We don't necessarily need to duplicate the SR model, we just have to find something that is equally useful. I would try a simpler design, where the buyer contacts the seller directly using encrypted messages. Information about reputable sellers is already discussed on the forums, so there is no need to publically announce who sells what.
1. Buyer sends message to query available products. Seller responds.
2. Buyer sends coins, name of product and physical address
3. Seller responds with order rejected or accepted.
I agree that having secure ways of mixing coins is not necessary, because there are already mixers for Bitcoin.
The question of having a reputation system and escrow is more tricky. I'm not sure that having a traditional feedback and escrow system is the best solution. Discussions on the forums already work as a kind of a reputation system.
Having a user-friedly client for this would be important.
EDIT: The seller-side software would run continuously on the seller's computer, keep track of the inventory and automatically respond to the buyers' queries.
If we have escrow AT (which has been discussed and is very possible) and a reputation system based on Tx id, with buyer/seller verified, (which will be added soon to clients) it will be close to possible. I suggest decentralized marketplaces that are distributed with torrent like files downloaded to clients and then viewable via GUI.
I didn't understand what buyer/seller verified means.
I'm wondering if escrow/reputation is the best model for the SR type use case, and if there could be an alternative model.
Would the names of products and quantities sold be publicly available on the blockchain? Somehow I think this will draw unwanted attention.
How would disputes be resolved? Outsiders can't know if the seller has sent the product. Either the seller or buyer can try to scam.
Seller can sell to himself and give good feedback.
Here's yet another idea: part of the payment before getting the product and part after. For new buyers for example 80% 20%, for older customers 50% 50%. The seller could set the algorithm. Even the prices could be lower for repeat customers. The software could automatically send each buyer an individualized offer.