DevCon Session: Making money with your eBay application

In this morning's session, Cian Weeresinghe and Jonathan Gabbai discussed how you can make money with your eBay application. This was a down-to-earth investigation of the possibilities of application monetization, illustrated with wide-ranging examples and organized around these utilitarian themes:

• What kind of ideas work
• Income models
• Developing with money in mind
• Marketing and distributing your application
• Measuring the success of your application

Ideas

Your idea might be a mobile or desktop application, a widget, a data application, a social network application, or something newer, or older. But if you're planning to monetize it, it should either address a user pain-point, or open up a new business opportunity.

Or the application can simply be fun to use. The Facebook application StyleSlam lets you build a virtual wardrobe for a character, and links the virtual wardrobe to real items for sale on eBay.

The FatFingers application cleverly lets your arbitrage your niche knowledge to find misspelled listings, and helps you bid on hidden items more conventional searchers are unlikely to find. Their tagline: "Other people's typos save you money." (English teachers everywhere, please take note: this is a teachable moment.)

Income models

This part of the presentation looked at the pros and cons of different income models: ad revenue, freeware that leads to premium subscriptions, eBay affiliate and partnership programs, straight-up software sales, and the eBay Partner Network.

Some things to think about: should subscriptions be one-off or ongoing? For premium subscriptions: which features of your application should be premium? Onsite advertising is relatively low-risk, but is it the best way for your application to harvest dollars? Affiliate programs are nicely transparent, and can be very lucrative, but only pay when your users transact.

A couple of models to look at: Vzaar embeds videos in your eBay ad, with a premium for special privileges. BuildANicheStore sells a template for building targeted eBay stores.

Development

You definitely want to use the eBay application programmer interfaces (APIs) to develop your eBay applications. If you're a beginning programmer, start with the tutorials for the Shopping API. The Shopping API can automatically wrap your partner tracking code and ID in any call your application makes. So when your users transact, you will be paid.

For more full-featured applications, leverage the more complex functionality of the Trading API.

An application that automatically displays events on the eBay site might use the Client Alerts API in combination with the Shopping API.

Marketing and distribution

How are people going to find out about your application? What will get them to your site?

You can optimize your site for search engines, or upload your application to freeware download sites. You can pay Google for better search results, use banner ads, exchange links, advertise.

Once the users arrive at your site, they should find clear choices: is it subscription, eBay affiliation, buying the application, or using your free download until they upgrade to premium?

Measuring success

Remember, no matter how much fun you're having developing your applications, you'll want to keep track of how things are going, what's working, and what's not working. Measure percentages of return rates, cancellation rates, transaction percentages, and advertising revenue from your onsite ads. 

IRibbit

A guest developer, Chuck Hudson of Aduci, presented a third-party eBay application that is getting some traction. IRibbit uses the IPhone with eBay's PlaceOffer API.  It shows its users watchlists, bids placed, bids won. It also pays off for the IRibbit developer, in a monthly check from eBay.

Advice from the IRibbit story: Get your application out there fast, with minimal functionality if necessary, but get the first-to-market advantage. The initial development of IRibbit was two weeks, one engineer.

The business model is commission-based, with no fee to the user. And that means that IRibbit doesn't have have much business data to keep track of. If someone downloads and uses the application, IRibbit is paid per transaction.

Promotion for IRibbit was done through blogs, the iPhone applications downloads directory, the eBay Solutions Directory, catching the eye of a ZDNet writer, and entering and winning contests.

Using PlaceOffer API in production required an eBay Application ID, eBay DTS approval of your application (you have to pay for a couple of hours of DTS time), and authorization, and application approval from the eBay Partner Network.

Lessons learned

• Work with the eBay Developer Program team.
• Start the eBay certification process early.
• Provide strong support by formatting your data well for shipping, communication retries, and error handling.
• Get to market early, even with a thin app, and just keep improving it.
• Leverage eBay branding through eBay Partner Network tools: a certified compatible application can use eBay Compatible Application, Member, or Partner Network logos. These help.