Confused about whether BuyBot is right for you, or what it does? We interviewed Jason Douglas, the person behind the design and programming of BuyBot about several issues related to eBay, on-line auction websites, and his software.

 

There's already tons of eBay software out there on the market. Why create another?

It's true, there is a lot of eBay software (and websites providing paid services). However, most of it is for large-volume sellers. The idea behind most of these programs is that you have a large inventory of items to sell, and you need a way to categorize and automate the sale of those items.

But the reason I created BuyBot had nothing to do with that: it was created because there simply wasn't anything else available like it. At the time, I was doing a lot of my research in investment banking. Nowadays though, its not really a great time for the stock market... a lot of investors are having a hard time just to post a positive return each year. I was thinking at the time that if there was a market I could invest into, which could literally double or triple my money in less than a year, it would be a huge breakthrough. Of course, that defines the whole life of an investor, and there was no way I was going to beat the big players at their own game, so I turned to the most unlikely place for an investor: eBay.

You've heard of eBay PowerSellers, I'm sure, but BuyBot is a program for what I call PowerBuyers. eBay doesn't recognize us, probably because we don't contribute to their bottom-line profits. But there are probably far more of us than PowerSellers. We may not have a garage full of inventory that we need to list and ship, but we have equally big problems. Some of us might get up 5AM every morning, and start running saved searches, scanning the pages of listings for something new and interesting. We check up on items we're thinking of buying, setting up snipes, deciding how much to bid up to, and all kinds of things. Sure, eBay's website and the "My eBay" page is nice... but let's admit, it definitely has its limitations. Maybe I need to save hundreds of searches, organize stuff in folders, get a quick glance at new listings, receive e-mail alerts when my favorite item is available at a low enough price, see what people are bidding the most on... I could go on and on. BuyBot was designed to carry out thousands of different possible tasks that PowerBuyers need an automated way of doing.

What about for the average non-PowerBuyer user? Or even PowerSellers? Is the program equally useful for them?

I don't necessarily think one has to be a power user to benefit from the program. I really think the program has a lot of features to recommend it to the average eBay user. If nothing else, it's a far better alternative to using eBay's search. BuyBot lets you save searches easily, sort by any column, and quickly see new items that haven't been viewed yet. I think all of these features could be picked up quickly by a user, without having ever read the manual. Those benefits alone could pay for the cost of the program.

My dad's an avid user of the program as well, and he's by no means a computer expert. (Although the jury is still out I think on whether or not he's a PowerBuyer!) But what's important is he can use it, and a lot of the more advanced features like custom rules, value analysis, and custom views don't seem to get in his way. Yet he's also learned the sniping capabilities of the program very well... so I think even average users will be comfortable with the program, and when there are features they really want to use, they'll figure out a way to use them.

As for PowerSellers, I think their mileage may vary. One could definitely use BuyBot as a very powerful research tool. In fact, we use it here at Harvard quite a bit, to analyze hundreds of thousands of completed listings. We can analyze an entire market, say "Beanie Babies", and get every piece of data on eBay about those items and users' buying patterns. We can also use Microsoft Access to open up the database and analyze the raw data. If that wasn't enough, we could even write our own plug-in's to do what we need. But I think for sellers, flexible research tools are a requirement for maximizing your profits. Companies know this, and I see a lot of research solutions for sellers that range from hundreds to thousands of dollars... just look at the new growth in eBay's API department.

I can tell you, that we considered the eBay API for our research at Harvard. We analyzed the speed, the amount of time it took to develop the solutions we needed, and whether or not the API could do what we needed. And in the end we realized that BuyBot was the better solution. Plus we'd save Harvard several thousand dollars in research money... for eBay sellers paying out of their own pockets, I think you can look at the price of BuyBot, and the choice is clear.

I see a lot of great deals on eBay: like getting thousands of dollars worth of electronics for free. Are these great investing opportunities?

Ha ha, well, on a purely technical level, no. Investing means you buy something, and then sell it. (Hopefully for more than you paid!) When you're not paying for something you're not investing. But the "free electronics" idea is just one of many quasi-scams running around eBay. I say quasi because you may actually get some free electronics. But if I sold you a text file detailing how to rob an electronics store to get free electronics, would you say I was being totally upfront? The method requires deceiving companies in order to receive demo samples: not only is it dishonest, but it also doesn't work very well. And once those companies start losing samples, they begin to catch on, and then they stop giving out samples at all. The old adage that you can't get something for nothing is still very real, even in on-line marketplaces.

Software like BuyBot can create profits for users because it's based on new technology. In fact one of the major factors of economic growth in America is technology. It's the reason that so many companies have R&D departments, because they know that a technological advantage can boost profits far better than hiring new workers or buying more equipment.

The individual eBay user could learn a lot from such a philosophy: quite simply, if you want to be making money on eBay, more than the average user, you can either a) spend more hours on eBay, b) get a faster computer or Internet connection, or c) create your own R&D department: get BuyBot, and start learning to use it.

A lot of people dream of quitting their jobs, and running an on-line business, such as through eBay. So with your software, can they make millions?

I don't really think so. Every market has a capacity: because trillions of dollars get traded on the stock market, companies can easily make or lose millions with a single deal. The eBay market doesn't have anywhere near that kind of volume, however. Plus, a lot of the money that would normally go to people's businesses ends up going to eBay: when you only have a 10% profit margin on your inventory, 5% in fees can cut your profits in half. A few very large businesses might be selling over a $1M in sales on eBay per year, but this doesn't take into account their costs . A business that sells $1M of goods may only have $100,000 left after taking into account all their costs: inventory, fees, shipping, workers, and possibly taxes..

I think with eBay, it's important to be realistic. Most PowerSellers only barely make enough income to live off of, and they have to work much more than the average person. While they might not make millions, BuyBot can still be of great use to them, since it can help them understand their market better. And for the person who doesn't have time to hit up thrift stores and other sources of cheap merchandise, BuyBot plays an even bigger role, since these people will rely heavily on on-line purchases for their inventory.

I think in my case, and perhaps the vast majority of other people, I have a regular full-time schedule, so I could never be a full-time eBay seller or buyer. BuyBot fits particularly well in my life, because it allows me to spend only a few hours each week planning purchases, which can then result in a very comfortable side-income (or savings).

It's great to hear about the possibilities, and obviously it'll vary for different people, but can you give us an example of how much a person can make using BuyBot?

About 18 months ago, I made roughly $6,000 off of $2,000 in buying and selling through eBay in only 6 months. So that's essentially a 300% investment in half a year. The previous year it was about $5,000 off of roughly $2,000 in investments. Haha, I'd talk about this year, but I've been so busy developing BuyBot that I'll admit I haven't had any time to really buy or sell anything. It's difficult to put an exact number on how much time and money I've saved by using BuyBot instead of having to use the clunky eBay website, but I'm pretty sure those savings would be worth thirty bucks to me.

Of course, the numbers I post might be mediocre for a lot of PowerSellers, but then they work about 80-hour weeks, whereas I spend roughly an hour or two a week using BuyBot!

BuyBot originally came from a research environment... as a result, is it very difficult to use?

Well, like I said before, I think people who aren't computer experts will be able to use the program OK... the interface is very standardized, and modeled a lot like most Microsoft programs. This isn't to say I think Microsoft is the pinnacle of GUI design, but I mean who hasn't used a program like Outlook? It definitely makes BuyBot much easier to pick up, without ever touching the manual. So hopefully somebody can see the Rule Wizard, and figure out how to use it with much learning involved.

On the other hand, though, it's true that BuyBot does incorporate some rather advanced theoretical constructs. One doing value analysis, for instance, may get the most out of those features if they have a good understanding of concepts like private and public value, price distributions, price dispersion, market efficiency, etc. I realize there may be few people who have familiarity with all these topics, or even remember them from college... so the program was designed to hide as much of the details as possible. My hope is that a person could learn to use the Value View effectively after only reading the manual for a couple minutes. So, in response, I don't think it's difficult to use... I just think it's difficult to understand!

Any idea on the future of e-commerce?

Like anything involving money, I'm not positive what the future of e-commerce looks like, but I certainly hope BuyBot is involved. I think one thing we'll see is greater unification of buying and selling venues. The whole great thing about the Internet is that it allowed us to make all these new connections: I don't have to go to the local electronics store to buy a new TV, I can go to www.tvs-r-us.com, or www.we-sell-tvs.com and get a better deal. In other words, we, the consumers have far more choice in who we buy from. Likewise, when eBay came along, we didn't just have to buy from real businesses... we could buy from anybody who had an eBay account and some time on their hands to make some listings.

The problem is, we now have so many choices, we can't possible keep checking them all. If I wanted to buy a TV, there are probably tens of thousands of different websites I could buy one from... but I only need to choose one. There are services that are helping us make these difficult decisions... a service like Froogle, for instance, which can price-compare products from thousands of different websites.

BuyBot is a small step in that same direction. Today it's just eBay, but in a month from now, it'll probably be able to check major e-tailers like Amazon and Buy.com too. And don't forget the literally hundreds of other auction sites out there too. I've also seen a recent surge in classified websites, like CraigsList, and the entire Audiogon, Photogon, Videogon family. Four or six years ago, if you wanted the best deal on something, you went to eBay... I don't think that's the case anymore. In a few years, who knows, people may say if you want the best deal, you just go to BuyBot!

Even when all the on-line marketplaces are unified, that won't be the end of things, I think. We're still trying to strike a careful balance between having enough choices, and having information overload... nobody's really figured out a solution yet, and super-intelligent machines that can sort through listings as well as a human probably won't exist in my lifetime. So we have to constantly innovate; it's impossible to resist innovation.

The slew of eBay software developers out there right now are mostly pre-occupied with things that are already proven, such as selling or sniping software. In other words, innovation is low. But they'll catch on eventually, and move on if they want to stay in business. If we look to eBay, we see that innovation is even lower there: we've had the same simplistic searching interface for years. I used to be able to search completed items that went back to a month... now I can only do two weeks (plus I have to log-in each time, arrrggghh!!!). You might say innovation is negative on eBay. But this can't go on forever... eventually, we're going to start seeing the market really move forward and innovate. It will be a force nobody can resist, not even eBay. I just hope BuyBot is there, riding the top of that wave.

 

 

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