This program seeks to enlist both buyers and sellers into the service and then guarantee the sales between them.

For buyers, the service acts as a free escrow service and additionally insures their personal collections for up to $3000 for all sorts of hazards.

For sellers, the service lets them accept credit cards (through the service) and insures, in the case of rejected merchandise, that they will receive returned goods back in the same condition as when sent.

There are two real innovations here as I see it.

First, as an escrow service, the cost of the program to buyers is nothing. This is unheard of and means that buying from sellers who are AU Bidsafe members will be as secure as buying from Sears.

2) The program insures collectibles owned by members up to $3,000, including when they are in transit and in the hands of potential buyers (This protects the seller who sent his merchandise to the buyer for approval.)

This means that the program will be a success if sellers adopt the program. My question is will sellers adopt this program?

A quick analysis of costs on eBay vs. AU suggest they should as BidSafe sellers, with this extra level of service, will only be paying listing and commission fees comparable to eBay. (AU is that much cheaper right now)

First, regardless of auction, more than half of all sales (median price) are for merchandise priced under $25.

This means that on eBay, the seller is paying probably a listing fee of $50 cents or a dollar plus 5 percent of the final sale price as their selling fee. For that they simply get the listing and auction service.

On Auction Universe, our listing price is a flat quarter and the commission, a flat 2.5 percent -- this works out to about half that paid for the same service on eBay.

For an auction item that opened for $10 and sold for $25 -- not unusual -- the cost of selling on eBay would be $1.75.

Using AU's safe bid escrow serice the price is the same -- $1.75. (Safebid adds a 3.5 percent fee to the base listing costs of .25 listing fee and 2.5 commission.)

Not only is the cost to sellers less than they would pay to an escrow agent (Typically 5 percent of the sale) but the ultimate cost of the sale is the same as if it were sold on eBay.

What other savings might a seller save?

One bad check from a customer, charged at $25 by your bank, more than pays for the Bidsafe annual membership. Two bad checks and they are ahead of the game.

The confidence that people can bid with will also bring higher bids, for both new and seasoned sellers. (No one is going to send a person with a 3 rating a $1000 check.

Objections of dealing with newbies (who actually may have been in business for 20 or more years -- just not on the auctions) is eliminated.

Given all that :-), I am curious how the folks here react to Auction Universe's new Bid Safe program.

G. Patton Hughes
[email protected]