UPDATE AUG. 14, 2014:
Overstock CEO Patrick Byrne told BusinessInsider on Wednesday that his company had broken the US$2 million mark, and that daily Bitcoin sales have recently settled in at around US$15,000. That's about US$300,000 per month, or about a quarter of a percent of the company's overall monthly sales figures. Byrne's revised annual Bitcoin sales projects are about US$8 million.
He said that 90% of Overstock's Bitcoin shoppers are males, though they do purchase a wide variety of goods. He also said that the average Bitcoin order was worth around US$240, whereas the average order in fiat was US$165.
Over the weekend, Dell CEO Michael Dell tweeted that the company had just received an 85-BTC (about US$50,000) order for a PowerEdge server.
Recieved PowerEdge server order @ t.co/IeJK4FTDCV for more than 85 #bitcoin (~$50K USD) t.co/lLkmK4K8Z1 #Dellbitcoin— Michael Dell (@MichaelDell) August 9, 2014
No comprehensive BTC sales data have come out from Dell since the company announced in mid-July that it would accept the cryptocurrency, but the tweet nonetheless got us thinking: What effect does Bitcoin acceptance have on a big company’s sales, especially early on?
So, we took a look at three companies that do high volumes of sales, accept Bitcoin payments and have publicly announced Bitcoin sales figures at some point.
Not surprisingly, this isn’t a huge list: Just Overstock, CheapAir and TigerDirect make the cut. (We are still hoping to hear sales figures from Expedia sometime this summer or early fall.)
Each of those three companies made an announcement when their Bitcoin sales broke a mark above the equivalent US$1 million-dollar level.
- At the beginning of March, Overstock CEO Patrick Byrne told CoinDesk that the company had just hit the million-dollar mark in Bitcoin sales. It took Overstock another two and a half months to make its next US$600,000 from Bitcoin.
- CheapAir announced in mid-July that it had hit Bitcoin sales of US$1.5 million. The company began processing Bitcoin payments in November 2013.
- Tiger Direct hit its million-dollar mark on March 13, closely paralleling Overstock’s initial results for the first quarter of 2014.
Obviously, seven-digit sales figures mean different things to different companies because of their respective sizes. For context, we tried to find each company’s 2013 revenue numbers, but only Overstock has made those figures public.
TigerDirect’s parent company, Systemax, has reported its figures, which are about 20% smaller than Overstock’s. Given that Systemax owns a bunch of other retail outlets, it’s fair to conclude that TigerDirect sells nowhere near the volume of merchandise Overstock does, yet it hit the million-dollar mark a few days faster.
The takeaway there: A store selling computer parts and electronics attracted more Bitcoin shoppers than a general retailer. Groundbreaking, I know.
Also, we reported at the time that TigerDirect’s sales volume grew 50% immediately after the Bitcoin-acceptance announcement, but that turned out to be a horde of altcoin miners buying video cards.
So, it appears both Overstock and TigerDirect saw an initial rush of Bitcoin customers, which tapered off shortly thereafter. We don’t have any such information for CheapAir, other than the fact that CEO Jeff Klee told CoinDesk that Bitcoin sales didn’t take a hit when Expedia announced in June it would accept Bitcoin for hotel bookings.
Perhaps, then, demand for cryptocurrency payments follow the rules of The Long Tail: Not everyone will want to pay in Bitcoin (or Litecoin, or whatever), but someone will, and it costs a company nearly nothing to accommodate those customers.