Constantly scanning the Internet for the best current prices at dozens of different retailers can put a damper on the process of shopping online for a new camera, computer, or TV. And even though you might find a decent price, you don’t have the option of haggling with the salesperson to try to knock a little extra off the price tag.
“There’s a lot of haggling and negotiating that goes on when you buy consumer electronics in real life,” says Joe Marrapodi. “You can always kind of nudge the guy and beat the price down another $100. But you can’t really do that digitally.”
Marrapodi is the CEO and cofounder of Greentoe, a new name-your-own-price retail site that launched today with an inventory of consumer electronics such as cameras, TVs, and home audio systems. On Greentoe, customers name the price they’re willing to pay for an item, and the site’s certified retail partners decide whether or not to match the offer. Greentoe is launching with 15,000 products from 20 small- to mid-sized retail partners, including Electronics Express, Focus Camera, and OneCall, as well as retailers already selling through sites such as Amazon Marketplace.
Greentoe helps potential customers decide on reasonable prices to request of retailers by providing a real-time list of lowest prices for that item on other retail sites. It also automatically calculates and recommends an offer price it guesses will be reasonable to retailers.
After a customer places an offer, the first retailer to accept wins the sale. Greentoe gives retailers a few options for finding matches: A manual option lets retailers keep track of all incoming offers; an auto-sell feature lets the retailer tell Greentoe to accept an offer from anyone who makes a bid that falls within a desired range; and alerts lets the retailer see if anyone is searching for their products within a particular price range.
The consumer value proposition of a name-your-own-price marketplace is obvious: You save time and money. Retailers can potentially unload inventory and make more sales, but one of the biggest benefits of Greentoe for retailers, Marrapodi says, is that it acts as a customer acquisition vehicle for its retail partners. Each time a customer makes a purchase from a retailer on Greentoe, it will send the retailer that customer’s data, including their name, address, phone number, and email. Marrapodi says some retailers Greentoe is working with have told him they would even consider operating on a slight loss, since customer acquisition costs roughly the same as a small price cut on an item, but provides more long-term value to the retailer. But customers on Greentoe are presumably not looking for particular retailers so much as the lowest prices, meaning they may not necessarily want their personal information going to a retailer they view as a one-time supplier.
Greentoe, which raised $140,000 in angel investments, takes an average of 5% to 7% of a sale made on its platform, but that cut can range from 3% to as high as 15%. Though it’s only launching with consumer electronics, Marrapodi says home appliances are on the way shortly. He says his goal is to expand Greentoe to include 15 to 20 product categories by the middle of next year. Though it’s a relatively novel concept in the e-commerce space, Greentoe’s name-your-own concept is shared by Buystand, which we wrote about last week.
[Image: Flickr user Guwashi999]