Priceline is set to launch a new service that will allow
consumers to rummage through local yard sales without leaving home.
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
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
"Priceline has typically not been an advertisement model business but that
doesn't mean we will not accept advertisements on local markets," said Walker.