January 27, 2003, 12:00 AM

Online retailers hope to extend their reach through c-store kiosks

A growing number of e-retailers are signing up to sell through in-store kiosks in retail chains such as 7-Eleven Inc.

A growing number of e-retailers are signing up to sell through in-store kiosks in retail chains such as 7-Eleven Inc., Ken Stempler, vice president of sales for Cyphermint Inc., tells Internet Retailer. He adds that these e-retailers are also signing up to accept online payments through Cyphermint`s Pay Cash System, which digitally disburses cash that consumers have loaded onto a networked payment service.

Stempler says the e-retailers signing up for kiosk sales and the Pay Cash System include Alliance Entertainment, JewelrySprite.com and MovieTickets.com. He says the kiosk sales are proving most attractive to retailers that offer products with broad consumer appeal, particularly so among pure-play e-retailers that don’t have a presence in physical stores.

Cyphermint is also getting interest in kiosk-based retail sales from other types of merchants who would host the kiosks in their stores. "C-stores are a natural, but I can see them going in a lot other places," he says. He declines to mention other organizations interested in hosting kiosk-based sales, but says they include a grocery chain and a government agency that would place the kiosks in lobbies heavily frequented by the public.

Retailers selling through 7-Eleven kiosks may pay a placement fee to have links appear on the kiosk screen, or fees based on transactions, says 7-Eleven CIO Keith Morrow. Cyphermint charges a one-time set-up and marketing fee to retailers that sell through the kiosks; these fees can range from $15,000 to $100,000, depending on how many links Cyphermint needs to create between the retailer and the kiosk-based e-commerce system and whether a retailer connects to the Cyphermint Pay Cash System, which enables consumers to make online payments by deducting funds from a networked account.

In addition, Cyphermint may charge a monthly service fee of up to $2,500, depending on the amount of maintenance and services a retailer requires. For example, if a retailer sends in paper printouts of product and promotional information, that costs more to upload into the Cyphermint system than information that retailers send electronically, Stempler says.

Cyphermint also charges transaction fees that it shares with the retailer hosting the kiosks in its stores. These fees range widely depending on the type of transaction, from about 5% to 40% of the value. Sellers of digital content, for instance, would pay fees at the higher end of that range, Stempler says.


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