June 13, 2001

1:13 PM

Matt H. and MeFi in New York Times(may require free subscription to access) -- an Andy Wang piece about using the Amazon Honor System to keep websites like his afloat. What I want to know: why does Matt wants to hurl that laptop into the bay?
posted by BT (12 comments total)

See here.
posted by Big Fat Tycoon at 1:37 PM on June 13, 2001

whoops. my bad. Searched mefi and didn't even think about metatalk.
posted by BT at 1:40 PM on June 13, 2001

(We'll be fixing that. Ha!)
posted by dhartung at 3:31 PM on June 13, 2001

i dont read metatalk. thank you BT.
posted by o2b at 5:13 PM on June 13, 2001

I concur.
posted by isildur at 9:21 PM on June 13, 2001

(See, Matt? Crossposting ...)
posted by dhartung at 12:55 AM on June 14, 2001

Um... why the Amazon Honor System? You can do the same thing with Paypal and save a bunch on the commissions, if I am not mistaken...
posted by insomnia_lj at 5:11 AM on June 14, 2001

Amazon does have a slightly larger user base, thus making it easier for people to donate....
posted by tallman at 5:45 AM on June 14, 2001

While regular professional credit card transaction fees hover around 2 or 3 percent, Amazon pulls a whopping 15% right off the top of every donation, plus a .15 per transaction fee. It's really not worth it.
posted by crunchland at 7:02 AM on June 14, 2001

Amazon's name and the ease of use of their system, however, may cause people to contribute enough more to make up for that 15%.

It's like with credit cards. When they were first introduced, merchants were reluctant to give the bank even a 2% cut of every transaction. "People will buy more when it's easier, and credit cards make it easier," said the banks. And they were right. Today, of course, a store pretty much has to take credit cards -- even Sears, who resisted taking Mastercard and Visa for many years (even to the extent of launching "the other white meat," Discover) succumbed, and Hill's, a discount department store chain that actually used the line "No credit cards! Use layaway instead!" in their advertising, went out of business.

If Amazon lets you come out money ahead, if it gets a few contributors who otherwise wouldn't have donated, then it may well justify the extra cost, just as a literary agent can justify his 15% fee by getting you a better deal with a publisher than you'd negotiate on your own.
posted by kindall at 8:06 AM on June 14, 2001

I'm not sure that Amazon really does have more users than paypal, though. Paypal is still the standard for online auctioning, for instance, and it is really quite easy to use. It's also a global payment method, which is a good thing.

It would be nice to have stats on all this, though. I half expect Jacob Nielsen to pull something out of his hat...
posted by markkraft at 10:51 AM on June 14, 2001

From the article:

Of course, there is a much larger base of potential online philanthropists at Amazon, which has about 32 million registered users, compared with about seven million at PayPal.

No Jakob necessary (though he did discuss it back in February)... :)
posted by web-goddess at 11:19 AM on June 14, 2001