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Russian Ease Of Use, But At A Heck Of A Price

Written by Frank Hayes
March 14th, 2011

Remember when online commerce was going to cut out the middleman? Those days are long gone. On Tuesday (March 15) a Chicago-based shopping portal called BayRu, which allows Russian customers to buy from U.S. E-tailers, cut a deal to let shoppers pay for those U.S. goods in local currency at 500,000 locations throughout Russia using cash, credit cards, mobile payments and Western Union. The system works much like the Singaporean shopping portal that Google mistook for an Overstock.com link farm last month: Customers pick out goods online, and BayRu handles shipping and customs—for a fee.

How much does the middleman take? Items from three dozen E-tailers that include Macy’s, Target, Wal-Mart, Best Buy, Gap, Tiffany and ToysRUs—oh, and Overstock.com, too—require manual intervention for pricing, so the markup varies. A $7.99 paperback from Amazon, for example, costs a Russian customer the equivalent of a modest $9.10. But a $725 iPad 2 (an eBay “Buy it now” item) is marked up to a breathtaking $1,025. That’s money major retailers will keep leaving on the table until they figure out how to handle global customers—and global payments.

Posted in E-Commerce, Payment Systems, Supply Chain
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