How iBuySell uses reverse auctions to add a zing to online shopping
For every customer who finally makes a purchase from an online marketplace, there are many more who browse through the site and then walk away. Mobile marketplace iBuySell is trying to change that.
Targetted at bargain hunters, the e-commerce platform helps vendors sell their inventory at a rapid pace through 90-second reverse auctions and in the process convert casual visitors to customers.
"It is a radically different from the sales that happen on traditional online marketplaces," says Kaustuva Mukherjee, co-founder, iBuySell. "Wait for too long and someone else may snag the item. Freeze the deal too early and you wonder if the prices would have gone down further. This approach to online shopping ensures a thrilling experience for everyone involved."
How it works
The app puts the spotlight on new products in real time, as shoppers discover new items under several categories including fashion, jewellery, shoes and electronics, every few minutes. Sellers need to take a picture of the product, give a short description, and list it from their mobile device. They have to key in three prices â€“ manufacturer's suggested retail price (MSRP), the discounted price and the minimum price at which they are ready to sell. Buyers can browse and tag their favourite items to get notified once the items go on 'live sale' or purchase the products right away. When an item goes live, prices fall by the second as buyers hit the freeze button to lock in the price and claim the item.
The startup has a commission based revenue model as well as a subscription model. Vendors can opt for a pay per transaction model (5-15% commission) or a monthly transaction fee of $29-299(Rs 1936-19,964) depending on the number of products sold through the platform.
The company claims to have over 200 vendors in India, which it aims to take to 1,000 in the next one year. It hosts products from small entrepreneurs, consignment sellers, retailers, organised vendors and artisans. iBuySell claims to have nearly 4000 sellers across the world. Sellers can also list their e-commerce store on the app and drive traffic towards them.
The app is available in 130 countries, and has the intelligence to detect the location of the customer, and accordingly offer her the country-specific interface.
However, iBuySell plans to focus on the US, the UK, Canada and India initially. "Unlike Amazon, we do not maintain any infrastructure or warehouses which allows us to operate in so many countries. The only overhead cost is for customer services which we plan to increase as demand grows," says Mukherjee. In India, the company has marketing teams in Delhi and Kolkata.
iBuySell plans to attract shoppers and sellers via Instagram, WhatsApp, Facebook, Twitter, internet forums and blogs where the company has influencer-driven campaigns. The app has inbuilt marketing mechanisms such as referral credits.
"The market is huge and Flipkart and Amazon are giants, but we are not in the Amazon kind of space because that's more of retail," says Mukherjee. "These platforms do not provide the sense of engagement and adrenaline rush that iBuySell does."
Mukherjee, along with his wife Suchi Mukherjee, a realtor, co-founded Hotdealsatwork.com LLC, which runs the app, in June 2015. Mukherjee is a senior vice president at Citigroup in the US. Registered in the US, it is currently bootstrapped, with the two putting in $500,000 to start the venture. The startup plans to start talking to US and Indian investors for seed funding of $1-2 million in the third quarter of this year.
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