Weebly Launches E-Commerce Tools To Lure Entrepreneurs From Amazon

It’s been said that under half the businesses in the United States don’t have a presence on the web beyond a quick listing by Google GOOG -0.47%. Part of the reason is that website hosting can be expensive and complicated. Website builder Weebly, which says it hosts blogs and websites for 20 million people, wants to tackle the problem by appealing to part-time entrepreneurs who’d like an online store, but can’t afford the real estate. It’s spent the last two years building an e-commerce platform that makes it simple enough to create a free e-commerce site entirely on a smartphone, and in a few minutes.
“One of the things we’ve learned about our users in the last couple of  years is that 60% consider themselves entrepreneurs,” says CEO Dave Rusenko. In response he’s now offering them an eCommerce plan which includes a basic, free version for a site with features like product search, mobile checkout and the ability to sell up to five products. Selling unlimited products will cost $29 a month
Rusenko, 28, founded his company in 2006 while trying to help a college friend create a website with Microsoft FrontPage, and finding the process too frustrating. The drag-and-drop system he came up with became the foundation of Weebly, and the hosting service has since, quietly become a publishing giant. While it lags behind Tumblr and WordPress in terms of monthly users, Rusenko claims Weebly-hosted sites are visited by a quarter of the U.S. Internet population each month. He now helms a staff of 90 from offices in San Francisco ad New York.

Till now Weebly has allowed users to sell products on their sites through PayPal or Google Checkout, offering 150 customizable templates. From Wednesday the company will also let them create merchant accounts with Stripe and Authorize.net, and offer free, e-commerce features to track orders, calculate shipping, calculate VAT and create search functions for their products.
Rusenko says the sites can be edited on both mobile devices and the web, and he demonstrated taking photos of an object with his iPhone, before creating a dummy store using the Weebly iOS app.  The process of setting up an account and site with products can take just a few minutes, he claims. Websites that have used a beta version of the new service include The Whiskey Ball ice mould and Double Kick hot sauce.
Weebly takes a 3% cut of sales, while competitor Etsy takes 3.5%. Amazon charges 6-15% of a seller’s sale price, and so does Buy.com, which in addition takes a flat 99 cent commission from each sale.
If Weebly’s users upgrade to a $29-a-month Business Plan the company promises to waive the sales fee and rely purely on the subscription. Another competitor, Goodsie, charges $30 a month for e-commerce hosting and $75 a month for extra frills like multiple user account and an email marketing system.
“Their business model is to take a cut of transaction,” says Rusenko of Amazon and Etsy. “Our business model is to get a large number of people signed up. We want to see more people selling.”
The other difference, he says, is that Weebly’s e-commerce platform is designed to be built with and used on mobile devices. “The best way to add products is from your phone,” he says, for instance walking around a warehouse and taking photos.
Weebly, can invest in this sort of infrastructure because it has been profitable since 2009 and revenues are “growing very quickly,” according to Rusenko. There was an Series B funding round from Sequoia Ventures in 2011, but the company stayed mum on how much it raised. Rosenko says Weebly is self-sufficient, and has plans to move into a 50,000 square foot office next year, as well as hire more staff.
Much may be riding Weebly’s ability to entice a new wave of entrepreneurial users, but Rusenko thinks there is a hidden opportunity among small businesses.
“If you look at the top 500 merchants on Amazon, and then at the next 500 sellers, the second 500 have been growing faster than the first,” he says. “That’s interesting. It means there’s this pent-up demand for more unique products that aren’t necessarily mass produced. What we set out to do is empower smaller merchants to have the same checkout experience as Amazon. Let’s give them the tools to effectively compete.