2 New Sites Join Comparison-Shopping Fray
Priceflo.com will offer personal computer and consumer electronics merchandise on its site from merchants including Office Depot, J&R Music, Target, Wal-Mart, Dell and Buy.com. But in a twist, it will charge retailers a flat fee of $1,000 a month for unlimited inventory rather than the typical cost-per-click approach for every product checked out by a consumer.
"We feel that with a flat rate we can take the entire database and have everyone competing against each other," Priceflo CEO Jeff Dobson said. "It just provides a better forum."
In other words, Priceflo does not want merchants to list only their most profitable products online knowing that only those SKUs can justify the cost per clicks.
Priceflo has signed 20 retailers, served by four employees in the Tampa, FL, headquarters and two more in Los Angeles. These retailers so far have listed about 500,000 SKUs on the site pertaining to PC hardware and software, cameras, home entertainment systems and video games.
Besides a speedy engine and user-friendly navigation, Priceflo is relying on 3,000 categories to narrow searches from the items listed online.
Dobson thinks the flat-fee business model has the potential for revenue growth. Priceflo's labor and other overhead are low, and the technology investment already made upfront. Even marketing is done on a slender budget. The company uses public relations, billboards and paid keyword listings on search engines like Overture.
"Once a vendor signs up, there isn't much to do but push traffic," Dobson said.
Priceflo joins comparison-shopping services like Shopping.com, formed from the merger of DealTime and Epinions; BizRate.com; NexTag.com; PriceGrabber.com; and MySimon. The startup also will compete with Yahoo, which has a new shopping interface, and new entrants like Google's Froogle.com, Amazon and Ask Jeeves.
The second new entrant is Froople, a service announced by the American Homeowners Association, Stamford, CT, and Shopping.com. Froople lists 5 million products at 4,000 stores online. It is offered as a consumer benefit exclusively to members by AHA, which has always provided a discount shop-at-home service.
Froople works differently from other comparison-shopping services. A free trial is offered through Dec. 23 for consumers to shop Froople. Afterward, members are charged $8.25 a month billed annually.
Merchants participating on Froople include Wal-Mart, Target, Amazon, Home Shopping Network and Sears, Roebuck and Co. Shopping.com, San Francisco, also has offered access to more than 1 million product reviews.
In another incentive, Froople offers shipping-charge rebates up to $25 an order limited to $500 a year as part of a cash-back program. Users complete and send a free shipping claim form with a copy of the sales receipt. No minimum purchase is required, and all forms of shipping methods qualify.
Finally, shoppers who sign up at Froople also receive online identity theft coverage from AIG Affinity Group as part of the AHA membership.
Meanwhile, NexTag, which also eyes a slice of the $17 billion that Jupiter Research projects this year for holiday e-commerce, is reporting more traffic. The San Mateo, CA, company cited Nielsen//NetRatings numbers to claim to have added 1 million users, or a 21 percent increase, and double that based on comScore Media Metrix tracking. It claims 500,000 users each day.
At its current pace, NexTag is set to challenge BizRate for the No. 2 position in the category in December and Shopping.com for category leadership sometime next year.