Remember when Priceline burst onto the scene in 1998 with that crazy concept ‘name your own price?’ Though I was but a wee one at the time, I do remember it being a “thing.” And it seems to have worked because it still offers that service (or course, it did begin offering other models too). But it is a bit strange that price-naming hasn’t become commonplace for other markets, like e-commerce.
Here’s a startup that’s trying to reignite that strategy. Tennessee-based PriceWaiter launched in 2011 and provides a tool for merchants to embed on their websites so customers can ostensibly haggle with them.
The two co-founders, Andrew Scarbrough and Stephen Culp, both stem from various commerce backgrounds. According to Scarbrough, the two got to talking and realized that there was a “great need for sellers to engage comparison shoppers.” (Not really something you say over beers, but sure. Why not.)
As they saw it, conversion rates were just too low on the commerce side. That is, people were visiting websites, perusing items, but weren’t going through with the purchase. So Scarbrough and Culp founded PriceWaiter. In addition they received backing from the Lamp Post Group, a Tennessee-based incubator that just so happens to reside six blocks away from PriceWaiter’s office.
PriceWaiter’s entire business rests in this price-naming tool. Consumers click the tool on it, name the price, and this information gets relayed to the merchant. The merchant can either accept, decline, or provide a counter-offer. It’s an online version of that angry (yet lovable) man at every flea market. Weston Wamp, director of business development for the Lamp Post Group, sees this tool as fostering a sense of rapport.
In addition, PriceWaiter claims to be successful at raising e-commerce conversion rates. As an example it names one electronic store who saw a 16 percent increase in its conversion rate after eight months. Another furniture store claims its rate increased by up to five percent.
As of now, the service is completely free for merchants to use. The company is just trying to get the word out and exhibit its initial success. But once the company hits 500 businesses, then things will change.
How will it change? Well, the team doesn’t seem to be quite sure yet. Before making it free, PriceWaiter dabbled with a commission-based business business. Scarbrough told me that didn’t quite work out. So now the company is considering a premium subscription-based model while, keeping a free version.
But first thing’s first: PriceWaiter has to get recruit online merchants. Even though the company hasn’t hit 500 companies yet, the team seems optimistic. Wamp told me that the 500 mark is on the horizon. In addition, he added that once PriceWaiter creeps up into an industry “there is viral growth.”
Given that less than 500 companies have adopted it thus far, ‘viral’ probably isn’t the most illustrative word.
Either way, it is a useful tool — especially for small e-commerce companies. The co-founders emphasized its ability to level the playing field for small businesses. “It makes markets freer,” they told me. This is because small e-commerce sites don’t have to rely on big platforms like Amazon to market their products, or even Google, for that matter, which favors paid AdWords in its results. And, it’s a harkening back to the olden days of haggling for that knock-off watch on the street (something my grandparents would be happy to see).
There aren’t too many other players in this market as well (other than the obvious heavyweights like eBay). A website called UrbanOffer launched a few years back claiming to be “name your own price” for local services, but it doesn’t seem to be around anymore. And there are some individual businesses trying their own version of the tool.
So maybe it does stand a chance. But it’s going to have to yell pretty loud to get enough businesses to bite. And if more businesses do adopt it, then I won’t have any reason to go to Chinatown anymore to haggle purchases.