It took the Internet to get people to pay for stuff that doesn’t really “exist”
– the “virtual goods” that are a large part of so many online games and
Want to get ahead in Farmville? Then you
need a “shovel” – one that exists only inside your computer. You pay real money
for it, though.
There are hundreds of thousands of similar “goods” around
the Internet – many of them used in virtual communities and social games, as
well as on cellphones and regular computers.
And while many virtual
goods, such as software programs and games, are made and marketed by “real”
companies, with their own sales departments, large numbers of these products are
made by folks who are working on a side project to make a little extra money and
who don’t have the marketing and sales resources to reach large numbers of
In the past, such “manufacturers” had little choice
but to try and make a deal with a large company that specialized in marketing,
to get their program out to the masses – a deal that was usually to their
disadvantage and very difficult to put together.
For the past several
years, however, there’s been an alternative: the sales and marketing services
provided by Israeli startup Plimus (www.plimus.com), which works with thousands
of of vendors and affiliates who sell virtual goods all over the
With 2010 set to be a record year for the company, Plimus is
now the world’s largest independent online reseller of virtual
Plimus tries to provide all the back-end sales services virtual
goods vendors need, says Eldad Ben-Tora, Plimus’s product-management
“Most of the writers of software, games and virtual goods for
socialmedia platforms do a fine job of getting their product together, but they
are lost when it comes to selling, which is really a full-time job by itself,
one they don’t have time for,” he says. “They may even have customers, but there
are so many complicated steps in getting the products into their
“We work with vendors on the sales side, making sure that they get
the money they are supposed to for the goods they sell customers, despite the
obstacles – thus leaving them free to do what they are good at, which is
And those “obstacles” are manifold, Ben-Tora
“In order to work with credit-card companies in many foreign
countries, for example, you need to have an account in a bank there – a
complicated affair that entails a whole new set of worries,” he
Credit cards aren’t the universal means of payment that they they
are in Israel and the United States, Ben- Tora says.
“In Germany, for
example, many online customers prefer to pay via bank transfer, while in France,
most consumers use a local French credit card, as opposed to Mastercard or
Visa,” he says.
Even those latter cards have esoteric rules that, if not
followed properly, will unnecessarily hold up payment, Ben-Tora
“Sellers who are using a subscription model have to bill the
creditcard companies every month,” he says. “It’s an antifraud measure, but one
that requires much extra work on the part of the seller, who in many cases is
working alone and can’t afford to put extra time into the project or hire
someone else to help.”
Taking care of those issues is exactly what Plimus
“We have bank accounts in different countries, for example, and we
have deals with local banks and credit- card companies to clear payments, so the
issue of international payment transfer is eliminated,” Ben-Tora says. “We bill
the customer, providing receipts and tax documents, take care of
foreign-currency issues and, in general, handle the entire transfer process,
releasing the virtual goods to the customer when we receive payment. We deduct a
small fee and forward the rest of the money to the vendor’s account,
successfully completing the sale with no inconvenience for buyer or
It’s similar to what Paypal does, to an extent, but Plimus goes
far beyond Paypal.
“We offer a full sales platform, handling all of the
back-end sales,” Ben-Tora says, citing coupons as an example.
system uses a wizard that gets sellers up and running in minutes,” he says, “and
it gives them total control on how to sell their product: one-time charge,
subscription, etc. If they want to offer a coupon, they can specify the details
– how much the coupon will deduct from the price, when, etc. – and we apply it
to purchases as the vendor specifies. Our aim is to make this process as
transparent to the vendor and customer as possible, with no extra effort on the
part of either.”
Another leg Plimus has over Paypal is in its innovative
marketing services: helping vendors get the attention of customers and getting
“eyeballs” for their products, putting them in view of
“Vendors can, of course, sell their company’s own products,
but they can also sell other companies’ products as affiliates, keeping a
percentage of the sales,” Ben-Tora says.
While Plimus counts about 5,000
vendors, with as many as 100 new vendors joining every day, according to
Ben-Tora, the company also has about 40,000 affiliates, meaning that a piece of
software developed by a programmer in his or her spare time, with no marketing
resources to speak of, could be sold by thousands of affiliates on websites
around the world.
“It’s a powerful marketing resource and one that has
enabled vendors to reach far more many customers than they could on their own,”
With a package this complete, it’s little wonder that vendors
have flocked to Plimus, giving it some $200 million in sales this year, with the
company growing in terms of vendors and sales some 40 percent to 50% in each of
the past five years.
Based in Herzliya, with sales offices in California,
Plimus, which was established in 2001, has 80 employees and is one of Israel’s
biggest Internet success stories, if not its most famous, Ben-Tora
It’s not for everyone, though.
“Early on we made a strategic
decision to stay away from questionable products: porn, Internet gambling, even
jewelry,” he says.
The company actually vets vendors by calling the first
five customers who purchase a product using the Plimus platform, whether
directly from a vendor or from an affiliate, Ben-Tora says.
“We check to
see that the customers are satisfied with what they received, that the product
is as advertised and works properly,” he says. “If it isn’t, we cut the
responsible vendor loose... It’s our name that appears on the customer’s
creditcard bill, and our reputation is at stake as well.”
But Plimus is
happy to do businesses with vendors who are on the up-and-up, Ben-Tora
“There are no up-front fees, and anyone with legitimate virtual
goods is welcome to join,” he says.
“We know we’ve helped many online
vendors succeed in their Internet sales efforts, and we’re proud of
Plimus is just as proud of the fact that they saved those vendors
lots of Internet sales headaches, by providing an all-in-one, easy-to-use sales
and marketing platform, Ben-Tora says.