Just weeks after they officially launched on February 27th, 2013 electronics retailer BitcoinStore has announced that it’s sales for the quarter are well below it’s target. As of this writing the site has just 15% of it’s intended goal of $850,000 for the quarter.
Were this any other new online retailer the news might not seem significant. However, the launch of BitcoinStore’s beta some four months ago could be seen as the catalyst for Bitcoin’s most recent rally. If BitcoinStore succeeds it will send a message to larger online retailers that they might benefit from Bitcoin. If it fails future entrepreneurs might find themselves wary of pinning their hopes and dreams on a single payment method.
BitcoinStore is one of the first major online retail sites built specifically for Bitcoin. By accepting only Bitcoin the retailer manages to avoid costly credit card fees. The removal of these fees has allowed BitcoinStore to offer pricing at or below that of it’s major competitors. However, part of that pricing is dependent on an agreement that they have with their wholesale distributor. BitcoinStore must maintain $850,000 in quarterly revenue just to maintain this agreement.
With just 20 days left to the end of the quarter BitcoinStore needs to do over $700,000 more in sales. That amounts to roughly 5 times what they have done in sales up to this point in the quarter. This has caused BitcoinStore to go to the Bitcoin community for support. They’ve placed a tracker on their home page in an attempt to bring more attention to the issue.
So what is responsible for this lack of revenue for BitcoinStore? Some have pointed to the volatility in the Bitcoin market as well as it’s very fast upwards growth. Few people want to spend their Bitcoin today if they think it may be worth 150% by week’s end. The value of Bitcoin has been fluctuating wildly as well. Just last Wednesday the currency saw highs around $49 while reaching lows of around $33. This sort of fluctuation can make purchasing with the currency a tumultuous experience.
At any rate it may be worth watching BitcoinStore over the next few weeks. If it somehow manages to generate enough revenue to meet it’s target it could be seen as an announcement to would be entrepreneurs and online retailers. However, should BitcoinStore fail, it may be seen as an indicator that Bitcoin is not mature enough yet for major online retail.