Site Promises a Can't-Lose Deal
Using the patent-pending Save or Get Paid mechanism, iDerive allows the consumer to place an order on a discounted deal, after which the site tries to get it in the specified time. If iDerive fails to get the deal for the consumer at the discounted price, he gets the purchase price back in cash.
"The origin of our model is the financial market," said Mark Nordlicht, CEO of iDerive, New York. "So what we're really doing is allowing suppliers to lock in sales and then sell them for higher prices on the open market."
Thus, suppliers can lock in sales to consumers while retaining the option of canceling those sales if that inventory can be sold elsewhere at higher prices. Consumers, on the other hand, besides gaining discounts, also get 100 percent cash compensation if the order is not fulfilled.
"This cash comes from our supplier partners who are willing to pay for the flexibility you've shown for the knowledge of a guaranteed sale," Nordlicht said. "Basically, the consumer's first in line should the supplier choose to discount."
The service at www.iderive.com initially will offer consumer electronics nationwide, expanding to automobile sales in the Northeast on Sept. 15. National coverage of airline tickets, hotels and automobiles will follow on Nov. 1.
Partners that have signed up include regional distributors of Sharp, Pioneer, and Sony Corp. for consumer electronics, and 150 dealers in the Northeast for automobiles. Among hotels, iDerive counts names such as Starwoods, Sheraton, Swissotel and Hilton.
IDerive's entry adds to the number of pricing models in the online marketplace.
Retailers such as Wal-Mart.com and Amazon.com set fixed prices with discounts, while Mercata and MobShop.com offer group-buying prices that decrease as more consumers collectively commit to buy.
In a highly popular model, eBay.com offers person-to-person auctions, though it ventured into the fixed-price model with its recent purchase of discounter Half.com. Priceline.com allows consumers to name their own prices for acceptance by vendors.
A key benefit for suppliers is iDerive's pricing mechanism as a tool for better forecasting of demand and control of inventory.