Up to Morgan's scary business models
BeenyBuy.com aims to replicate the frenzy surrounding Beanie Babies for a new type of collectible: the interactive web collectible. Each BeenyBuy has a password-protected page where their owner can play with them (or show them to friends). BeenyBuy.com also brings less than zero margins, made famous by buy.com, to trading fees.
Beanie Babies, trading cards, and other traditional collectibles are sold in carefully determined quantities by the manufacturer, which earns a recurring revenue stream by creating interest in new versions of the product. The Beanie Baby craze, however, has shown that the greatest value of a successful line of collectibles lies in the trading volume they generate, rather than in the initial purchase price. (Indeed, several Internet startups already focus on Beanie Baby trading.) The next step in the evolution of the industry is to subsidize the collectibles and make money back on trading fees. The problem with this concept is twofold: first, the subsidy of the collectible represents a major financial risk if the trading frenzy does not materialize, and second, traders can move to a different site with lower transaction fees.
BeenyBuy's unique web collectibles address both problems. First, because the collectibles are purely virtual, manufacturing and distribution costs are zilch: giving away the collectibles represents little risk. Second, BeenyBuy discourages traders from moving to another venue by paying for each trade. BeenyBuy makes money on advertising, viewed both by traders and by collectors viewing their BeenyBuys.
Web collectibles have many other advantages:
December, 1999
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