Topic: Newegg Needs to accept bit coin. - page 2. (Read 3725 times)

Simple fact is for Bitcoin to become anything more than basement geek coolness (look I at my mining rig) you have to start seeing more people/businesses willing to accept BTC as payment or exchange. I'm thinking more one on one transactions for services vs. larger businesses for products.

I have been trying to figure out how we could accept BTC in exchange for totally secure backup services we provide but would users be willing to be invoiced monthly and the price in BTC be a moving target? One month 1 BTC, the next who knows, not to mention there would have to be a padding in there for any price moves between invoiced date and payment date. If I knew there were enough geeks here who provide tech services to their own clients I can see where maybe they charge the client in $ but pay us in BTC and that might help drive it especially if they bought from us a chunk of backup space and then devided that up to their clients then we could charge based on the block, say 100GB, but cover the BTC price move based on them only using 80% of that then after they hit 81% they would have to go into the next storage block. Don't know, still trying to figure out some way to do it and not loose money while not overcharging as well.

Would be cool if they took it...been a newegg fan for like 10 years.

There are APIs for all of this now.  They could be converted automatically, and immediately.


You convert the same number of USDs to BTCs using the market rate when the refund is issued.


Your logic seems odd to me.  To accept a payment method that costs less, you want to charge more?  

Maybe your business is booming right now and you aren't hungry.  A lot of businesses aren't that fortunate -- they'ld welcome new sales that might occur after accepting bitcoins as payment.

Ask Meze Grill, for instance, if they regret the idea of accepting bitcoin as payment:
 - http://bit.ly/l07wny

I understand your point of view as I run a wholesale business myself. Fluctuation in pricing(even a little bit) can drastically undermine your bottom line. Now take the additional man hours it takes to convert these bitcoins into USD, handle refunds, etc...  There is no reasonable expectation that they will clear the same profit than were they to not accept them.

 I think a lot of folks simply look at the market rate and say hey! my bitcoins are worth $17.00. I'll give you 2 bitcoins for that $34.00 mouse pad. As a company, were I to accept bitcoins I would be skeptical that I would be able to get the funds I really need into a bank account to pay my creditors, employees, etc... in a timely manner. I don't have enough faith in the value yet. I know what my cost of goods are, I know to the penny what it costs to have an employee working for 1 hour or 41 hours. I know what I need to charge to break even, and I know what I need to charge to make a profit. A fluctuation in price of even .30$ could take me from profitable to break even or worse.

Now if there was a premium associated with accepting bitcoins' at this particular time (for arguments sake 1:1.25 I could reasonably justify accepting them for products that I stock and sell. Until that happens I would be very hesitant of tackling this animal.

This sounds a lot like a credit default swap. We know where that lead.

Although the last part - the part that didn't exist for CDS transactions - might help mitigate the potential crash.

A big site like newegg accepting bitcoins would definitely help the currency out.
Isn't a huge problem that the value of bitcoins changes so much though?

The price competitive businesses will be among the most enthusiastic about a low cost option to compete against businesses that only offer credit and debit payment card methods.


.  

0.65% exchange fee (on Mt. Gox) + $0.25 per-day to sweep the balance to Dwolla.


There are APIs for all of this now.


As long as the merchant waits for the transaction to confirm (and thus become irrevocable) before shipping, there is no fraud risk.  Are you instead trying to make an argument why consumers might not want to pay with bitcoins?


Let's see: no payment network fees (to the merchant), no chargeback risk, all payments "settle" (funds available to be spent) within an hour ...  hmm ...  what's the question again?

I don't think people realize that it's not as simple as making a form to pay with bitcoin and putting it on the site. Running a business isn't just taking money and giving a product out. You have to take a lot more things in consideration.

Like I said in a earlier post on this thread, Newegg has no use for bitcoin because they can't pay suppliers, shippers, or employees with BTC. They probably will never have a use for bitcoin as long as they wish to deliver things with low prices, and they will never be legally able to pay their employees in BTC in the USA*. Think of all the fees associated with BTC when the only use you have for it is turning it into money. You pay the trade site a commission, then you pay dwolla (or trade site for different method) an amount to withdraw those funds. All of that is done on a not as developed infrastructure, unlike credit cards. Yes they paid fee's with credit cards, but they also get a whole hell of a lot more protection in that way, since the fees from credit cards help pay towards anti fraud services and insurance. Does bitcoin really have any fraud protection other than people pointing out scams?

They don't get any benefit from internationally purchases, which could be easier with bitcoin, since they don't ship internationally.

Then there's also taxes, employee benefits, and other costs that can't be covered by bitcoin. Also, they would need to add more support and/or train support people to deal with BTC translations.

So in the end, if you were running this business rationally, with consideration of the well-being of your employees and business growth, would you accept bitcoin?

*If you disagree with this point, look how long it takes for any technology legislation to be passed or how informed the people deciding those things are. Hint: Most of them get money from businesses to insure that businesses interests.

In real time your asking for them to pull the current price of BTC, validate product price, provide BTC price for product then protect themselves from any changes in BTC between when you were quoted and when the shopping cart was processed then automate the actual transaction from wallet to wallet. At the current margins on most items they sell this just isn't built into those margins meaning they would have to increase, even if by a little, a higher margin to cover the programming and variation in BTC prices.

I don't see that happening. Again even though Newegg has grown they are really no more than an eCommerce frontend to the disti. Ingram or Techdata, don't remember which, came to us some 8 years ago to do the same thing.

yeah it's never going to happen because they cannot without some hefty programming compute the current price of a product with their current margin on that category against a fluctuating BTC. Then the whole tax reporting issue comes into play. They could however and probably should be looking at Dwolla then it would not matter what the BTC price is, where the money originated or anything else.

Remember they are just an eCommerce frontend to the disti.

Would be great if they did, however Newegg I assume has very tight margins, and the volitility of bitcoin at times could cause them to even loose money. I 'm just a newbie and still getting my head around bitcoin :O

It is effectively the same thing, but most companies would have a better time saying they need insurance to minimize risks associated with innovation rather than saying they need to buy options on an unstable market to hedge risks. But yes, the insurance is basically a put, but they would know ahead of time that there is someone who was contractually obligated to take it (and they would pay more because of that).

LOL Most of us at Geek Squad are running Rigs

bitoption.org, buy puts.

I'd be happy with newegg making an official bitegg.net equivalent w/ a discount for buying the gift card.
eg @ $16/BTC, newegg wants .99BTC for a $16 gift card and sells the BTC immediatly if they don't want to hold onto it.  you think it might happen?

is there a list of "relatively large" sites that accept bitcoin somewhere

One thing that would help a lot is if one of the exchanges could offer BTC rate insurance. The way it would work is a company like NewEgg takes bitcoins and purchases rate insurance on them. If they accept them at the going rate, say 16BTC, the insurance might cost 1% of the dollar value and would allow them to exchange the BTC for USD at 90% of the rate they accepted them if the rate was lower than that for the entire following month.

For example say NewEgg accepts $500 as 31.25 BTC at an exchange rate of 16.
NewEgg pays a $5 to insure their 31.25 BTC.
In 30 days, NewEgg may claim their insurance any time in the next 30 days if the exchange rate drops below 14.4
If NewEgg claims the insurance, the insurer pays them 90% of the their money ($450) and takes their 31.25BTC.

This will cost NewEgg less than they pay for credit card fees. And it caps their loss at 10%. The insurance should be possible to provide cheaply, since you're only covering the drop in value.

You do need a stop loss provision. Something like: If the exchange rate drops below 80% of the rate at time of purchase, the insurance company can give NewEgg two days to either trade their BTC at full value (they get $500, they lose nothing) or give up the insurance. This allows the insurance company to cap their payouts at only a bit more than 10% of the insured amount, unless the exchange rate drops catastrophically.

They would probably gain the ability to defer profit taking. Depending on some details about how they operate and how aggressive they're willing to be, there could be other tax benefits as well, especially for international corporation. They would take the risk bitcoins would drop in value, but they would gain the benefit of any rise in value. And, of course, they probably pay at least 2% in credit card fees, chargebacks, and so on.

Correct, until they have a place for those bitcoins to go (i.., employees, suppliers or investors) then they would likely be cashing out most of (or all of) those bitcoins that they've received.

However,
 - Credit card transactions can be reversed by the payment network.  Bitcoin payments are irrevocable.  This is attractive to a merchant -- especially a low-margin merchant like NewEgg.
 - Credit card transactions incur a fee.  Newegg probably gets about $0.98 for every $1 charged.  With bitcoin, the transaction fee is paid when the transaction is sent.  Even then the fee is fraction of the fee that the payment card networks charge.
 - Credit card transactions don't clear immediately.  The settlement process takes a day or two or more before NewEgg's bank has the money.  Bitcoin transactions "clear" in about an hour.

And ..
 NewEgg's competitors will discover bitcoin as well.  For NewEgg to compete, they may be forced to accept bitcoin or else lose those sales:
  - http://twitter.com/#!/ComputerGeeks/statuses/86467167851266048


Incidentally, there's another vendor offering NewEgg prepaid virtual gift cards as well:
  http://www.BTCBuy.info  (NewEgg, Amazon, Walmart, and Buy.com gift cards)

I don't know why newegg would want to accept bitcoin since the price is so volatile. If someone got a $200 item with bitcoin, and bitcoin price dropped a dollar or two, then they'd lose a good amount of money. Also, the shipping they pay in USD and they pay their suppliers in USD, so all the bitcoin would amount to is collecting fees from currency exchange sites since they have no way to use that bitcoin.