Payments startup Ribbon is taking on marketplaces like Craigslist, Etsy, and eBay by making it simple to flog your latest needlepoint masterpiece, used couch or life coach services from a huge swath of online gathering spots. That includes Twitter streams, Facebook posts, YouTube videos and virtually any blog. And if that weren't enough ambition, Ribbon is also going after PayPal. The simple idea behind the startup is that rather than dragging people from the social flow of Facebook, Twitter and YouTube, shoppers can buy while they do what comes most natural: snooping on their friends and watching funny videos.
Ribbon CEO Hany Rashwan built his service to be a less intrusive way for shoppers to check out online, without all the back and forth between a site and PayPal or any other payment network. "Ribbon's intention is to make payments frictionless, in that buyers can buy the item instantly wherever they already are, whether that's in-stream on Twitter or directly on the newsfeed on Facebook," he says. To that end, Ribbon offers anyone who wants to sell something online their own checkout page that can be shared across all kinds of social services and web pages. In addition to selling physical goods and services, Ribbon offers storefront tools that allow musicians, filmmakers, and authors the option to peddle digital content like music or film downloads.
Here's how it works. Instead of posting your product to Craigslist, eBay or Etsy, you sign up with Ribbon, post a photo or description of your product or service and set a price. Ribbon hosts the seller's product page, which can then be shared to Facebook, Twitter, YouTube, Blogger and WordPress. Via the product page, shoppers can instantly buy your merchandise without visiting another site, or making an account to check out.
For example, a company like GoPro (who is not a current customer), could add a Ribbon payment form to a tweet about their latest camera. Those who follow the company could expand the tweet and purchase the camera right from their Twitter feed by entering their credit card, billing, and shipping information. Ribbon processes the payment, and GoPro then sends out the product. The whole process is supposed to take only a few minutes and be easy enough that shoppers won't hesitate to make the purchase. In other words, impulse buys are more impulsive.
Once that buy button is tapped, Ribbon handles the rest. It takes care of the credit card transaction when the item sells. There's no monthly or setup fees, but sellers pay 5 percent of the purchase price, plus 30 cents per transaction. Sellers get paid once per month by mailed check, direct deposit, or via PayPal (Ribbon doesn't want to kill all of PayPal's business).
As an unknown startup, Ribbon is clearly taking the cheaper route to attract customers. For example Ebay's listing fees vary based on an item's starting price, ranging from 15 cents to four dollars. Once an item sells, eBay charges a Final Value fee, which starts at 8.75 percent of the purchase total and can climb to $36 plus 1.5 percent of final price if something sells for $1,000 or more.
But cheap will only go so far. On Facebook, Ribbon's biggest hurdle will be to make the shared listings relevant enough that people don't just pass them by without making a purchase. You'll only see Ribbon listings from your Facebook friends or the pages you follow on the social network, which in theory cuts down the number of unwanted postings. Though that brings to mind all those hateful Farmville updates that clogged everyone's Facebook feed. It's unclear whether eventually you'll also see a Ribbon listing from a company your friend likes on Facebook, since those pages' announcements can show up in your news feed.
The other barrier to Ribbon's world domination is scale. Sites like Etsy and Stubhub work so well because they have a large and constantly changing marketplace of stuff that people want. They are online bazaars filled with buyers and sellers. Whether Facebook and Twitter are the right places for this kind of commerce is still an open question. Facebook recently made it clear not to expect much revenue from its Gifts feature for the foreseeable future. Will Ribbon give you better odds of selling your old iphoness to a Facebook friend instead of a complete stranger on Craigslist? It makes sense that it would, or at least be a more pleasant transaction. Ribbon is certainly betting its approach offers a better experience and more efficient marketplace for all kinds of products and services, and it's not alone. Facebook and Twitter are of the same opinion. Ribbon's vision sends the startup in the same direction as the largest social sites our there. Drafting behind their progress is a very smart move.
