Square — a company best known for the small, white plastic cube that can read credit cards when plugged into a smartphone or tablet — is taking on the likes of Etsy, Amazon, and eBay with the launch of its own online marketplace called Square Market. The expansion from mobile payments to online retail might seem a bit odd to those who don't follow Square, but it's part of an ongoing push from the company to deliver a product to answer each aspect of online commerce. In addition to its card reader, Square makes a mobile wallet app for consumers, a payments app for businesses, and a $299 plastic stand that turns iPads into a cash register replacement. It even has an answer to PayPal in the works with Square Cash.
"Creating an online marketplace is our next step in making commerce easy for everyone," said Ajit Varma, Square's director of discovery, in a statement. The idea behind Square Market is to make local businesses accessible to Square users nationwide, Varma said. Creating a storefront on Square Market is free, and sellers can manage list items, add product photos, manage inventory and create an online profile for their businesses that the company hopes will essentially eliminate the need for sellers to have standalone websites. Businesses can also send a tweet anytime they post a new item for sale in Square Market as well.
While the online storefront itself is free, transactions aren't. Square said it will take a 2.75% cut of revenue for each item sold. Its rivals, meanwhile, charge seller use flat fees, percentage fees, and sometimes both for each item sold. Amazon charges 99 cents per item listed, or $39.99 a month for heavy sellers, on top of percentage fees that varies depending on whats being sold and can range from 6% to 15% of the sale price. Basic fees on eBay range between free and 30 cents per item, depending on the type of the item and how many items are listed. But eBay also tacks on fees for image galleries, timed listings, and various other options that can drive costs up quickly. Etsy charges a fee of 20 cents for each item listed, but its fee kicks in only when an item is sold or has been listed for longer than four months.