The idea was simple: Build a large catalog of consumer items and make it accessible in a structured format, unlike what already exists in wide-open search engines like Google. Give users tools similar to what they get on financial Web sites. Give a unique online business experience to both the buyers of the goods and the sellers.
The result is an innovative online marketplace: Wigix. It’s designed to help people on both sides of the buy/sell deal find the right price.
Wigix operates somewhat like a stock market, which is no surprise since CEO James Chong and CTO Bob Lee were heavily involved in architecting the online trading platform at investment firm Charles Schwab.
“We thought that financial model approach was a good platform for consumers. The existing auction model also has consumer concern issues, so we relied on the Nasdaq trading model,” Lee told the E-Commerce Times.
The vision Chong and Lee shared was to create an online community where both buyers and sellers are empowered with the market knowledge and product knowledge they need to get the right price. The founders wanted to forgo the restrictions that online auction users face with fees, time lines and regulations.
“We wanted to apply a different model to the business-to-business or customer-to-customer experience. The auction model like eBay doesn’t work for commoditized items like electronics,” Lee explained.
The two innovators formulated the idea in early 2006 and held a limited launch with a few hundred users in the spring of 2007. From that point, the two worked to slowly expand their user base of buyers and sellers.
Since the launch, many of the behind-the-scenes activities at Wigix have focused on preparing for that public beta launch.
The hurdles that the startup has seen so far involve what Lee described as chicken-and-egg problems. For instance, they needed people to contribute items and time to set up product categories and catalog them based on what users contributed. They also needed items in the catalogs to draw new users.
“We had to self-seed the catalogs to get started. Then we had to build out the site enough,” Lee said.
The founders were pleasantly surprised to find a quick acceptance. People joined to contribute items, and others signed on as category experts to keep the Web site organized. While not salaried positions, category experts receive financial incentives, such as sharing in the sales revenue of items in their category.
The next step for Wigix is the official general availability launch. The founders are readying their startup operation to that goal.
“We are involved in building up the catalogs. This is paramount. We are making very good progress,” Chong told the E-Commerce Times. “As we move to the GA (general availability), we will focus more on catalog building. We are near critical mass now.”
One of the most essential accomplishments to meet the GA launch is building up the professional seller portal, he noted. Another key feature being developed is the Exchange Dealers portal. This will offer comprehensive selling solutions for small- and medium-sized businesses.
“Most solutions don’t have more than a swap-meet approach. This Exchange Dealers portal will give SMBs a storefront,” Chong explained, noting that he expects the general availability launch to occur by the fourth quarter this year.
The ultimate goal for Wigix is to operate globally. To that end, Chong plans to launch a China Wigix site in the fourth quarter this year along with the GA launch.
“One big mistake American firms make when going to the China market is thinking they can work with the same U.S. concept. We will have a Chinese version for a localized Web site,” explained Chong.
One standout feature one might notice while navigating around Wigix is its highly structured design. Searching for a product produces a list of all products meeting the description, regardless of where the item is anchored in the catalogs.
Each product page is a permanent URL (uniform resource locater) that never goes away. This lets users bookmark the page and return to it without ever having to search again for that item, Lee explained.
Its similarity to a financial Web site is readily obvious. The product displays show ownership details and compares the item to related products sold by other owners. Also, potential purchasers can place open buy orders and see all buy and sell orders.
Much like a stock portfolio, users can keep a record of their transactions and available items for future resells. Charting and graphing statistics are also available.
“We view Wigix as a place for product research as well. People can post and read reviews of items. Potential buyers can ask the owner questions about his product. The community experience is integrated throughout the site,” said Lee.
For example, anyone can contribute comments and help. Wigix users can look at metadata on all products and transactions they make.
Another unique offering is the ability to track the value of a member’s cataloged items over time.
Chong and Lee designed a fee structure they hope will attract a strong following. Unlike eBay, users can list items without paying an insertion fee.
“We don’t have listing fees. They are too confusing for customers,” Chong said. “But we do have transaction fees.”
Sellers do not owe anything to Wigix if the item sells for under US$25. Sales from $25 to $100 pay $1.50. For sales from $100 to $999, sellers pay Wigix a 2 percent share. For items that sell over $1,000 the seller owes one percent of the selling price.
Wigix does not deal in preferential treatment fees.
Despite the innovative attractions Wigix offers, only time will tell if consumers buy into the financial trading site approach. It could be difficult to wean hardcore users from traditional auction sites.
“People are creatures of habit, and it is often hard, once they get used to a tool like eBay, to get them to move. But if they are upset with the tool or the company, they may be enticed to make a change,” Rob Enderle, president and principal analyst for the Enderle Group, told the E-Commerce Times.
User dissatisfaction elsewhere could work to Wigix’s advantage. Lots of users are upset with eBay, noted Enderle, and this could give Wigix an opportunity to establish itself if it is marketed properly. That marketing, however, has not yet started.
Wigix could find success in using a model similar to that of a stock exchange, according to Enderle.
“If enough people use the tool, they may be less intimidated by the process, and some of the games that folks object to in auctions don’t seem to work at an exchange,” Enderle concluded.
"For sales from $100 to $999, sellers pay Wigix a 2 percent share. For items that sell over $1,000 the seller owes one percent of the selling price.
That means that the fee on a $999 item would be $19.98, but the fee on either a $500 or a $1000 item would be $10.00. This barely makes sense.