

Ztail Launches Innovative eBay Guarantee - corgan1003
http://www.techcrunch.com/2009/04/08/ztail-launches-innovative-ebay-guarantee-for-worry-free-shopping/

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ShabbyDoo
Just after reading the latest Steve Yegge rant ([http://steve-
yegge.blogspot.com/2009/04/have-you-ever-legali...](http://steve-
yegge.blogspot.com/2009/04/have-you-ever-legalized-marijuana.html)), I read
this article. Steve explores the hidden complexities of seemingly simple
projects.

What's hidden in ztail?

Insurance companies hate adverse selection bias and have actuaries work to
control its effects. Won't those who beat up their stuff be most interested in
a "put option" on their investment? So, ztail must control for this somehow.
They can stipulate that the item must be in like-new condition, but that would
make the stroller customer mentioned in the article unlikely to place value in
the ztail guarantee. It's hard to push kids around in a stroller for a year
without some damage occurring. So, ztail is stuck between a rock and a hard
place. They could stipulate "normal" use, but how many scratches should an
iPhone have after a year?

Do consumers really want to purchase a put option on their stuff? If
something's cheap enough, I don't worry about the manufacturer's warranty
claims -- I "self insure" by taking on the risk myself. Options are insurance.
We know that that $900 stroller (hopefully a quad model for that price!) will
likely have some value two years from now. And, most mommies (at least my
wife) take a lot of time when shopping for a stroller, so they know
approximate resale values by brand, etc. So, one could easily calculate the
likely value of the option at the date of expiration. The option doesn't seem
like its worth that much given that most items aren't likely to be worth
nothing in a year or two.

As another poster pointed out, the whole process is complicated -- both in
terms of comprehension and execution. Is it worth incurring this fixed cost to
purchase an option that will be a pain to execute?

I have a $2500 deductible on my home insurance for two reasons: (1) it makes
the insurance cost less (partially by proving to the insurance company that
you don't think you're likely to incur a loss!) and (2) because it's a PIA to
file a claim for a gutter bent by a fallen tree branch.

I don't get this much like I don't get BillMeLater.

------
vizard
Article title on TC : "Ztail Launches Innovative eBay Guarantee For Worry-Free
Shopping"

(Why was this title not retained when submitting to HN?)

------
calambrac
How do they figure the guaranteed price? Is it based on historical auction
data? If so, won't the increased volume of these items drive down the actual
sale price at auction? Does their model take that into account?

~~~
jonknee
eBay has a program that lets you see historical selling prices for goods, so
I'm guessing that's where they started.

Who knows what kind of cash reserve they're working with though, I wouldn't
trust them for anything more than a vague estimate of what products are
selling for in second hand markets. And that much is free!

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jonknee
What a terrible headline, Ztail doesn't even sell any merchandise. They are no
competition to Amazon. In fact, they may even add Amazon as one of the
merchants you can purchase through.

Ztail is selling a put option on retail products (well sort of, with eBay
being involved too), interesting but not revolutionary. Considering all the
bail outs we're having to do for firms that wrote tons of paper they couldn't
back, who knows if Ztail will even be around next year when you want your $50.

It's sad that the HN headline is less reactionary than TechCrunch.

~~~
corgan1003
I guess I have always looked at Amazon as a portal to buy other merchants'
merchandise. ZTail is doing that.

Do you think it is in ZTail's best interest to add Amazon? I read that Amazon
does not pay for referrals anymore.

The truth is, I posted the article right after I read the TC article, and was
super hyped about it. I thought to myself: "For once, I might actually buy
some stuff from ZTail as opposed to Amazon" (Big deal for me). Looking back, I
agree that this idea is certainly interesting but not revolutionary.

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kjw
maybe I just don't get it, but I don't think this site will be stealing any of
Amazon's thunder. while Ztail's concept is interesting, it's way too
complicated for the average consumer.

~~~
jrockway
I agree. Way too much effort.

If they can really guarantee these prices, they should just let you return the
item and get the guaranteed amount of money back.

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newy
If you can't explain an idea in a sentence or two it's general appeal is
likely quite limited. The basic premise is sound, but why can't I just buy
something from Ztail and then have an option to return it a year later
directly to them for a fixed price (like Chegg for textbooks)? I don't want to
deal with eBaying it myself. There are way too many intermediaries involved
for me to feel comfortable as a consumer. Are they planning on making all the
affiliate revenue first and then figuring out how to handle the refunds a year
down the line?

I like the example in the TC article of the $900 stroller. Forget the
guaranteed return, just buy a cheaper stroller!

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jrockway
So, this E-Commerce site will "steal some of Amazon's thunder" by linking
people to products on Amazon?

Interesting analysis.

~~~
corgan1003
Where does the article or the ZTail site show indication of linking to
Amazon's products?

I have also read that Amazon does pay for referrals to buy goods anymore.

