Gender Genie: Psychohistory is Male!

Or at least, written by a male author.

Couldn’t resist reposting this fun link, the Gender Genie.

Paste in text from an article or blog post, ideally over 500 words, and it will guess the gender.

Many thanks to Graceful Flavor for finding this. They actually ran about a dozen well known blogs and sites through it, with mixed results.

Apparently, however, Psychohistory is written in a crushingly male style (based on my post on President Ford, the last over 500 words):

Words: 532
Female Score: 462
Male Score: 814
The Gender Genie thinks the author of this passage is: male!

New eBay Guide: Collecting the New 24K Gold First Spouse Program Coins

Nothing here that you haven’t read already in my previous blog post, but I have completed my fourth eBay Guide.  Writing eBay guides has been surprisingly rewarding.  Far more page views that I would have expected (some guides are getting to nearly 500 page views), and I’ve now made it to the “Top 2000” of all writers.

Here is the new guide:

Collecting the New 24K Gold First Spouse Program Coins

As usual, if you are a registered eBay user, please review the guide and vote “yes” for its usefulness.  The more “yes” votes it receives, the more likely it is that another eBay user, searching on relevant terms, will see the guide.

Update: US Mint Schedule for Presidential $1 Dollar Coin Program

The US Mint has published the initial schedule for new products in 2007:

2007 Scheduled Products Listing
The following list displays the United States Mint’s 2007 products and their dates of availability. This list will be updated periodically as dates for products being released later in the year have yet to be set. All dates are subject to change by the United States Mint without prior notice.

Availability Date Product Description
January 10 Jamestown 400th Anniversary Commemorative Coin Program
January/February United States Mint 50 State Quarters Proof Set™
January/February United States Mint 50 State Quarters Silver Proof Set™
January 29 Montana Quarter Bags and Two-Roll Sets
February 5 American Eagle Gold Proof Coins
February 5 American Buffalo Gold Proof One Ounce Coin
February 15 United States Mint Presidential $1 Coin Proof Set
February 15 George Washington $1 Coin Bags and Rolls
February 20 Golden Dollar Bags and Rolls
February 20 Kennedy Half-Dollar Bag and Two-Roll Set
March American Eagle Silver Proof Coin
March/April American Eagle Uncirculated Coins
April Washington Quarter Bags and Two-Roll Sets
April United States Mint Proof Set(R)
May Presidential Spouse Gold Proof Coin
May
Presidential Spouse Bronze Medal 1 5/16″
May
John Adams $1 Coin Bags and Rolls
May Little Rock Central High School Desegregation Silver Dollar

I’ve highlighted the products related to the new Presidential $1 Dollar Coin Program. Note that there is a proof set for the Presidential Dollar coins, but not a silver proof set, at least, not as of May 2007.

Has HD DVD’s AACS Protection Been Cracked Already?

Caught this on Gizmodo this morning:

They told us it was bullet-proof, unbreakable. Yet in a mere eight days, a hacker by the name of Muslix64 has managed to single-handedly break the Advanced Access Content System (AACS), the standard that Disney, Intel, Microsoft, Sony, and others developed to protect HD DVD and Blu-ray discs. Or has he? The BackupHDDVD software Muslix64 posted on a Doom 9 forum thread lets you decrypt Full Metal Jacket, Van Helsing, and a few other popular HD DVD titles, but there’s still no way of telling how he managed to get a hold of the decryption keys. Only time will tell if Muslix64 is the DVD Jon of the next-gen optical discs. – Louis Ramirez

If true, this is extremely interesting for a number of reasons.  The music industry is still in denial about what their customers want and will allow them to monetize, after years of digital music.  To date, most digital music is still acquired through a purchased CD and ripped to the MP3 format, which is compatible with all players.

It seems obvious, by default, that video will follow the same path.  That the preferred method of acquisition will be a lawfully purchased DVD (now less than $5.99 in some places), ripped easily to the MP4 format, with no digital rights management to deal with.

Wouldn’t it be ironic, if, in all the fury over the HD-DVD vs. Blu-Ray formats, if one of them is cracked and the other isn’t?  The movie industry might swing to the “safe” format, while consumers might quickly gravitate to the one that allows them to more easily use the content (the “open” format).

Of course, both of these formats will be cracked in relatively short order.  It seems inevitable given the complexity involved in protecting content for delivery, and the literally millions of young hackers out there trying to become the next DVD Jon.

We’ll see if this one pans out.  It might be just a one-off crack for a few titles.

Red State vs. Blue State vs. Purple America

Sorry, a lot of politics tonight. I guess it’s all the news about President Ford.

Still, I had to share this. I don’t know how I missed it, but in all the debate about what it means to live in a “red state” vs. a “blue state”, I found an interesting graphic when browsing Wikipedia.

It all started with the link to the 1976 Election page.

I immediately noticed that this chart had the Democrats in Red, the Republicans in Blue – the opposite of the current color scheme in use. In fact, I then found this very interesting piece on the origins of the entire color scheme here.

Prior to the 2000 presidential election, there was no universally recognized color scheme to represent the parties. The practice of using colors to represent parties on electoral maps dates back at least as far as the 1950s, when such a format was employed within the Hammond series of historical atlases. Color-based schemes became more widespread with the adoption of color television in the 1960s and nearly ubiquitous with the advent of color in newspapers. Early on, the most common—though again, not universal—color scheme was to use red for Democrats and blue for Republicans. This was the color scheme employed by NBC—David Brinkley famously referred to the 1984 map showing Reagan’s 49-state landslide as a “sea of blue”, but this color scheme was also employed by most news magazines. CBS during this same period, however, used the opposite scheme—blue for Democrats, red for Republicans. ABC was less consistent than its elder network brothers; in at least two presidential elections during this time before the emergence of cable new outlets, ABC used yellow for one major party and blue for the other. As late as 1996, there was still no universal association of one color with one party.[2]; if anything, the majority of outlets in 1996 were using blue for the GOP and red for the Democrats.

But in 2000, for the first time, all major media outlets used the same colors for each party: Red for Republicans, blue for Democrats. Partly as a result of this first-time universal color-coding, the terms Red States and Blue States entered popular usage in the weeks following the 2000 presidential election. Additionally, the closeness of the disputed election kept the colored maps in the public view for longer than usual, and red and blue thus became fixed in the media and in many people’s minds.[3] Journalists began to routinely refer to “blue states” and “red states” even before the 2000 election was settled, such as The Atlantic’s cover story by David Brooks in the December 2001 issue entitled, “One Nation, Slightly Divisible.” Thus red and blue became fixed in the media and in many people’s minds [4] despite the fact that no “official” color choices had been made by the parties.

Fascinating.  So we owe the current “red state”, “blue state” terminology to:

  1. The invention of color TV
  2. The standardization of treatment in 2000 by the networks
  3. The decision to use the opposite treatment for liberal vs. conservative that the rest of the world uses (typical)

Probably the most interesting picture I found here was the link to Purple America:

As someone who has only participated in elections in either the SF Bay Area or Boston, it was nice to see that the nation as a whole, even now, is far more balanced than you might think.  People seem to quickly forget how shockingly close all of the last 4 elections have been.  Amnesia seems to be tied to your party squeaking out the win.

Anyway, just an intellectual tidbit for this evening.  I’ll be back to personal finance topics soon – those do seem to be the aggregate favorite for this blog.

A Brief Note for President Gerald Ford (1913-2006) & My Historical Blind Spot

I’ve been reading a lot of the coverage this week about President Ford.  It has been extremely educational for me, since Gerald Ford falls into what I call my historical blind spot.

Almost everyone is familiar with the blind spot you suffer when you drive a car.  Off to the right, and down to the back, there is a triangle that seems like it should be visible in your mirror – but it isn’t.  Trucks & vans often have a worse blind spot than cars.  It’s a fascinating thing – so obvious when you look at it on paper, but so hard to recognize when you are actually driving.

I think the same thing happens to people around history.  Most people learn their history in two places: in primary & secondary school, and then throughout life as they are living it.  For example, my most in depth course work in history was in high school when I took AP US History in the 11th grade (1990).  Incredible depth and memorization of names, treaties, bills and events in the 18th & 19th centuries, all the way through about 1965.  Once we got past Kennedy & Martin Luther King, all of a sudden, the textbooks turned to mush.  A few days here and there of miniscule coverage of Vietnam, Watergate, and a couple of oil crises for good measure.  Stagflation.  Voodoo economics.

High school is also the time when I began following current events in some detail.  I participated in policy debate on topics ranging from retirement savings, prison reform, nuclear proliferation and space exploration.  I read several newspapers daily.

I’ve noticed since then, however, that I have a historical blind spot that dates from the mid-1960s to the late 1970s.  Sorry, no memory of Ford or Carter, although technically I was alive at the time.  I have some memory of the early 1980s, which has made it easier to fill in detail about the decade over time.  (My favorite, of course, was re-watching the televised Reagan-Carter debate in 1980 on PBS.   Although it was a landslide for Reagan, both in the debate and election, both seemed so much more coherent and direct than any modern debate I recall watching.)

Is this common?  Do most people have a historical blind spot between the time that their in-school history material ran out, and before their personal experience began?  As I read more about Gerald Ford’s Presidency, it feels strange that I know more about the 1930s than the 1970s.

Let me be clear, I certainly knew about Nixon’s pardon.  But not the rich color around it.  Not the detail I’ve been seeing the recent newspaper coverage.  Actually, Wikipedia has been wonderful here as well.  Their section on Gerald Ford is great, and the detail about the 1976 election is also great.  I think I was missing a significant part of history here.

Anyway, I’m going to augment my reading list for 2007 with some more material on the 1970s.  I think my approach to it has been too segmented (space policy, energy policy, monetary policy, etc) rather than a holistic view.  I’ll likely start with some of the biographies that will be hitting the presses momentarily.

The 2007 First Spouse 24K Gold Coin Program (Companion to the Presidential $1 Dollar Coin Program)

Some new detail is now available on the US Mint website about the companion program to the new Presidential $1 Dollar Coin Program launching in 2007.

In case you missed it, I’ve written a couple of posts about the program, and they have both been fairly popular over time:

Some interesting detail about the program:

The United States is honoring our Nation’s First Spouses by issuing one-half ounce $10 gold coins featuring their images, in the order that they served as first spouse, beginning in 2007 with Martha Washington, Abigail Adams, (Thomas Jefferson’s Liberty) and Dolley Madison. The obverse of these coins will feature portraits of the Nation’s First Spouses, their names, the dates and order of their term as first spouse, as well as the year of minting or issuance, “In God We Trust” and “Liberty.” The United States Mint will mint and issue First Spouse Gold Coins on the same schedule as the Presidential $1 Coins issued honoring the Presidents. Each coin will have a unique reverse design featuring an image emblematic of that spouse’s life and work, as well as “The United States of America,” “E Pluribus Unum,” “$10,” “1/2 oz.” and “.9999 Fine Gold.”

When a President served without a First Spouse, such as Thomas Jefferson, a gold coin will be issued bearing an obverse image emblematic of Liberty as depicted on a circulating coin of that era, and bearing a reverse image emblematic of themes of that President.

The United States Mint will also produce and make available to the public bronze medal duplicates of the First Spouse Gold Coins.

A few key points stand out to me here, as a collector:

  1. These coins will be expensive. These look like they will be the second series of coins in US history to be a full 24K gold (99.99% pure). The first, of course, was the new 2006 American Buffalo, and at one ounce the proof version of this coin sold for $800. Given that the price of gold is not likely to decrease much in the near term, it’s likely that each of these coins will retail at between $400-$500 in proof form, making this a $2,000-a-year habit for the collector. Compare this to the US State Quarter program, where a 90% silver version of each year’s coins would only cost you $20-$40, depending on whether you bought the quarters alone, or the full year silver proof set.
  2. No detail on bundled sets, yet. It stands to reason that the US Mint will produce some form of collectible proof set of the matching gold coin and presidential dollar… but what form will be the favorite? Would you rather have a single set of all the coins for the year? Or each President, paired with their first spouse? Does it really make sense to have a manganese-brass coin for the President, and 24K solid gold for the first spouse? I’m a little afraid the US Mint is going to be over-eager here, and produce too many versions of these coins to be anything but frustrating to collectors.
  3. Trivial Pursuit, First Spouse Edition. Martha Washington, most people know. There will definitely be some fun in identifying which Presidents actually served without spouses, or which Presidents served with two. (You can find the answers to these questions already in the US Mint schedule, available on their site.) I will admit, when I think of Dolley Madison, I think of baked goods, not gold coin #4. Is anyone, beyond speculators, really going to jump at purchasing these coins?

As a collector, I guess this comes down to one question: will there be enough demand for these coins to generate a good long term return. Unlike the dollars, these will not be in general circulation. Will they be treated like bullion coins (fantastic long term returns to collectors) or like special-edition commeratives, which tend not to appreciate over time?

When I first heard about the program, I thought that it was too expensive, but there might be real long term demand for “popular” spouses – Martha Washington, Eleanor Roosevelt, Jacquiline Kennedy… Now, I’m not so sure.

Recently, I’ve been shocked by the sky-rocketing price for the new, uncirculated silver eagle from the US Mint. As a new issue in 2006, this was not a proof coin, just a new, uncirculated silver eagle in a nice case for $17 from the US Mint. The price on eBay is now over $50, largely because it turns out that this was the only way to get the “W” mint-mark coin, and relatively few people acquired it. Right now, this version is worth almost double what the much prettier, proof-version of the silver eagle is worth.

Will the pattern be the same for these coins? Will Dolley Madison end up selling poorly in 2007, resulting in a sky-rocketing price in 2015 when everyone realizes they need Dolly Madison to complete the set? Will anyone be trying to complete this set, at an aggregate cost of over $16,000 at today’s prices?

If you are a coin collector out there, I’d love to hear from you.

Update (6/19/2007): I’ve just posted a new article on the launch of the coins, today, at the US Mint website. $429.95 for the proof coin, $410.95 for the uncirculated coin. Shipping will start on July 4th. Total mintage: 40,000 coin limit per first spouse, regardless of type of coin.

Update (6/21/2007):  The first spouse coins sold out in approximately 2 hours!  Unbelievable.  Check out this post for more information, and a link to current prices on eBay.

Get a Tivo Series 3 for $510.98 AND Transfer Lifetime Service!

Two quick hot tips today on the Tivo front.

First, PVRBlog is reporting a deal at Dell that can get you a Tivo Series 3 for only $510.98.   This deal is so good it makes me wish I had HD already.

Second, PVRWire is reporting that you can, in fact, transfer your lifetime subscription from your DirecTivo to the Series 3.  This is important, since until now, people had thought the deal was only good if you transferred the lifetime subscription from a Series 2.

That makes a very sweet package for someone dying to get away from the DirecTivo morass and make a clean break with a Series 3 and Comcast HD.

Since I’m talking about Tivo, a couple other quick picks:

A merry Tivo to all, and to all a good night.

The Benefits of Misspelling on eBay & Blogs

It has been a funny couple of days for my blog.

Remember the incredible volume of page views I saw when I posted my theories on the likely ending to the new series, Battlestar Galactica?  Well, let me tell you, posting the expected title of the new Harry Potter book has spiked my blog again to one of the fastest growing.

Interestingly, I found out, after about 1,000 page views and a dozen comments, that I had gotten the title wrong.   I had posted the title as “Harry Potter and the Deathly Hollows” instead of the correct title, “Hallows”.

Apparently, however, it is a common mistake.  So common, in fact, that the original news story that I had quoted had also made it.

In fact, it has been so common that literally thousands of people have been typing “Harry Potter Hallows” into Google & Yahoo, and my blog has reaped the benefit.   No doubt, the post is popular because it reflects, through indexing, a common mistake that people make.  The competition for the misspelled version is less, and my post is right there, indexed perfectly for it.

Misspelling has to be one of the most common “predictably wrong” things that people do in the modern world of internet search.  And yet, despite years of technology and focus on the area, it still can be an incredible source of value.

On eBay, for example, it has been a long-standing trick of experienced buyers to search for common mis-spellings of their favorite items.   Since most buyers don’t search for the mis-spellings, they often find great deals from unwitting sellers who don’t realize their mistake.

Similarly, I’ve seen eBay sellers take advantage of common mis-spellings by offering listings that feature mis-spelled words in their titles!  Less competition, since most sellers spell their titles correctly.

Of course, eBay is always working to upgrade its search engine with common mis-spellings, since its goal is to make the marketplace as efficient as possible.

Still, new mis-spellings crop up all the time.  In the blogging world, it looks like I inadvertantly contributed to a new problem, and reaped an unfair reward.

I have now updated my blog to include the correct spelling and a note, but I notice that my blog article URL is permanently indexed to the wrong spelling.

Oh well.  It’s always fun to have your blog page views look like this:

Nintendo Wii? Nah. Buy me a Personal Blimp!

Just finished reading the December 25, 2006 issue of Forbes magazine, and found a real gem for my “gifts I’d like” column.

It’s a personal blimp.

Actually, besides just being extremely cool, it has a fantastic back-story too.  Daniel Nachbar, a former Bell Labs software engineer, returned to his true love of aviation, and came up with an incredible new design for a 205,000 cubic foot hot air ship that leverages a unique frame design and propellor placement.  The end result is a quiet ship that can seat two, travel at 12mph, and fold up like an umbrella when you are done (granted, a very large umbrella).

Check out his site for more details.  Estimated price?  $100K-$200K.

Here is the Forbes article (no pictures).  Here is a nice blog post at GadgetOff about the personal blimp, with some additional color & detail.

(P.S.  I’m just kidding about the Nintendo Wii.  I still want one.  Thanks.)

VC Lifestyle Myths (in Retrospect)

A great post this week from Susan Wu at Charles River Ventures on the myths surrounding the legendary lifestyle of Silicon Valley venture capitalists:

Susan Wu: VC Lifestyle Myths

I was reading along, waiting for something to resonate, when I saw this screenshot:

Ah yes, it is all coming back to me now. The VC Lifestyle.

Now, let me be upfront about something here. I love venture capital. Honestly, I do. The idea of job where you are striving to know as much as possible about technology, people, strategy, and building businesses is definitely in my sweet spot. Not only that, but I continue to be amazed at the almost accidental set of circumstances that gave birth to the modern venture capital industry in Silicon Valley, and the amazing value that has been generated because of it.

All of that being said, the reality is that the VC lifestyle is not as glamourous as you might think, and definitely has elements to be desired. Susan captures a few key elements that definitely resonated with my memories of being an Associate at a large, early-stage venture fund:

  • Tyranny of Outlook. Meetings, meetings, and more meetings. Easily 6-8 a day, mostly pitch meetings with entrepreneurs & executive teams. The day is blocked off weeks in advance, and as a result, you are constantly moving things around as things come up, meetings go over, and you are trying to meet with just one more person.
  • Miles wide, but inches deep. It’s hard to imagine being lonely when you are meeting literally 20 new people everyday, and your rolodex grows to the thousands. But a vast majority of your contacts are people you meet once. Many others you might talk to once or twice a year. Even fellow venture capitalists and entrepreneurs that you are close too might touch base on a weekly basis. The reality is that the only people you truly see every day are those in your office, and our office was small. At it’s largest, we had two partners, an associate (me), an analyst, two executive assistants, and a receptionist. That’s not a lot of people.
  • Coopetition. Without getting into the nuanced politics of venture capital, it can be draining at times. As a young person in the industry, you are at once trying to build a reputation for yourself and carve out a niche, but at the same time you need the support and assistance of others around you. In the long term, you are judged on your own success, but in the short term, you are judged on your support of the senior partner(s) you are working with.

When I think about my life at eBay, it’s amazing at how much my experience in venture capital has helped me.

First of all, my Outlook calendar still looks like that. 🙂 Maybe that has more to do with growth, drive & Silicon Valley than venture capital itself.

Second, I truly love the number of people I get to work with at eBay. Love it. Not only have I met literally thousands of great people at eBay & PayPal over the past four years, but there are hundreds of people that I now know fairly well. Leading large project initiatives and new businesses at a larger company may be more constrained in some ways than leading a startup, but the counter-balance is the number of people you get to know and work with.

Third, my orientation towards senior executives has shifted. Before venture capital, there was some degree of awe that I felt around CEOs & executives of large technology companies. While I still respect their achievements, I found that venture capital gave me more grounding around the fact that these are, in fact, just people. At eBay, this has allowed me to be more comfortable, in general, around meetings with our senior staff. I still see to this day so many bright people, with excellent ideas, get tripped up the moment they have to succinctly and convincingly present an opportunity to a senior executive.

I’m quite happy with my move back to an operational role in 2003, and I’m extremely happy with the opportunities I’ve been given to help design, launch, and build brand new sites & businesses at eBay.

But some day I’ll likely go back to venture capital. Maybe. Right time, right place, right people. But not yet.

(BTW, If you aren’t reading Susan Wu’s blog, it’s worth bookmarking. I have a special place in my heart for any venture capitalist who actually play World of Warcraft, and can actually comment intelligently on technical issues.)

Harry Potter, Book 7: Harry Potter and the Deathly Hallows (not Hollows)

Google News is citing over 383 articles about this topic already, but there is nothing wrong with posting #384.

The title for the “last” Harry Potter book has been revealed, it is: “Harry Potter and the Deathly Hallows

As of February 1st, you can now pre-order the standard version or deluxe version for delivery on July 21st:

Here is the Forbes article, which at least has well written coverage.

Rowling’s U.S. publisher, Scholastic (nasdaq: SCHL – news – people ), Inc., released a brief statement Thursday announcing the name of the world’s most anticipated children’s book, the finale to her phenomenally popular fantasy series.

No publication date or other details were offered. Rowling is still working on the book, she wrote on her Web site in an entry posted early Thursday.

“I’m now writing scenes that have been planned, in some cases, for a dozen years or even more,” she wrote. “I don’t think anyone who has not been in a similar situation can possibly know how this feels: I am alternately elated and overwrought. I both want, and don’t want, to finish this book (don’t worry, I will.)”

You’ll notice I put the word “last” in quotations. That is because, while I like the Harry Potter series very much, they are anything but original in character development and plot. As a result, I also expect J.K. Rowling to follow the well-trod path of other series writers, who claim that a given book is the “final” one of the series, only to publish some new version of the story or characters years later, after a suitable break. It might be 10 years later, but it will happen.

I’m very excited to see if Book 7 resolves itself in the same way I think it will. Book 6 definitely followed the expected path, and sets up some very well-known character models for betrayal, defeat and victory. We’ll see what happens.

Update (12/23/06): I have changed the title to “Hallows”, since that seems to be the consensus, although the search for Harry Potter and the Deathly Hollows turns up a lot of news clippings as well. Thoughts?

Update (12/26/06): See my new post on how mis-spellings can help your popularity! It seems that my blog is a big hit with the people who want it to be “hollows”.

Update (02/01/07): See my new post on the release date for Harry Potter 7: July 21, 2007. There is also a link to pre-order the book for delivery on July 21st.

eBay, Garth Brooks, and Making Money on Inefficient International Markets (Part 2)

This is an update on my experiment in the economics of selling a product that is readily available here in the US overseas using the eBay & PayPal platforms.

In Part 1, I cover the basic background of the experiment, and how I landed on my solution of selling overseas. The item in question: the special edition Garth Brooks 5 DVD set, available for $20 exclusively at Wal-Mart in the US.

eBay, Garth Brooks, and Making Money on Inefficient International Markets

As quick summary, I was able to make a net margin of over 14.1% selling these DVDs on the eBay UK website using nothing more than freely available tools from eBay, PayPal, and the United States Postal service.

The first experiment went so well, I decided to order 10 more DVD sets from Walmart.com (so much for Garth Brooks selling out this year). This time, I attempted to sell them on eBay Germany. In the process I learned quite a bit about how to squeeze more margin out of my shipping, using PayPal’s international postage printing for the first time, and the hazzards of selling into a market where you don’t speak the language.

But first, the economics. Here is my scorecard for selling 10 Garth Brooks DVD sets on eBay Germany.

Germany Sales
Quantity 10

Sales Revenue € 459.50
Average Sales Price € 45.95

Shipping Cost $12.75 2.1%

eBay Fees $86.38 14.5%
Listing Fees $0.12 0.0%
Feature Fees $23.30 3.9%
Final Value Fees $62.96 10.6%

PayPal Fees $27.67 4.7%
Transaction Fees € 16.80
Cross Border Fees € 4.60

Pounds -> Dollars $1.3261
Currency Conversion Fee 2.50%

Total $ Revenue $594.11 100.0%
Total $ Costs $456.44 76.8%

Total $ Profit $137.67 23.2%

Total $ Cost/Item $23.88
Total $ Profit/Item $13.77 22.6%

Wow.

Yes, that’s right. Though the economics were different, the overall profit margin for selling the Garth Brooks DVDs, purchased at full retail from Walmart.com, including shipping, was 22.6%. In fact, you could say that the “return on investment” for spending the$23.88 on the DVD was 57.7%.

Wow.

Let’s do a quick breakdown of what was different about the economics of selling into eBay Germany:

  • Lower Volume. Because eBay Germany had a lower sell through of the Garth Brooks DVD, I only sold 7 copies from my first fixed-price listing. As a result, I had to relist the last 3 for a second week. I should note that I listed the item in the core fixed-price format, at 45,95 Euro, with free shipping. The first listing included Featured Plus placement, but both listings included Sub-Title, Gallery, and Scheduled start time.
  • Different eBay Fee Structure. I was surprised to see that the eBay Germany fee structure in DVDs is very different than the US & UK. As you can see, the listing fee was next to nothing ($0.06 each time), but the final value fee was quite a bit larger. The overall take rate for the DVD for eBay in Germany was 14.5%, higher than the 8.8% in the UK.
  • Strong Euro = Strong Profits. At 45,95 Euro, the DVD sold for over $60 once you convert the Euro to dollars. Even with $12.75 USPS Global Priority Mail shipping, that leaves a lot of profit left over for the seller.
  • Optimizing Shipping is Worth It. When I sold to the UK, it cost me $15.75 to ship the package. Why? Because I used the large USPS Global Priority Mail boxes, which made the package 1 pound, 10 oz. By shifting to a smaller box, I was able to get the package down to 1 pound, 8 0z. which was $3 cheaper. That’s over 10% profit margin right there!

Selling into Germany created new challenges. The first issue was how to create an item description in German. I tried two translation services: babelfish.altavista.com and translate.google.com. Neither did a great job, and both created weird, non-German characters in the result.

I cheated a little here – a friend of mine from the eBay Germany office was in town, and I asked him to “fix up” the auto-translation of my item description. In the end, I’m not sure it mattered. What I noticed was that all of my German buyers spoke English… not surprising in retrospect since they listen to Garth Brooks. 🙂 At the time, however, I thought it was something I needed to sell in Germany.

The second challenge was creating the listing. I found using the eBay Sell Your Item form in Germany difficult, largely because it was in German! I consider myself an expert in the form (considering that I managed the product team responsible for it for about six months). Still, I was surprised how long it took me to complete. I don’t know why, but error messages in German were fairly disturbing to me.

The last challenge was answering questions in German from buyers and potential buyers. I think I made this harder than it needed to be. I was so paranoid about not speaking German, for the first few days I actually took every email, translated it on Babelfish, and read it. I then wrote a response, translated it, and sent it back. Finally, in one email, I just sent back the response in English. Ironically, it turned out the buyers didn’t realize I was from the US. Once I wrote to them in English, they did the same, and the problem went away. But it was stressful while it lasted, particularly when one buyer was asking about bank payment, which is popular in Germany. I was really worried I’d end up with negative feedback for a few seconds there.

To close out my lessons here, let me give kudos to two awesome products:

  • PayPal. The ability of PayPal to allow me to seamlessly collect money in another currency, and then either maintain that currency balance or translate it to dollars is just amazing. A miracle of the modern Internet. I don’t know how an individual could previously sell overseas with such ease, but I consider the 7.2% take rate of PayPal cheap for the priviledge.
  • eBay/PayPal International Postage Printing. It took me a while to get over my fear of change here, but now that I’ve done it I will never look back. These packages weighed over one pound, which normally means you have to go to the post office to send them. Not anymore. I was able to print the postage, stick it in the clear USPS envelope, stick that on the package, and leave it on my porch for pickup. It lets you print the postage and the customs form. One small goof – I forgot to sign it one time. But my mailman brought it back the next day, I signed it, and it was off to Germany.

I’m still waiting for feedback from my last few sales, but now I’m glad to say I have some cool German feedback on eBay that I don’t really understand. But it’s positive, and that’s what counts.

For eBay sellers out there, both individuals and professionals, you should really consider opening your listings up to other countries, and potentially even listing them on those country sites. eBay & PayPal give you all the tools necessary, and as the above experiment shows, the difference can be significant.

In fact, the numbers here are so compelling, I would wager that eBay sellers who master the ability to sell internationally will have a fundamental economic advantage over those who don’t. More profit for the same inventory is always a winner in retail.

Milton Friedman Panel Video at University of Chicago GSB

Short post, but a great pointer to a video of a panel hosted at the University of Chicago Graduate School of Business (GSB) after the death of Milton Friedman.

It’s a full panel, and not quick, but worth watching if you are interested in either economics or Milton Friedman.   I don’t recommend it if phrases like “consumption functions” or “monetary policy” roll your eyes.

Milton Friedman Panel: 11-30-2006 at Chicago GSB

Do The Math: iTunes Sales Are Not Collapsing

There has been a lot of press today about a recent Forrester report that states that sales of digital music from the Apple iTunes Store has dropped off dramatically this year. See this coverage here for example.

Apple Computer’s iTunes music store suffered a 65 percent slump in sales during the first six months of the year, reversing almost two years of gains, according to a Forrester Research report.

The number of iTunes transactions declined 58 percent between January and June of this year, while transaction size fell 17 percent, said Forrester, a market research firm based in Cambridge, Massachusetts.

Well, not quite. This article from the New York Times is a little more clear on what the Forrester research stated:

Apple’s ubiquitous iPod and its iTunes music store were intended to be a kind of perpetual motion machine, with iPods helping to sell iTunes and iTunes helping to sell iPods.

Although both are successful, the relationship may not have worked out exactly as expected. At any given point, the cumulative number of songs sold by the iTunes store has generally been about 20 times the cumulative number of iPods sold, according to Forrester Research, the technology consulting firm. That ratio has recently crept up to roughly 22 to 1, as 1.5 billion songs have been sold. The figures were compiled from public statements by Apple.

OK. Well, that’s interesting, but less troubling. Something to be concerned about, for sure, if it means what they say it means.

But this is what I love about the web. No sooner than a very expensive analyst from Forrester publishes this research than another site immediately rips said analysis to shreds.

From Blackfriars’ Marketing blog:

The graph above looks at cumulative iPod and iTunes sales on a logarithmic scale. Now to review a little high school math (yes, high school was a long time ago here as well), when you plot things on a logarithmic scale, exponential growth shows up as a straight line. A gradually tailing off curve generally still implies substantial growth — iTunes sold a billion songs just in the past 12 months. So the first takeaway from the above curves should be that both the iTunes and iPod sales are growing dramatically.

You can read the full analysis, but the short story is that the growth rate is slowing, but sales are still increasing markedly. In fact, the research doesn’t account for the basic fact that many iPod sales go to owners of previous iPods, thus the number of songs per iPod may in fact still be increasing. It also doesn’t account for the new streams of TV & Movie revenue.

Still, slower growth is slower growth, and it may point to the maturation of the iPod business. When you are selling 14 millions MP3 players a quarter, you might hit the limits of large numbers. Let’s remember, Microsoft states that selling 1 million Zunes by next summer is how they define success.