Perfect YardSale, which is likely to roll out in late January 2000, will not be a shipment-based service but rather a local pickup service for "quality second-hand goods" such as VCRs, exercise bicycles, treadmills, video game cartridges, television sets and binoculars. This allows the buyer to inspect the sale item in person to determine if it is "as advertised." The local service also eliminates shipping costs.
While such items are also available in the well-established auction sites run by eBay, Yahoo and Amazon.com, Priceline, based in Stamford, Conn., argues that buyers will have the upper hand in its proposed format.
Jay Walker, Priceline founder and current co-chairman, said that in the new format, there will be many more sellers than buyers, giving the buyers the ability to haggle and make offers below the asking price. Auctions typically have a set minimum price.
The service will initially roll out in a Southeastern city and expand to other cities through the year.
Priceline said it has several patent applications for its newest business process. The company also said it will form Perfect YardSale as a separate company, bringing in outside investors to fund the venture.
Perfect YardSale allows a consumer to list the item he is seeking and the price he is willing to pay. The potential buyer must submit his credit card information to show that he is a serious buyer.
If the desired item is found locally, the buyer has an opportunity to inspect it. If he buys the item, Priceline will not bill his credit card for seven days. The delayed charge is more than a perk for the buyer; it is meant as a safeguard established by Priceline to make sure the seller is not dumping a dud on unsuspecting shoppers, the company said.
"The reality is that if a problem is going to occur, it typically occurs within the first seven days," said Walker. "Since we have the credit card of the seller as well, we are able to enforce the seller taking back any defective items within seven days."
In addition to the seven-day money-back guarantee, Priceline said it will also include a 30-day limited warranty. Priceline said in some cases it would repair or replace the problem item.
Priceline plans to charge sellers a fee of about $1 to list an item on Perfect YardSale, and an additional $3 to $5 if an item is successfully sold through the service. Buyers will pay about $1 for every item they purchase.
Because the service will be locally based, there is a potential for local advertisement revenue.
"Priceline has typically not been an advertisement model business but that doesn't mean we will not accept advertisements on local markets," said Walker.