Tuesday, May 15, 2012

Nebids Interview with Larry NeJame

This is my nebids interview with the co-founder Larry. nebids is a promising new penny auction which aims to bring a complete marketplace to the penny auction industry - you can both buy and sell items based on the penny auction model. If implemented well, I think the idea has great potential for bidders. The site is yet to go into beta but the founders are excited and you can sign up now for bonus giveaways. Here is the interview:


Sid: nebids is centered around a penny auction marketplace. Tell us a little about how nebids is supposed to work.
Larry: The simple of it is nebids will provide a platform for anyone to buy and sell using the penny auction format; just as eBay allows people to buy and sell using a traditional online auction format. Virtually anyone will be able to shop and sell through nebids and they will be able to sell pretty much anything they want.

Sid: When is nebids going to be live?
Larry: We plan on going live with our Beta Launch around mid to late June. This is barring any unforeseen road blocks. The first version of the site will be launching very shortly after the Beta Launch.

Sid: Why do you think bidders will be attracted to nebids as compared to say bidding on Quibids?
Larry: One of the key things we are offering bidders is lower bid prices. Bid prices will be set at $.50 per bid which is the lowest we’ve ever seen. We also allow bidders to purchase any number of bids they want; we are doing away with bid packs. So if someone wants to buy 83 bids, they can. One last thing that we are going to try to bring to the table is a larger variety of items that shoppers can buy. We hope to provide as many different shopping categories as an eBay or Amazon.

Sid: Do you think you can get enough sellers especially in the initial stages, considering it would be risky for them?
Larry: That of course is one of the major challenges to the launch. We have been working tirelessly to get the word out there about nebids as best we can to create as much buzz as we can about the site. In the past few weeks we have been taking signups and getting feedback through our Facebook page and we have been getting a ton of positive responses and participation so far, so we think there is going to be no shortage of bidder/shopper participation.
It’s our goal to make sure everyone has a pleasant experience on nebids either shopping or selling. So especially in the early stages we are going to try to work very closely with the sellers and give them as many guarantees as possible, to make sure they are making money on their auctions.

Sid: How do you plan to prevent problems with sellers like not shipping items?
Larry: We will have a built in system that requires the sellers to fulfill an auction order once the auction is completed. If they seller does not fulfill the auction order they will be heavily penalized, either by being banned from the site or incurring negative feedback on their account, which will hinder them from selling effectively.
The system will also require the buyer to finalize the auction by paying the ending auction price and shipping. At that point the seller will be responsible for shipping the item/fulfilling the order. Nebids will be the facilitator for this transaction, similar to how Amazon works; it will not be a transaction directly between the buyer and seller. This will ensure that both parties are protected.
If a seller does not ship the item the money paid by the winning bidder will be refunded. Also all bids placed on the auction will be refunded to all participants in that auction.  The seller will of course not receive any distribution of money from that sale.

Sid: Will there be any restrictions on what items can be put up for auction?
Larry: For the most part anyone can sell anything. However there are some standard restrictions, such as, no pornographic material or paraphernalia, also things that you might not have the rights to sell.

Sid: Tell us a little about the people behind nebids
Larry: Nebids has 3 founders: Larry, Marcus and Scott. All three of us grew up in Florida and we have worked with each other for a number of years. Larry handles most of business operations of the company and Scott and Marcus handle the technology and development aspects of the company.  Each of us have extensive experience with other business ventures in different fields such as, telecommunications, ecommerce websites and software.

Sid: Do you think other penny auctions will copy this model? Are you aware of any other live penny auctions who have implemented such a marketplace?
Larry: It’s certainly possible for other penny auctions to copy this model. Our hope is that people looking to get into the penny auction business choose to sell through nebids as opposed to starting up a website themselves. We think it is a beneficial scenario all around, sellers will not have to worry about the overhead of starting a website and marketing it, they can simply list items and market to nebids built in customer base.
To our understanding there have been some attempts at an eBay –like penny auction before, however they seemed to charge outrageous commissions on the auctions making it virtually impossible for sellers to generate a profit. There are other marketplaces out there, however they do not use a standard penny auction format.

Sid: Is nebids open to international bidders or just US residents?
Larry: To start nebids will only be open to US residents only. The goal is to expand to other regions at a later date, if possible.

Sid: Do you think the penny auction industry in general should be regulated more closely?
Larry: That’s an interesting question. With some of the practices utilized by some penny auction sites that we’ve seen, like shill bidding and not shipping products, the quick reaction to that question is “YES”. However one of the primary goals with the nebids marketplace penny auction format is to eliminate those bad practices that are being demonstrated today, which the marketplace format inherently eliminates or at the very least dramatically reduces. We really think this format is going to be a game changer.

Sid: What kind of auction models do you plan to implement? Just the traditional timer auctions or something more?
Larry: The initial plan is to offer a traditional timer penny auction where a bid increases the auction price by $.01. We feel like this is the simplest and easiest to understand model for both shoppers and sellers. We will constantly be updating the site with new features and options, such as, a buy it now option. However the core model will be a traditional timer based penny auction.

Sid: What do you think is the main reason behind so many seemingly successful penny auctions closing down, like Swoopoo, BidRivals, etc.
Larry: Sometimes companies simply overextend themselves, which is a common reason why established companies go under. From what we’ve seen over the last couple of years there have been a lot of small penny auction startups that have come and gone in almost the blink of an eye. It seems most new penny auction site owners do not realize what it takes to get a successful website off the ground, let alone a penny auction. It requires a lot of work and a lot of capital and resources at the beginning to be successful, which is something most people do not account for.

Check out nebids today.

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