PriceWaiter in 2011 was founded by Stephen Culp and Andrew Scarborough as a solution for e-commerce retailers that were struggling with low conversion rates, shopping cart abandonment and minimum advertised pricing and comparison shopping.
The cofounders have launched a marketplace where users can negotiate directly with online retailers, which PriceWaiter said makes the back-and-forth dance over price reductions safer and easier by exposing hidden costs without degrading all prices. The marketplace helps merchants sell more and buyers buy more, and features thousands of products exclusively available at PriceWaiter.com.
“This is our first consumer-facing play,” Scarborough, the company’s chief operating officer, said of the marketplace. “We’re bringing top-rated products from sites we’ve worked with for years. You name the price you’re willing to pay and you have a chance to counter offer. It’s different than eBay in that we’re committed to new products. We’re buying current merchandise from retailers now. When we’re signing up a new retail partner, we make sure they have great customer service and shipping.”
Big retailers have seen conversion rates rise by as much as 30 percent with the PriceWaiter app, the company said. Bidding on a pair of Newton Motion 8 running shoes with an MSRP of $174.95, and Amazon price of $143.21, PriceWaiter offered savings of at least 18 percent. Bidding $126, PriceWaiter in chat mode said, “I’m reaching out to trusted retailers to negotiate the best deal I can for you.” Then, “I was able to land you a deal for $141, which is 19 percent off.”
The site is heavy on activewear and sneakers with brands such as Adidas, Nike, New Balance and Saucony sneakers; Rhone T-shirts, joggers, shorts and pants for men; Oakley sunglasses, and men’s Bulova, Casio and Garmin smartwatches.
After making an offer, consumers can counteroffer until the seller won’t go any lower and the counteroffer option disappears. Customers can choose to check out a product or move on to another item. Scarborough noted that there’s never a charge to consumers; PriceWaiter takes a percent of each sale from sellers.
Scarborough said PriceWaiter identified deep inventory across all sizes. “We’re finding the right partners with the right inventory,” he said. “The magic piece for us is seeing how low we can go. We work with authorized retailers who provide us with products they’re willing to sell at a discount.”
So far, 500,000 shoppers across the platform have made offers and interacted with the platform. PriceWaiter collected data on consumer price sentiment, including findings that shoppers typically look for a 31 percent to 34 percent discount on apparel. “That’s the sweet spot, where we see product move,” Scarborough said. “It’s meaningful. The discount for home and garden that gets consumers’ attention is about 12 percent.
“Right now, we’re focused on the depth of each category,” Scarborough said. “In the next few weeks, you’ll see sub-categories such as men vs. women, and furniture featured with home and garden. Personal electronics is another key area.”
PriceWaiter raised several million dollars in venture capital from angels and investors such as Gary Vaynerchuk of Vayner/RSE, whose first investments included Twitter, Facebook, Tumblr and Uber, and who has deep experience in e-commerce. PriceWaiter early next year is planning an institutional raise of $3 million to $5 million, Scarborough said.