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Shop the US without leaving your chair
Posted By David Shamah On October 14, 2010 @ 12:00 am In | No Comments
Sears, Macy’s and Bloomingdales are all on board with FiftyOne, the Israeli company that finally opened up American merchandise to the rest of the world, online.
While US culture, brands and entertainment have been exported to the four corners of the world, until recently, American retailers have had a hard time exporting their wares – despite the longing by tens of millions of people to shop the websites of American retail legends like Bloomingdales, Macy’s, the Gap, and many others.
Now, with technology developed in Israel, fans of the latest US fashions across the globe can buy whatever they want from their favorite online stores, via a site administered by Israeli company FiftyOne.
Very few American companies have sold over the Internet to retail customers outside the country, not because they didn’t want to, explains Mike DeSimone, CEO of FiftyOne, but because from a logistical/security standpoint it just wasn’t feasible. Ensuring secure credit card transactions, converting between currencies, complying with import laws and paying duties were all a nightmare for retailers who were already working with razor-thin profit margins and didn’t have the resources to develop an export department.
A win-win solution
Following the 2008 recession retailers were hit hard as consumers in the US began to do without. “At that point, retailers realized that they needed to respond to the challenging sales environment if they wanted to continue to grow, and we were able to offer our services to them, to the extent that now there are many more US retailers selling abroad than there were just a few years ago,” DeSimone tells ISRAEL21c.
Indeed, a glance at FiftyOne’s customer page is like taking a stroll through a virtual US mall, taking in names familiar to many shoppers like Sears, PacSun, Brookstone Johnston and Murphy, along with big web retailers like Overstock.com, Drugstore.com, Shoes.com, and many more.
Users in most countries outside the US (including Israel) can register on most sites with their home address and country of residence, and receive a display of the products available in their countries (just about everything is available, other than heavy appliances and furniture, which are mostly off-limits because of shipping issues).
After choosing their purchases, customers are forwarded to a site administered by FiftyOne, which calculates their shipping and duty charges. In essence, they do their buying through FiftyOne, while the retailers fill their order. It’s great for the retailer, enthuses DeSimone, since he or she doesn’t have to get involved in the details, and great for the consumers, who have the opportunity to shop for products and styles that may not be available where they live.
Investments to the tune of $30 m.
There are dozens of issues to consider in such transactions, notes DeSimone, with currency exchange being the least of them. Shipping – finding the cheapest service that promises the quickest delivery – is a concern, as are computing, collecting, and remitting customs duties and taxes.
Some items – like those containing GPS chips – cannot be legally exported from the US, and FiftyOne has to keep track of these and inform customers. Then there are the myriad, ever-changing regulations about what can and cannot be imported into particular countries. “For example, you can’t import leather into Italy,” DeSimone mentions, adding that he has become a far “worldlier” person than he ever expected to be, after delving into the different rules and regulations.
FiftyOne employs 77 people in its offices in New York and Tel Aviv (where the programming and R&D are located). While DeSimone says he isn’t at liberty to disclose specific numbers about particular companies, he will say that many of his clients do between three and 15 percent of their business through FiftyOne.
The company raised $4 million in its latest investment round, and since its inception has raised $30 million, through investors who have included Pitango Venture Capital, Plenus Venture Lending Fund, Delta Ventures, US funds Adam Street Partners, JPMorgan, Online Ventures, and private investors.
Sears, Macy’s and Bloomingdales are on the list
FiftyOne didn’t start out with the intention of becoming ‘the world’s marketplace.’ For its first seven years the company was known as e4X and it enabled businesses to easily convert currencies to make international trade smoother.
It was founded in 1999 by Israeli serial startup entrepreneur Yuval Tal, who is now CEO of Payoneer, another company he started, that markets and provides service for prepaid MasterCards. According to DeSimone, FiftyOne emerged in 2007 when “… we realized that businesses working internationally had frustrations other than currency exchange. We asked them what they needed, and after all the suggestions, we realized we had the makings of an important service here.”
DeSimone maintains that FiftyOne offers the most comprehensive and extensive service of its kind. “As retailers have sought solutions to international sales – after all, more than 80% of all online consumers live outside the United States – several other companies have gotten into the picture, so there is competition.
“But I’m very happy with our customer list. Companies like Sears, Macy’s and Bloomingdales, among many others, are smart enough to make the right choice. I’m very happy to be in a business that is so helpful to US retailers, and that helps out the American economy and gives customers around the world the freedom of choice to get the products they want.”
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