Bigstep.com New Products and Pricing Changes

Bigstep.com has had a tough year, working hard to convert from a free to a fee model. But as of now, according to Vice President of Sales and Marketing Josh Jacob, they have been able to convert 10,000 small businesses to a paying model. Bravo! This is good for the industry since it puts Bigstep on a much firmer financial basis, enables them to serve thousands of merchants in the future, and strengthens them to attract additional funding, as well.

The conversion opportunity was to move from free to one of three hosting service options, each with a successive price level and increased benefits:

• Bigstep Basic, $9.95/month ($99.50/year)
• Bigstep Professional, $24.95/month ($249.50/year)
• Bigstep Advantage, $34.95/month ($349.50/year)

The HTML Builder feature is included in both the Professional and Advantage hosting packages. It allows merchants to FTP entire websites into the Bigstep hosting environment where they can modify and customize Bigstep template pages, and link to these pages using Bigstep's navigation system. This allows a great deal of flexibility in creating exactly the look and feel merchants want. The Bigstep Basic hosting service retains the Bigstep logo on the merchant's site and doesn't offer the HTML Builder features.

The Advantages of Grandfathering

Since these 10,000 small businesses had a catalog and sales ability under the free model, they were "grandfathered" in -- that is, they don't have additional catalog fees -- so long as they maintain their service. I think they have a pretty sweet deal.

The $24.95 per month fee for the CardService International merchant account is in addition, of course. But it includes the LinkPoint Payment Gateway and there is no application fee. (Note well! There is a $300 cancellation fee if you drop the merchant account at any times other than the six-month renewal windows.) Other merchant account fees include a low discount fee of 2.35% for most cards, a per transaction fee of 20¢, and a 15¢ per day batch header fee. This is one of the best merchant account/payment gateway combinations that I've seen. Be aware that this is unlike CardService International's normal application fees and incredible policy of allowing small business people to sign a non-cancelable lease for what is essentially a service -- not a hard product than can be returned for credit. I've heard too many horror stories from small business people about their experiences with such leases! But Bigstep's merchant account deal is the exception; it is excellent! (US merchants only.)

This means that for Bigstep merchants who have been grandfathered in, they can have an effective sales site and merchant account for as low as $34.90 per month. A great price! New merchants must pay $44.85 for the same features -- still very attractive. Here's how this low-cost package prices out:

New Features

Bigstep has just announced two new feature packages:

Auction Manager. For only $9.95 a merchant can use the Bigstep's system to post items for auction and then monitor sales on eBay, Yahoo, and/or Amazon auction sites. (The auction sites' fees are extra.) Once a sale is made on the auction site, buyers are directed to the merchant's Bigstep order form to make a payment. This enables the merchant to track order management on Bigstep's system. If you're a Bigstep merchant and want to expand your sales to auctions, this sounds like a time-saving management system.

Catalog Manager. This constitutes several improvements over the original Bigstep catalog system. Three improvements stand out:

• Product Options. The original basic catalog program doesn't offer a good system to handle options. Catalog Manager now allows drop-down menus for multiple options for each product, such as size (S, M, L, XL, XXL) and color (red, green, blue, white) for T-shirts. Unlike some of Bigstep's competitors, Catalog Manager doesn't allow these different options to change the price of the item.
• Clickable Thumbnails. Product pictures can now have both a small thumbnail size for use in sectional menu pages, and the regular size for product pages. Thumbnails make it easy for customers to select the product pages they're interested in.
• Bulk Upload. This feature frees merchants from having to build their online stores exclusively through a web-interface -- a slow and frustrating task on any brand of online store. Now merchants can build their product files offline in a database or spreadsheet and upload them to the store, making for a much more efficient system. Small merchants with a dozen products won't notice much difference, but shopowners with dozens and hundreds of products can hardly survive without bulk upload.

To take advantage of Catalog Manager's features, merchants need to ante up $19.95 per month for up to 50 items and $39.95 per month for up to 1,000 items.

Upsell for Merchants

Bigstep is working hard to upsell new and existing merchants its upgraded services. These services are a bit confusing, since they read like an al a carte menu at a Chinese restaurant. For e-commerce, pick one from column A, one from column B, and column C for a merchant account.

It is theoretically possible to sell products using PayPal, mailed-in checks, or desktop credit card programs (such as PC Authorize) without a merchant account/payment gateway combination. However, I see this as false economy for all except, perhaps, foreign merchants. I don't advise it.

Bigstep's lowest cost store (including a merchant account) is $44.85 per month for up to 25 products, while Bigstep's best features for a store of 1,000 products cost $99.85. Another $9.95 gets you Auction Manager. Pretty good.

My Assessment

Auction Manager seems like a great tool for merchants who sell at auctions. But Bigstep's toolset in Catalog Manager -- while a substantial improvement over their original catalog system -- still doesn't measure up in features and flexibility to the competition. There's quite a way to go to catch up. Price-wise, however, Bigstep offers merchants good value for a great price. It seems to me, even with the price increases, that Bigstep is still the e-commerce store low price leader.