With an Israeli-developed technology you simply pull out your credit card and shop all over the US from the comfort of your home.
By David Halevi
Israelis love to shop. In fact, many take ‘shopping vacations’ to the US and Europe timed to coincide with the end-of-season sales in major department stores. So it comes as no surprise that a new online shopping center was developed by Israelis. Now they – and folks around the world – don’t have to travel to New York to load up on bargains. They simply pull out their credit cards, click on the FiftyOne website (http://www.fiftyone.com/), and shop till they drop, from home.
For years, very few American companies sold over the Internet to retail customers outside the country. Not because they didn’t want to, says Mike DeSimone, CEO of FiftyOne, but because there were just too many obstacles – like ensuring secure credit card transactions, converting currencies, complying with import laws, and paying duties. Although retailers knew there were profits to be made, they preferred to avoid the extra hassles that international sales and shipping involved.
But those priorities changed following the 2008 recession. With sales suffering, says Desimone, they realized that they had to take action, "Retailers began to use our services as a way to expand their global reach, and to make up for the sales they were losing in the US," he says, adding that "now, there are many retailers selling products all around the world."
FiftyOne’s customer page
FiftyOne’s customer page
Indeed, a glance at FiftyOne’s customer page is like walking through a virtual American mall, featuring many names familiar to shoppers. There’s Sears, PacSun, Brookstone, Johnston and Murphy, along with big web retailers like Overstock.com, Drugstore.com, Shoes.com, and many more.
Myriad rules and regulations
On most of the sites, users in most countries outside the US (including Israel) can register with their home address and country of residence, and view a display of the products available to their countries. Just about everything is available, except for heavy appliances, and furniture and the like, that are off-limits due to shipping issues.
At checkout time, customers are forwarded to a site administered by FiftyOne, where shipping and duty charges are calculated. In essence, the customer is making the purchase through FiftyOne, with the retailer filling the order. DeSimone notes that this is convenient for the retailer, who doesn’t have to get involved in the details, and great for the consumer, who has an opportunity to shop for products and styles that may not be available in his or her home country.
There are dozens of issues to consider in such transactions. Shipping – finding the cheapest service that promises the quickest delivery – is a concern, as are currency conversions, computing, collecting, and remitting customs duties and taxes. It is illegal to export some items – like those containing GPS chips – from the US, and FiftyOne has to keep track of those and inform customers that the products are unavailable.
Then there are the myriad, ever-changing regulations about what can and cannot be imported into particular countries. For example, DeSimone relates that importing leather into Italy is illegal, and adds that delving into the different rules and regulations has turned him into a far "worldlier" person than he ever expected to be.
Raising an astounding $30 million
FiftyOne employs 77 people in its offices in New York and Tel Aviv (where the programming and R&D are housed). DeSimone says that while he can’t divulge details about how extensively clients use FiftyOne’s services, he can say that many of his clients conduct between three and 15 percent of their business through FiftyOne.
The company recently raised $4 million in its latest investment round, and since its inception, has raised $30 million. Investors have included Pitango Venture Capital, Plenus Venture Lending Fund, Delta Ventures, US funds Adam Street Partners, JPMorgan, Online Ventures, and private investors.
Originally, FiftyOne’s vision for international commerce was far more modest. The company was first founded in 1999, when it was known as e4X, and its purpose was to enable businesses to easily convert currencies, to make international trade smoother. Israeli serial startup entrepreneur Yuval Tal started e4X. Tal is now founder and CEO of Payoneer, that markets and services prepaid MasterCards.
Benefiting retailers and customers alike
In 2007, e4X realized that it was missing out on an important opportunity. "We realized that businesses working internationally had frustrations other than currency exchange," says DeSimone, adding that they had polled their customers and partners about what was preventing them from moving forward with international sales. "After all the suggestions, we realized we had the makings of an important service here."
While other companies help businesses to reach international customers, none offer services as extensive and comprehensive as those supplied by FiftyOne. "More than 80% of all online consumers live outside the United States," says DeSimone, so it isn’t surprising that many retailers have expressed interest in moving forward with their sales effort.
"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. We’re helping out American retailers, and giving customers around the world the freedom of choice to get the products they want."