Newegg Guns for Amazon
April 22, 2008 12:30 PM
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The world's largest computer etailer poises itself as an alternative to the world's largest etailer
Newegg, often heralded for its fast shipping times and high-tech shipping facilities, isn't happy with being the largest computer e-tailer anymore.
The company today announced
, a spinoff of the Newegg.com website and business model. Like Amazon, NeweggMall gives smaller retailers an outlet to showcase their wares but uses Newegg's logistics tracking and content management system.
The end result is, well, Amazon. Consumers can buy from the NeweggMall site, and products are drop-shipped from the reseller. Newegg takes a portion of the revenue from the sale, which it justifies by handling the portal and logistics. Depending on category, that portion can range from 6 to 15 percent, nearly identical to the revenue share structure at Amazon.com.
Newegg Mall is also the same division that manages the
, a community of blogs and forums created to provide product feedback on products featured at Newegg.com. Certainly this forum will also be used for the new categories featured at Newegg Mall as well.
Newegg representatives tell
the new marketplace will officially launch on May 27, 2008, though the site appears to be taking orders already. More information is available from
the Newegg Mall About Page
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4/22/2008 7:20:14 PM
I've written to the Egg on this topic, and received a canned reply: I wrote something like "it's a shame you can't offer USPS shipment of small, inexpensive items -- like memory, MicroSD cards and some cables -- as you could cover packaging and postage for under $2. It would make shopping at the Egg more reasonable for small items." They responded with something like "We're sorry you are unhappy with our shipping costs as we try to satisfy all our customers."
Their profit model doesn't include encouraging low-cost orders. More surprisingly, they make little effort to reduce shipping costs when you bundle numerous small items into a decent total cost: I've been driven to other sites when ordering $60+ of numerous cables as the Egg didn't drop the effective per-item shipping cost as many vendors do. Then again, I don't know of any other place that regularly uses such ill-matched packaging: over the years I've spent $10K+ with the Egg and most of the items have occupied -well under- 20% of their box size. I've received minor items in a 1 cubic-foot box several times.
They aren't the worst, however: I once received a tiny item barely larger than a resistor in one of those cubic-foot boxes. Had to spread all the plastic "popcorn" across the floor to finally find the piece. Sigh.
4/23/2008 2:43:29 PM
I just checked, and a $0.89 +$2.29 item went to $11.03 with an order of $10. There was no kind of "volume savings" listed, and I know that my total shipping costs for past orders have not been the sum of the shipping quotes.
4/25/2008 4:26:04 PM
I've received minor items in a 1 cubic-foot box several times
I have to reply to this, I work for a "Shipping/Supply Company", although I'm nolonger involved in the shiping process, I am involved with cost, contracts, etc. They simply do this because of cost. It cost too much to order different size boxes, I know it seems like a waste but you would be surprized at how much they save doing that. I know you guys like your numbers on this cite but you'll just have to trust me on that fact. As well, recieving your items in larger packages is better for you anyways. You should see what some of those very popular shiping services put your stuff through.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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