A fundamental truth of the Web is that it is easy to publish but hard to monetize. Literally millions of publishers post content on a daily basis yet few reap enough cash to justify the investment in time and energy. Even highly popular bloggers with hundreds of thousands of loyal readers struggle to make the math work. Small manufacturers that set up their own online stores have little hope of drawing large enough audiences to make ends meet. And consumers for the most part struggle to know what to buy and from whom – especially when it comes to specialty goods.
Enter OpenSky, which bounded out of beta last week vowing to change all this. I was aware of OpenSky through evangelist Ted Rubin but didn’t really get the concept until I sat down with the principals and one of their early beta testers for a couple of hours at their opening soiree. I now get it. And while OpenSky benefits publishers, their readers, and small-scale manufacturers with a robust Web platform, I think the idea boils down to this: OpenSky is a scalable micro-commerce utility that enables publishers of all sizes to actually make money on the Web.
That said, the best way to understand OpenSky is to look at it from the perspective of each of the constituents; publishers, manufacturers, and consumers. In the process, you should come to understand why I think OpenSky is indeed a game changer, and will bring profits to publishers, markets to manufacturers and peace of mind to consumers faster than you can say, ka-ching.
Sharing, Not Schilling: The Bloggers Perspective
Marta Wohrle, a veteran of the publishing industry, started her blog, TruthInAging.com, in 2008. According the site, “Truth In Aging writes honest, thorough and, we hope, fun reviews of anti-aging cosmetic, makeup and hair products.” Reaching out to friends and family, Marta was able to build a nice following that doubled in 2010 thanks to a strong SEO program. But Marta still had a problem. She noted, “Even with Google AdSense delivering an average $7-8cpm and my Amazon affiliate program delivering 7% on referred sales, I wasn’t making enough to justify my time.”
With a sizable mailing list and over 45,000 visitors a month (according to Compete.com), Marta was an early beta tester of OpenSky, having already been searching for a way to increase her Web revenue. Noted Marta, “At first I was a little concerned that my readers might be offended if I started selling products I reviewed right from my site.” Creating a small group of “VIP customers” to test with, Marta found that only 2 out of 400 suggested she might be “going to far” while the others were overwhelmingly positive. Relieved, Marta pressed forward, excited at the prospects of gaining half the profit on each product sold, the other half going to OpenSky.
Marta explained that, “By selling the products I have been reviewing and recommending directly on my site, I make it easier for my readers to buy them and at least double my profit margin compared to Amazon in the process. My readers trust me and I don’t dare break that trust by recommending anything I don’t believe in,” she added, identifying one of the lynchpins of OpenSky’s value proposition. Successful publishers like Marta depend on building and maintaining trust with their readers–selling inferior products just to make a buck would jeopardize the whole enterprise.
Finding New Audiences: The Boutique Manufacturer
One of the products Marta recommends and sells on her blog is a $27 organic eye cream from a four-year-old husband/wife company called Nurture My Body. Traffic to NurtureMyBody.com according to Compete.com is well below 2,000 per month and more than twenty times less than Marta’s site. For Nurture My Body, any sales they get from Marta’s site is like manna from heaven. It cost them nothing to list their products on ShopOpenSky.com and Marta’s recommendation translates into high sales and low return rates.
Founder of OpenSky, John Caplan, explained that having a low return rate is another of the lynchpins to his company’s success. Noted Caplan, “During the beta, about 1% of products sold through OpenSky were returned which was phenomenal, especially when compared to 19% for Amazon and 40% for Zappos.” Caplan’s doesn’t necessarily expect their rates to stay that low with 6% returns built into the plan, but at that same time, he’s not surprised. Caplan observed, “Bloggers like Marta have built up extraordinary trust, so her recommendation simply carries the day.”
A Better Shopping Experience: The Consumer Wins Too
When one of Marta’s readers sees a product she wants, the buying process begins with a simple click on a link. This easy shopping experience is the third lynchpin for OpenSky according to co-founder Kevin Ambrosini, whose resume includes highly successful e-retailer, Gilt Groupe. Noted Ambrosini, “The shopping cart sits on the publisher’s site but we handle all the hard stuff like credit card verification and order processing.”
Well aware of the importance of a smooth buying experience, OpenSky also takes care of the customer service issues related to online ordering. Added Ambrosini, “If shipping takes too long or our 800# staff can’t resolve issues right away, the whole thing falls apart, so our goal is to provide the best customer service anywhere.”
One of the requirements for suppliers to put their goods on the OpenSky platform is that they can “drop ship” products anywhere in the U.S. Ultimately, OpenSky hopes to publish average shipping times so buyers know what to expect and sellers are incented to expedite their processes.
Win, Win, Win, or Too Good to Be True?
Entrepreneurs are inherently optimistic and the team at OpenSky is no different. Their energy and enthusiasm is infectious and clearly, I am now a believer. Time will tell if OpenSky indeed can change the math of Web publishing. One thing is for certain, unlike Facebook and Twitter, OpenSky knows from the start how its bread will be buttered, with publishers, manufacturers and consumers all winning. (This article first appeared on FastCompany.com)