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Buy.com

Buy.com

Overview
Buy.com, Incorporated is an online
ONLINE
ONLINE is a magazine for information systems first published in 1977. The publisher Online, Inc. was founded the year before. In May 2002, Information Today, Inc. acquired the assets of Online Inc....

 retailer based in Aliso Viejo, California
Aliso Viejo, California
Aliso Viejo is a city in Orange County, California. It had a population of 47,823 as of the 2010 census, up from 40,166 as of the 2000 census. It became Orange County's 34th city on July 1, 2001, the only city in the county to incorporate since 2000...

.

Buy.com began by selling computers and electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...

 in 1997 and has since expanded into many other categories. Initially Buy.com sold items below cost and intended to make up the losses "from the sale of advertising and ancillary services like warranties and equipment leases." Buy.com sold $111 million worth of goods and services in 1998, its first full year, beating Compaq
Compaq
Compaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....

's record for most first-year sales of any company.

Founder Scott Blum sold his stake to SoftBank
SoftBank
is a Japanese telecommunications and internet corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses....

 in 1999 for $195 million just before the company first filed to go public.
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Encyclopedia
Buy.com, Incorporated is an online
ONLINE
ONLINE is a magazine for information systems first published in 1977. The publisher Online, Inc. was founded the year before. In May 2002, Information Today, Inc. acquired the assets of Online Inc....

 retailer based in Aliso Viejo, California
Aliso Viejo, California
Aliso Viejo is a city in Orange County, California. It had a population of 47,823 as of the 2010 census, up from 40,166 as of the 2000 census. It became Orange County's 34th city on July 1, 2001, the only city in the county to incorporate since 2000...

.

Buy.com began by selling computers and electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...

 in 1997 and has since expanded into many other categories. Initially Buy.com sold items below cost and intended to make up the losses "from the sale of advertising and ancillary services like warranties and equipment leases." Buy.com sold $111 million worth of goods and services in 1998, its first full year, beating Compaq
Compaq
Compaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....

's record for most first-year sales of any company.

History


Founder Scott Blum sold his stake to SoftBank
SoftBank
is a Japanese telecommunications and internet corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses....

 in 1999 for $195 million just before the company first filed to go public. Stock values plummeted in the year following Buy.com's initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...

 and in 2001 Blum reacquired Buy.com and took it private for 17 cents per share.

In 2002, Buy.com decided to go beyond selling solely electronics, movies and music and began adding more soft goods to their catalog. It was this same time that Blum extended a welcome to Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...

 customers. Appearing in the Wall Street Journal, Blum’s address promised Amazon customers that Buy.com would prove itself to be the better buying option. This statement came shortly after Buy.com announced a 10% below Amazon.com cost on all books sold on the site and a free shipping site-wide offer.

Later that year Buy.com launched its first issue of BuyMagazine. Buy.com later converted the magazine into an all-digital publication. When Buy.com updated its website in 2006, it announced a marketplace that allows consumers to purchase from various sellers with only one account necessary to process their purchase. At launch, Buy.com had 100 marketplace sellers; the company now works with thousands of sellers that collectively offer 11.5 million products. The company has become the second company in eBay history to receive over 1 million positive customer reviews, and holds a satisfaction rating of 99.6%.

In July 2010, Buy.com was acquired by Rakuten
Rakuten
operates and manages business to consumer electronic commerce site, Rakuten Ichiba, and consumer to consumer auction site, Rakuten Freemarket. Its business is centered in Japan, although it has began international expansion through acquisitions. The chief executive officer is Hiroshi Mikitani...

, Inc., Japan’s biggest e-commerce company. The acquisition was valued at approximately $250 million (USD). Shortly following the acquisition, on July 22, 2010 Buy.com announced its new 45-day return policy replacing the industry-standard 30-day return policy.

Buy.com reported its best Black Friday performance in company history in November 2010, with more than 45 percent year-over-year sales growth on the Buy.com site (as of 5 p.m. PST on Friday, Nov. 26). A major driver of the company's overall growth included sales through Buy.com's marketplace, which grew by more than 100 percent compared to Black Friday of last year. Again, in November 2010 Buy.com reported its best sales day in company history on Cyber Monday, outpacing its record-breaking Cyber Monday performance in 2009. As of 5 p.m. PST on Monday, Nov. 29, the company experienced 48 percent higher year-over-year sales growth on the Buy.com site.

Criticism


The company has been criticized for poor service, including delayed shipping, shipping incorrect and damaged items, providing conflicting information on product availability and price online, or even simply canceling confirmed orders without any notification to customers. they have a 8.10/10 lifetime rating on ResellerRatings
ResellerRatings
ResellerRatings is a web-based business that solicits consumer reviews of online retailers and sells "Merchant Memberships" to those stores. Rated stores are given two scores - a lifetime score and a six-months score...

with over 4,179 reviews. Buy.com carries no inventory but brokers deals between buyers and distributors who would typically sell directly to retailers. This business model has received attention for minimizing the environmental impact of shopping.

Buy.com's eBay business has also been the subject of much criticism. Many accuse the company of having a significant unfair advantage over smaller eBay sellers. The company has a special fee arrangement with eBay and pays substantially less for fees than smaller sellers; as a result, the company is able to essentially "spam" eBay with a large assortment of products, something that would not be feasible for other eBay sellers to do..

External links