Instead of raising capital by the traditional methods, he has chosen to license his project, and let local partners offer the service in their state.

His goal is to have all fifty operators both running and promoting the service on a local level, using both online and offline methods.

With so many people promoting the service that have skin in the game, there’s a very good chance it will gain traction and become successful.

My friend is still looking for a few licensee’s, so if the thought of owning a media trading website appeals to you? It’s not to let to get in.

The link will bring you to the licensee offer page, or if you do a Google search on “Mailbag Media partners program” you can find it easily.

The cost to get in is very low, and you will be able to live the dream of working from home.

http://www.swapster.com

On another comment, I would like to see Swaptree add more filtering and sorting capabilities to the items that you can potentially receive.

Spacebas

Why would I send you my stuff to receive fake currency (points or Peerbux)? It’s a flawed model to create liquidity in a marketplace.

At least with Swaptree I can see what I can get in real time and make the decision…it’s mostly a shopping experience… except it’s free.

The other argument is that it’s more efficient then using real currency. If I no longer want a CD (or book or DVD or videogame), yes, I COULD sell them on eBay, but the transaction cost (including my time which I really value) aren’t worth the hassle for just a few dollars. And those few dollars I’d receive in discretionary income I’d probably just turn around and buy more CDs, Books, etc.

But with Swaptree I can trade those items and get other items I want in return, with very little overhead. In other words, the marginal utility of selling my used stuff for cash isn’t that great (I’d rather keep the used stuff than get $3 for them and have to ship them to someone). But exchanging those items for different used items at no cost provides me a lot more utility than the cash I could get for them.

I’d readily trade a used book I’ve read for another used book I haven’t yet read for free (or CD, etc). This creates a high exchange of value for me. But I’m less interested in selling you the used book for $5 because I can’t turn easily turn that $5 into another used book (without hunting down a seller that has a book that I want).

I think Swaptree creates a more efficient marketplace for used media. As more and more people use the service, it will become more efficient. For the types of items traded (media), it’s more efficient than eBay.

Jay

All was great. And then they shut down. And i got nothing. Zero. Totally burned. Trading is great but, points stink. Never again.

Beware of any system that says – give us this today and will give you something tomorrow, as someday that tomorrow never comes.

Thing is you only got points when someone said they received your item, and only go points deducted when you indicated you received the item. See the problem?

People are incentivized to lie that they never got it, so they could keep their points, and now the person who truly sent it is not given any points. Worse sometimes the bad traders are given free points (at which point the value of these points is totally undermined, pointless). Like the US lending markets, the whole system screetches to a halt.

Its funny there are even sites now that let you trade your points from one stupid point site, for another.

If i have to deal with points – id rather deal with money.

You’re correct. I’m not sure but I can’t find where paperbackswap.com has received any meaningful VC funding and as such they can hang around and provide a niche service for those who it appeals to and make a nice business for its founders and significant others. If Peerflix and LaLa are any indication they’ll have ~18 months before they join them.

Note: I just read an article on their third round VC funding raise (http://www.mass...ird-round-.html) and frankly I’m shocked. Yes, our company’s offering can be looked as competitive and thus we have a potential interest in minimizing them as such, but just read the article…

To highlight…

The company was started in June 2004 (not first launched a little over a year ago as reported here – respectfully),
Raised a total of $2.3M by the end of 2006,
Now in 2008 it says (per Techcrunch above) its conducted ~100,000 in little over a year,
Now in 2008 (per the article) it says it gets 1000 new registered users per day and the website claims only ~450 members complete a trades on daily basis. Which means very few people actually conduct trades based on its installed base over the last many years and only 450 members actually conducting trades today. And why if only 450 members are conducting trades daily after 4 years based on Google Adwords and shipping spread margin revenue model of less than $1 per trade does someone (Safeguard Scientifics) pony up $3.6M.

For discussion purposes, let’s just say that ~15,000 (450/day times 30 days) members trade monthly for the last 4 years (which is impossible since there’s been a long slow ramp up to 450 trades/day over the last 4 years) this equates to 640,000 trades since they’ve started and they received $2.3M dollars or essentially the initial investors paid or lost $3-$4 for each trade (where in reality its probably closer to 2 -3 times this amount, based on revenue from Google Adwords and the margin they seem to get on shipping which may be around $1 – when its used).

So in summary, from this slightly biased individual’s perspective, like all significantly funded or VC funded trade sites this doesn’t make any sense. 10K-15K trades per month at maybe a $1/trade is a nice salary for a founder or two, but doesn’t provide anything for VCs after 4 years of operation. And only doing ~15K trades per month after 4 years doesn’t speak at all well for word of month or the ultimate opportunity that this model presents. And like all previous trade sites (especially funded ones) this one is destined to follow the rest.

Lastly, Michael with all of this available information what is your response. You’re obviously a sharp and successful guy, but (respectfully) you may not want to write a review at 3am in the morning . Again, respectfully.

Steve

Chris, your comment misses the plot on several points, mostly because you are trading things you no longer want (otherwise you’d keep them) and the eBay trust model will prohibit bad traders from perpetuating their frauds. At least with Swaptree, you aren’t out any cash (you’ve just given away something you didn’t want). And the bad traders/swappers won’t continue, because I’m fairly sure Swaptree will simply ban their shipping address. And besides, why would a fraudster choose to rip people off for their used CDs or books?

Net-net, I’m a fan, and have done over 100 trades on the site (with no frauds incidentally).

Jay

Maybe you should ask SwapTree what they do when a member doesn’t receive the item they were promised to receive??? So they send what they agreed to send but they don’t receive what they should have received for the trade in return.

The answer? Nothing! The person who sent their item as instructed is left with nothing in return and they lose the item they sent off. SwapTree’s only response to a bad trade is better luck next time.

That’s why SwapTrees system of direct trades does not work because sadly their are dishonest people and the honest traders get left with nothing and lose the item they sent when a trade goes bad.

SwapTree has received amazing coverage here at TechCrunch as well as other media coverage that millions of dollars and 3 rounds of funding can help make happen.

But no matter how many users you send there they will not stick once they find out what happens when a trade goes bad and they are told “better luck next time!”

It seems as though the businesses w/o VC are forced to figure things out along the way…or vanish. A good example is paperbackswap.com. They just keep sticking around (obviously covering costs somehow), focusing on the customers by adding functionality, and their member base keeps growing and growing. Up to 2.5million books available for swapping as of today. The more books available the more chances of people finding something interested and become interested…

There is actually already an exchange platform for DVDs, CDs, books and video games in Switzerland, which is quite successful and exists since more than two years ( http://exsila.ch ). Apparently they where doing last January about 1000 exchanges a day (and that for a small country like Switzerland, 7 mio people) with a quite rapid growth (I was unable to get more numbers).

They started their service in Germany a couple of months ago. I think it has a huge potential.

Cheers,

Is there a copy editor in the house?

I’m a bit surprised by your positive comments on Swaptree. Both Peerflix and LaLa have recently (last year or so) failed on trading and they were funded more than Swaptree. Yes, Swaptree has a neat mechanism to allow multi-way trades, but its still trades and by its nature inefficient that’s why they invented currency. All VC funded trade sites have failed, because IMO they can’t produce VC returns on this model.

Also 100, 000 trades is not a lot in over a year. Our company provides “Buyback” sites for online sellers/retailers to purchase consumers “no longer wanted” CDs, DVDs and Video Games for cash. Our consumers sell on average about 36 units in a trade and receive $125 per order – which can be used obviously for more media or pay for the ever increasing tank of gas. Our clients collectively have purchased over 250K units in the past year and the number of units being transacted from consumers is increasing 10% per month. There will always be a segment that will want to trade but its not a successfully VC funded model. We believe that consumers are better served by selling in bulk for cash than waiting around to trade a single item, but we are biased in this area.

Your dead on. Most trade sites have failed and the most recent example is Peerflix. I believe that all tradesites fail if they’re VC funded. It is impossible to produce VC returns for this business model. Trading is ineffecient, thats why currency was invented to faciliate trades of items of unequal value. That’s the reason one sees the increased activity of “buyback” sites which provides consumers a mechanism to sell their no longer wante items for cash immediately and simply, versus the challenges associated with online auctions, marketplaces, classifieds and trade sites.

I’m not sure how this fits in but it seems to me this model is very poor to earn money and is fast becoming deadpool