantages: Rates vary and can go up without warning, depending on the contract. There are often up front costs and monthly fees. No two merchant account providers are alike. Business owners really have to shop around for the best deal. “It’s very complex,” says Miller. One last piece of advice for online merchants shopping around for a credit card processor, some of the likely places to get the best deals include: trade organizations, co-ops, buying groups, even Costco or Sam’s Warehouse.

About 1787 days ago E-Commerce

How to Collect Money Online

our beautiful site

As buyers, we are all too familiar with those little shopping cart icons on our favorite shopping sites. But, not all shopping carts are the same. It may seem that way for the person making the purchase. For the company on the other end of the transaction, the story is much different. When a customer makes a credit card purchase in a bricks and mortar store, he or she swipes their card to initiate a secure electronic transaction. This is called a point of sale system. In the online world, a payment gateway is the equivalent of that. The solutions available to facilitate those transactions range from one-click simplicity to the Byzantine. It all depends less on the payment gateway itself and more on which gatekeeper (merchant account provider) is chosen. Types of merchant account providers “For any small business starting up, the easiest way to go is PayPal. They’ve been around a long time and most likely your customers already have a PayPal account, which is a huge advantage.” says Michael Miller, author of Choosing an Online Payment Service: Google Checkout vs. PayPal (Pearson Education, 2007). Turn key solutions like PayPal or Google Checkout may seem like the obvious choice for the new online seller. But there’s another alternative: dealing directly with a credit card processor. Most credit card processing companies typically offer bundled in services like back end integration with your website and the shopping cart navigation. However, the costs charged back to the merchant can vary wildly; sometimes cheaper than the turn key providers, sometimes much more. Brenda Mize, owner of Beacon’s Glow, an online collectibles store and her newer ecommerce venture, The Toy Bench, skipped right over turn key merchant account services like PayPal and Google Checkout and started out with a credit card processor. In the five years that she’s been in business, she’s never looked back. “We’ve never had one bad transaction. Our Web designer picked out the credit card processor, who waived all the up front fees. Customer service has been great. We’ve even been able to negotiate lower percentage rates. We never even considered PayPal. Their fees were astronomical when we started,” says Mize. Miller would consider Mize an exception to the rule who cautions smaller businesses, especially those just starting out, to avoid credit card processors. “It’s very complex. With a credit card processor, fees can vary. Make sure you shop around,” says Miller. Clearly opinions are divided when it comes to weighing all options. Here’s a look at some of the more popular solutions and the advantages and disadvantages therein. Turn key merchant account providers PayPal charges 2.9 percent of the sale price, plus 30 cents per transaction. It used to be much higher in their earlier days. PayPal has more than 60 million customers worldwide, operating in 190 countries. A major part of its customer base comes from its parent company, eBay. However, it’s not just the merchant account provider of choice for small businesses. Delta Airlines, CompUSA, and Overstock.com are just some of the large companies that use PayPal. “Five years ago, there was a stigma that PayPal didn’t look professional. Now it’s so popular, it’s ubiquitous,” says Miller. Advantages: PayPal can be as simple as embedding one click from your site to theirs to complete the sale. However, it’s scaleable too. Merchants can integrate the entire shopping cart process within their own site. It only takes about a week to set up an account and get it up and running. Disadvantages: Although distribution of funds back to the merchant is immediate, it is also manual. Meaning, it doesn’t happen until the merchant clears his account. PayPal then takes its cut and transfers the rest to the merchant. Miller cautions businesses to clear their accounts on a daily basis. “PayPal, especially, is very consumer friendly. So, if there’s a dispute, they tend to take the customer’s side. It doesn’t happen often, but PayPal has been known to freeze accounts until a dispute is resolved and that means everything in the account. You don’t want to risk money from other sales getting tied up in the event of a customer dispute,” warns Miller. Google Checkout charges 2 percent of the sale, plus 20 cents per transaction. It’s a much younger service than PayPal, less than two years old and only been operating abroad for about a year. Because it’s Google, one can expect its growth to make quick gains on Pay Pal’s market share. Advantages: “Google Checkout is pretty much the same system as PayPal,” says Miller. However, its percentages and fees are slightly lower. Additionally if a business is already using Google Adwords, those fees are reduced, if not waived altogether. “They’re clearly using Google Checkout to drive business to Adwords,” says Miller. Disadvantages:  Fewer people are using it than PayPal, so there’s the risk of more lost sales from first time buyers who don’t want to bother opening a new account. Though not measurable, there is also plenty of anecdotal information from former merchant account holders online complaining of technical glitches ranging from incomplete sales, funds collected by Google and then not distributed back to the merchant, poor communication notifying merchants of a sale, etc. Whether the complaints are valid or significant, perception is reality and a dicey reputation online is reason enough for merchants to think twice before they bite on that lower rate. Volusion is a much smaller (and newer) player in this market, with only 10,000 accounts to date. Percentage rates per transaction start at 2.17 percent of the sale   with no additional  transaction fees. This is a company to watch. Here’s why: Advantages:  It’s the only ecommerce solution that integrates with MySpace and Facebook, to date. Instead of that 20 to 30 cent transaction fee per sale, Volusion offers a flat monthly fee based on the number of products for sale on your site, ranging from $20 to $100 a month. Disadvantages: No one’s heard of it. That 2.17 percent taken out for the credit card companies is a teaser rate. No word on how high that rate can go. Credit card processors There are too many companies out there to mention. However merchants basically have two ways to go: dealing with the financial institutions itself or hiring a company to do it for them negotiating the best rates and using its own economy of scale to do so. “Your bank is probably the worst place to go. You will always get the worst rate there,” says Miller. Miller, whose wife works for a credit card processor (in the spirit of full disclosure), offers the following advantages and disadvantages to going this route: Advantages: There’s the potential of negotiating a lower rate, especially as the business grows selling in higher volume. Many sellers, like Mize, simply feel it looks more professional to have a customized cart than a PayPal or Google Checkout button on a site. “We also have a SSL certificate button on our site. I think it helps give our customers peace of mind,” says Mize. Disadvantages: Rates vary and can go up without warning, depending on the contract. There are often up front costs and monthly fees. No two merchant account providers are alike. Business owners really have to shop around for the best deal. “It’s very complex,” says Miller. One last piece of advice for online merchants shopping around for a credit card processor, some of the likely places to get the best deals include: trade organizations, co-ops, buying groups, even Costco or Sam’s Warehouse.

About 2303 days ago PCs, Laptops, and Notebooks

Where to Buy Computers

Is 2007 the year your business will buy new hardware? Despite this year’s twin Microsoft releases of Office 2007 software and the Vista operating system, there’s no evidence that 2007 will be a banner year for small and mid-size businesses in terms of hardware purchases, says Michael Speyer, senior analyst with Forrester Research, of Cambridge, Mass.  “It depends very much on where companies are in their hardware cycle,” he says.  “In certain areas, we might see an uptick over last year, like in purchases of storage and PCs,” or laptops, which continue to grow in popularity.  But for many companies, he points out, upgrading to Vista won’t require new hardware. Moreover, small and mid-size businesses often take a wait-and-see approach to new technology purchases. But if 2007 is your company’s year to buy, where should you look? Shop Around Online and Offline The number of options for buying hardware for business use is overwhelming. In addition to traditional brick-and-mortar electronics stores, Web-based shopping venues hawking computer equipment have mushroomed. Meanwhile, small businesses continue to show a strong preference for buying direct from manufacturers like Dell. Value-added resellers (VARs) are an  alternative for those who seek customized hardware. But prepare to pay more for this option. You’d better shop around, as the old song goes, and preferably online first, to get the best price and selection. In fact, some hardware items may be hard to find anywhere but in cyberspace. While the venues for buying hardware seem nearly endless, here are some to consider: Online Comparison Shopping Try sites such as Yahoo Shopping, Amazon, CNET Shopper, or Pricegrabber to sniff out the bargains. Relatively easy to use, these sites allow for easy price comparisons of like products from literally hundreds of vendors, and include vendor reviews, which may or may not prove reliable. Online Computer Stores Newegg, a computer geek’s paradise, has won a slew of awards for its prices and selection, including Forbes’ Best of the Web 2004 and Computer Shopper Shopper’s Choice awards in both 2004 and 2005. Other popular e-tailers include TigerDirect and CDW. Electronic Megaretailers Circuit City, Best Buy or CompUSA. All three have locations nationwide, the option of eyeballing the merchandise before buying, and in-store warranties for those who desire them. Moreover, it’s often easier to return items or seek repairs through a traditional store. Computer Shopper readers rated Best Buy their favorite brick-and-mortar electronics store; many of its locations now feature Geek Squad 24/7 on-site troubleshooting services. CompUSA offers TechPro on-site service. Deep Discounters If bargain-basement prices are a top priority, don’t rule out sites like Overstock.com or Buy.com. Because they are often reselling overstocked items or cancelled shipments from other retailers, they can offer real bargains, especially to those who already know what they want. Direct Buys Going straight to the source remains a very popular option: according to a February 2006 survey by Forrester Research, Dell was named as the most popular computer and equipment vendor by the 700-plus small and mid-size businesses surveyed. Value-Added Resellers. VARs are companies that take computer components and build unique, customized units for their clients. Often, they link hardware and software from different vendors to do this. Since VARs specialize in custom design, they can also design training programs, database development, and consulting and research services. In fact, the line between services offered by VARs and big-name consulting firms, such as Accenture, is quickly blurring. However, VARs are more likely than consultants to work for smaller businesses. And, according to a June 2006 Forrester Research report, small and mid-size businesses are increasingly seeking out VARs instead of consultants to meet their needs.

About 4466 days ago E-Commerce

Upstarts: Internet Salvage

Cleaning Up from the Dot-Com Mess Online companies are falling left and right. But for some start-ups that spells opportunity It’s been almost a year since the Nasdaq crashed last April, and the results haven’t been pretty. Anyone who has invested in Internet companies, worked for one, or simply enjoyed shopping online has probably had a disappointment or two. Some 210 dot-coms closed up shop during the year 2000, according to a report by Webmergers.com. That desperate gasp you hear emanating from places like the San Francisco Bay area and New York’s Silicon Alley is the sound of Internet hopefuls running out of money. Of course, not everyone is suffering. In fact, the spate of deaths in the Internet world is fertilizing a new crop of start-ups. Look at it this way: when an epidemic hits, you need doctors to tend to the sick and undertakers to bury the dead. New companies like NetCatalyst are aiming for the Internet first-aid niche, while others like Bid4Assets.com are standing by to take care of the dot-coms that won’t make it to the hospital. Life support Long before last April, Ronald Posner knew that a dot-com shakeout was coming. Too many start-ups were getting funding too quickly, without enough due diligence. That’s what prodded Posner and cofounder Chris Karkenny to start NetCatalyst in August 1999. Posner, then 56, was a venture capitalist and former CEO of five software companies. Karkenny, 32, was running an Internet incubator. They believed, Posner says, that “when the downturn did come, there would be a lot of good companies looking for partners” — that is, hoping to be acquired by a stronger company. Billing itself as a “liquidity engineer,” NetCatalyst is not a plumber but an investment bank, with some management consulting thrown in. Its target customer is a high-tech company whose venture capitalists have turned off the spigot or a business that has realized that attaining the nirvana of a public offering is no longer a possibility. (“Internet companies that have hit a road bump,” as NetCatalyst’s Web site delicately puts it.) NetCatalyst’s aim is to help such companies get back on the road by finding an acquirer, a merger partner, or a new investor. When necessary, though, NetCatalyst will also supply some management advice to get an ailing company into better shape before shopping it around. If NetCatalyst manages to match a company with a new partner, its fee is usually 3% to 10% of the acquisition or investment amount. The company also charges time-based fees for its management-consulting services, which generally total less than $100,000. What companies like NetCatalyst can provide is “a fresh set of eyes” to find efficiencies and help a dot-com reposition itself in the market, says Emily Meehan, senior analyst at the Yankee Group. Many Internet companies have relied on incubators and venture-capital firms for capital and guidance. Now, says Meehan, “that help is totally drying up.” It’s hard to put a number on the potential market for NetCatalyst’s services, given that the number of failing dot-coms is still unknown. But researchers at Gartner Group estimate that as many as 60% of business-to-consumer Internet start-ups founded in the past three years will be gone by 2005. And even if the dot-com epidemic abates, says Karkenny, Internet mergers and acquisitions will undoubtedly continue. One early NetCatalyst client was Alert-IPO.com, an Internet business that tracks initial public offerings. The company hired NetCatalyst early last year while debating whether to seek a large round of venture capital, says Karkenny. NetCatalyst’s recommendation: bring in more experienced management and look for a strategic partner instead of VC money. Within 90 days, NetCatalyst engineered Alert-IPO’s acquisition by Internet.com, a portal consolidator that has rolled up more than 67 Web sites since 1995. In a year and a half of operations, NetCatalyst, which is based in Santa Monica, Calif., has worked with approximately 30 companies as an acquisition or investment intermediary. Its revenues for 2000 totaled some $2 million in cash, which doesn’t include the more than $10 million in equity that the company has garnered from some of its deals. Increasingly, says Posner, NetCatalyst finds itself being retained by venture-capital firms whose Internet portfolio companies need attention — fast. “They may have investments in 30 to 40 companies and don’t have the resources internally to deal with more than 4 or 5,” says Posner. “They’re turning to people like us.” NetCatalyst is picky about choosing which dot-coms to take on, though. Posner says he looks for companies that are fundamentally healthy, despite cash-flow problems, with a technical advantage or a business model that differentiates them from the rest of the marketplace. And if the company is down to its last nickel, forget it. “We don’t do dot-bombs,” says Karkenny. “If they have less than three months’ worth of cash, we don’t get involved at all.” Last rites Those unlucky Internet companies that fail to make NetCatalyst’s cut might consider the services of Bid4Assets.com. Launched in November 1999 as a site aimed at unloading goods ranging from bad loans to items seized in bankruptcy, Bid4Assets has found a serendipitously lucrative niche in selling the assets of defunct dot-coms. “This wasn’t in our business plan,” admits vice-president of strategic development David Marchick. “We didn’t really see it coming until about September.” But now as much as 20% of the business’s revenues come from liquidating Internet companies, and interest in Bid4Assets’ services is growing, says Marchick. “We have conversations with between 10 and 20 Internet companies per week,” he says. Based in Silver Spring, Md., Bid4Assets auctions items both online and off. Bidders for the assets of the recently deceased Value America, based in Charlottesville, Va., came from 16 states, says Marchick. “That would never have happened with a live auction,” he adds. Unlike Overstock.com, its best-known competitor in the dot-com scavenger business, Bid4Assets tends to sell to businesses rather than to consumers. About 40% of the time, Bid4Assets buys assets directly from failing Internet companies and resells them. In other cases it acts as a broker, usually collecting 10% of sales, plus a premium. Liquidating dot-coms brings some special challenges. A brick-and-mortar business usually has buildings, equipment, inventory, or other tangible property that can be sold off. Internet companies, which tend to be more virtual, often have a different range of assets. As of mid-December, Bid4Assets was offering intellectual-property rights from the now defunct Zodo.com, an entertainment-content site, including the company’s trademark application, its business plan, and its prototype site. (At press time, one bidder had offered $1,000.) Another recent auction involved computer equipment, office equipment, and furniture from the failed Value America, all of which sold for about $300,000. Other typical dot-com assets might include domain names, software, and licenses. Bid4Assets sells retail inventory only occasionally. “Assets from Internet companies are perishable,” says Marchick. “They’re like fruit.” So Bid4Assets tries to act fast, auctioning items within a week or two. “If you hold on to a server for six months, its value drops exponentially,” he explains. Intangible assets like domain names are short-lived, too. Even if a site has tons of traffic, once it shuts down, “within two months no one goes there,” Marchick says. There’s likely to be no shortage of troubled dot-coms in the near future. But what happens when the shakeout is over? Marchick says that he isn’t worried. By then another industry will be in a downturn, with Bid4Assets ready to scoop up the remains. “That’s kind of how it works in bankruptcy,” he says. Emily Barker is a senior staff writer at Inc. Cyber-kvetching The downturn among online companies has launched a slew of Web sites for the downsized and the people who love them to complain or commiserate or both. And — surprise! — some of those sites are even making money. Here are some of the loudest voices. FuckedCompany.com, in New York City, publishes a list of troubled Internet companies, based on reports that founder Philip Kaplan collects from disgruntled dot-commers. What spawned it: Last June, Kaplan, the founder and CEO of a small Web-design company, put up the site as a joke for his friends. He got back from vacation a week later to find his answering machine full of calls from reporters. Tone: Gleeful schadenfreude. Kaplan even runs a pool that lets users bet on which Internet company will be the next to fail. Revenue sources: Advertising; job listings; merchandise, including T-shirts and coffee mugs. NetSlaves.com, in Yonkers, N.Y., posts essays, rants, and other contributions from tech workers. The offerings provide a virtual underground guide to the Internet workplace. What spawned it: Founders Bill Lessard and Steve Baldwin started the site in 1998 to relieve their burnout after a series of frustrating Internet jobs. Tone: Grassroots subversion with a high-tech twist. Stories on sweatshop recruiters, articles on drug use in dot-coms, and gift suggestions for the special geek on your list. Revenue sources: Advertising, plus sales from Lessard and Baldwin’s 1999 book, NetSlaves: True Tales of Working the Web, which was launched on the site and has sold 50,000 copies so far. Another book is in the works. Startupfailures.com, in Castro Valley, Calif., offers advice and a community that help entrepreneurs bounce back after their companies have failed. What spawned it: Last February, after his third start-up in a row tanked, founder Nicholas Hall came up with the idea of starting a Web site for guys like him. Tone: Helpful encouragement of the “You get right back in there and keep trying” variety. Hall refers whiners to FuckedCompany.com. “I didn’t want to have that karma,” he says. Revenue sources: Sponsorships, plus off-line business coaching, speaking engagements, and workshops. Q&A Opportunities Abound Seth Freeman, managing director of EM Capital/EM Management Inc., a San Francisco consulting firm that specializes in turnarounds, talks about some of the opportunities that he sees in the Internet shakeout. Inc.: What can turnaround experts do for distressed dot-coms? Freeman: Venture capitalists, private-equity funds, and banks are beginning to use turnaround managers to evaluate their portfolio companies. And that leads to another opportunity for turnaround people: performing a planned wind down or asset sale that delivers as much value as possible. Inc.: What are the challenges of working with Internet companies? Freeman: There’s a perception among turnaround specialists that with dot-coms leverageable assets don’t exist. There hasn’t been much understanding of how to value and use intellectual property as collateral. Also, the ability to appraise the value of a dot-com brand name is still developing. Inc.: What are the opportunities for new turnaround companies? Freeman: You’re going to see firms set up to work as advisers to Internet “vulture” funds. Those are run by people who would like to buy either the assets or the ongoing companies at a discount. For that, they’ll require new-economy-savvy consultants. Inc.: How long will such an opportunity last? Freeman: I think it’s permanent. We’re going to continue to see new Internet start-ups. And many of those will fail. Q&A So What’s to Sell? How is liquidating an Internet company different from dissolving any other type of company? Jeffrey Wolf, a bankruptcy specialist at the law firm of Greenberg Traurig, in Boston, who represents Bid4Assets.com and other more traditional liquidation companies in many of their transactions, explains. Inc.: What are the opportunities for liquidators in the dot-com downturn? Wolf: Clearly, there will be a lot of failed dot-coms. The real question is, What is there to liquidate? Many dot-coms have no inventory. Obviously, there are the minimal physical assets, like office equipment, used computers, and the like. Then there are the intangible assets: the technology, the licenses, the customer lists, the domain names, and any intellectual property. And each one of those unfortunately comes with its own liquidation difficulties. For instance, customer lists, which everyone at one time supposed would be a very valuable asset, have become difficult to liquidate because of privacy concerns. Inc.: Sounds as if the opportunities for liquidators could be pretty small, then. Wolf: Yes and no. If liquidators can find efficient, cost-effective ways to dispose of companies’ assets, there could be a lot of opportunity, especially for online liquidations. Since the cost structure of an Internet-based auction is theoretically very low, the net results will be higher. Inc.: What’s the competition like? Wolf: Some companies have tried to liquidate themselves over eBay and other online auction sites. And some of the traditional liquidators are experimenting with dot-com liquidations. I don’t know how successful they’ll be without partnering with an experienced online player. The investment criteria of a traditional liquidator may not justify spending a lot of time or expense in that area. I think the traditional liquidators will have plenty of brick-and-mortar retailers to work with very shortly and will not necessarily be focusing on the dot-com sector. Please e-mail your comments to editors@inc.com.