Bonanza for Bonanzle: Startup Changes Name, Buys 1000Markets, Leads Social Commerce Wave

9/21/10Follow @gthuang

The Seattle-based online marketplace Bonanzle is on the move today. The company announced it has changed its name to Bonanza (it now uses Bonanza.com), and has acquired 1000Markets, an online community of marketplaces for niche products and artisan crafts, also based in Seattle. (See this blog post on the phase-out of 1000Markets.) Financial terms of the deal were not given.

The broader significance here is that social e-commerce is taking a big step forward. The field is starting to coalesce around a few ideas and models that have proven to be profitable—like Bonanza, which lets buyers and sellers interact, and makes money from transactions and premium subscriptions. Now the challenge is how to extend this model to a much bigger audience. The addition of 1000Markets should make an interesting complement to Bonanza’s business, adding variety in the types of goods offered as well as a new community of buyers and sellers. (The news also fits one of the themes I’m watching nationally, which is how Seattle startups could help reinvent e-commerce yet again, after Amazon.com.)

I first profiled Bonanza (then called Bonanzle) last year, when it was a small but fast-growing, bootstrapped operation. At the time, founder and CEO Bill Harding said Bonanza.com “was taken.” So one question is how much the company paid for the new domain name, and why it’s a significant change—presumably “Bonanza” is better because it’s an actual word, and it has connotations of shopping deals and wealth.

“With where we expect to be in a year or two, it will be drops in the bucket. And most importantly, given the data we have on how much difficulty people had with the old name, it will be money well spent,” says Harding, in an e-mail. “In retrospect this move is going to seem very obviously a huge step forward for us.”

In April, the startup said it had raised $1 million from angel investors including Geoff Entress, Andy Liu, and Kelly Smith, plus venture firms Voyager Capital, Ignition Partners, and Matrix Partners. 1000Markets, for its part, raised about $500,000 last year from True Ventures and Founders Fund.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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  • http://www.bonanza.com/BookbinEtc BookbinEtc

    I’m thrilled about the name change. It will be much easier for shoppers to remember, and it’s a well-known word.

    Bonanza owners are on the ball, and are most receptive to input from sellers and buyers – it’s a great atmosphere for e-commerce, and improving all the time.

    Welcome to all the folks from 1000Markets!

    On to bigger and better – it’s all up from here!

  • http://www.bonanza.com/ecostar ecostar

    Good choice. It’s a great site, I hope this helps make it more of a household name.

  • Michelle

    Love it! Hundreds of people signing up every day! Had a Bonanza Block Party this past weekend and it was a success! Found good deals and sold too! Love the community!

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  • GR

    Seems that the Bonanza folks should have done their homework. 1000Markets sellers will not be moving over to Bonanza. Why would they, it’s not much different than Ebay. Bonanza isn’t a place for fine handmade craft or art.

    What a waste of “somebody’s” money….

  • Jackson

    Etsy forums are lit up over this. MANY of the 1000 Markets vendors have already chosen to close their 1000 Markets shops and will not be making the transition to Bonanza. So, I am not sure what they really bought. If the sellers aren’t moving there in big numbers, then Bonanza paid money to eliminate a chump change competitor, and I use the term competitor loosely.

    “Social Commerce” may be all well and good if you want to market cd’s to tweeners. However, if you look at the target audience for the average buyer of handmade, artisan products, it isn’t an audience that relies on social commerce. Someone got buzzword fever I guess.

    Funny, though, how the owner of 1000 Markets was so elitist he thought even Etsy was too littered with non-handmade goods. Now he goes and sells to an ebay wannabe.

    Yeah, I have no interest in placing my business in these people’s hands, and many of my 1000 Markets mates feel the same.

  • http://Bonanza Ray

    Anytime a site has major changes like has happened with the home made stuff site and the name change at Bonanza, people are bound to throw temper tantrums.

    Personally I think the name change is for the better. The old name was a strange one and hard to remember. I’m with holding my opinion on the buy out of the other site.

    As to the buy out,I have news for everyone. YOU DON’T OWN THE SITES, THEREFORE YOU DON’T MAKE THE RULES.

    We are all just “renters” at these selling sites. If the landlord decides to sell, like the hand made market place did, then that’s it.

    Get mad, stomp your feet, take your toys and go home. Doesn’t change the fact that the owners of that site sold it to Bonanza. Like it or not, doesn’t really make much difference.

    The sellers at Bonanza had NO warning that all the work they’ve put in for the last 2+ years getting the name bonanzle “out there” on the internet, was going in a toilet.

    They had no warning that all their promotional items such as business cards and such would be “old and out of date” now.

    Did they gripe about it, yes, for about a day and then they got busy and started changing the stuff they could.

    Bonanza IS NOT a feebay knock off. The site has a TON of sellers that hand make/craft or home make their merchandise. They also have sellers that sell Antiques, Collectibles and yes they have brand new factory produced items.

    Actually it’s a very good mix of almost anything you could want.

    The people in this thread that are calling BONANZA a feebay wannabe or a knock off are simply ignorant to what Bonanza is.
    And with narrow minded opinions like that, you would NOT last to long at our site. Bonanza is a good site. Not perfect but then what site is.

    If you want to try it out you will be welcome with open arms, if you choose to act like a narrow minded, ignorant child, take your “toys” and go elsewhere.

    But I’m kind of guessing that a lot of the smaller sites like 1000 markets or what ever it was called, are going to end up on the selling block in the future.

    At least you people from that site have a place that is ready to welcome you.

    What do you think would have happened if EBay bought that site??

    I’ll tell you what would have happened;

    1) They would have shut the site down the second the ink on the contract was on the paper, wouldn’t even wait for it to dry.

    2) They would have imported all your listings to their auction site and then you would have owned them a ton of money in fees.

    3) They would have turned the site into another auction off shoot like Half.com

    My money is on #1. Go look up Yahoo Auctions and what happened to them after feebay bought them.

    So again, come to Bonanza and we welcome you, or go elsewhere.
    Your site is sold, and will be closing. Best get busy on what you’re going to do and quit whining about something you have no control over. You’re a seller, so pay attention to that and stop the belly aching which is NOT productive at all

  • GR

    Ray,

    It sounds like perhaps it was “your money”?

    Sorry that there are so many unhappy ex-1000Markets members complaining and leaving. Maybe we don’t “own the sites or make the rules”, but we do own our work that was being shown. So, we CONTROL who we chose to work with. That is the thing Bonanza overlooked. It appears that you are the one who spends more time whining & belly aching.

    Btw, Thanks for the kind invitation to Bonanza. I’m sure you made a wonderful impression on millions of potential buyers & sellers.

    peace,
    GR

  • http://bonanza Simone Stevens

    Bonanza’s customer service is horrible. I paid for an order on Sept 5th and never received it. It has been in the resolution enter for weeks now. Any feedback or call would of been great. Trying to contact them by phone..but have been unsuccessful. Not a happy camper!

  • Reese Frank

    Yeah Ray,
    Sounds like you purchased the site yourself. Bonanza cannot even begin to compare to 1000Markets. You guys are right, it does remind me of Ebay. I hope someone else opens a new on line shop exactly like 1000Markets. I won’t ever be looking or participating in Bonanza. Wow. the name is so original!!!

  • Felisha Nelson

    what a waste of money. Those stupid VCs should of brought that new site that everybody is whispering about createinventandsell.com. it’s like two websites in one. You can post for arts & crafts and you can also post for Inventions. I heard they will be the only handmade site that will buy from their sellers, for their boutique in South Florida. I beleave they are only a year old and still in the development stages. I’m listed on 1000 markets, etsy, artfire and my favorite now is createinventandsell only because i heard they are buyers too, and not just going to take my listing fees. oh and that twitter person is just awsome.

  • http://SixToesInnovations.com Robertus

    They can call the site what they want- when the boards are full of people asking “Are you selling anything here?” or “How do I get sales here?”, I see a name change the same as painting a turd.
    Plus if you say anything out of step, they steal all your vowels from your posts, then boot you from their site.

    Bonanza of Turds.

  • Herman

    There is nothing new or exciting here. It is all Bonana hype!

    Bonanzle took-up the failed eBay model as soon as eBay dropped it.
    What’s that? “There’s a sucker born every minute”
    Ebay’s policy was, ‘the customer is always right’, the customer of course was the Dealer not the Buyer. So the Seller who sold damaged merchandise or over charged on shipping was ALWAYS right. And buyers left the site in droves. But as it was for years, for every buyer who left there were 10 new computers being purchased and new buyers to rip off. Eventually, the eBay sellers at large had screwed enough buyers and after the vast majority of households were now connected to the internet, the replacement of suckers was starting to even out and not make up for those who left the site. This was about the time that Meg Whitman wisely fled the ship. Then ebay, for the first time started to loose money.
    John Donahue did what should have been done years before, he stopped sellers from leaving negative feedback and he dumped the bottom 5% of the worst sellers on ebay. Those sellers went on to join sites like Bonanza which allowed them to transfer their positive feedback ratings. Bonanzal, like I said, took over the ebay mantel of the Customer is always right.

    The way Bonanza has been able to get around this fact is
    1) New Face: people who have been screwed by eBay dealers don’t know that the Bonanza dealer they are buying from is the same crook who cheated them once at eBay.
    2) Missdirection: They taut that “buyers and sellers interact”
    Get your facts staight and stop spewing free advertizing for Bonanza:
    EVERY SINGLE SITE ALLOWS BUYERS AND SELLERS TO INTERACT!!! As a buyer I can interact with sellers on eBay, Amazon, etc. The only difference is that Bonanza has a ‘live chat’ feature. If a Dealer is online at the time I visit the site, I can ‘live chat’ but I have had several ‘live chats’ thru email on eBay when the seller was also on line, and Bonanza live chat is no faster, it simply lets me know when a dealer is ‘in the room.’ Big hairy deal.

    The thing is that eBay ruined internet shopping because they refused to defend buyers and allowed sellers to intimidate buyers through negative feedback. Bonanza is different from the new eBay, but pretty much a carbon copy of the old one. If I find an item on Bonanza (thru google), I look to see if that seller is selling on any other site, if not I move on.

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