Pricefalls.com: As Prices Fall, Buyers Come to Marketplace
By Greg Holden
If you've been tracking the ups and downs of Netflix, you know the perils of making things too complicated for your customers. On its face, Pricefalls.com seems to fly in the face of that wisdom. It places emphasis on the complex, sometimes confusing, Dutch auction format. Yet, two years after its launch in 2009, it's gaining both buyers and sellers, and it hosts 2 million active listings.
Pricefalls places emphasis on the Dutch auction format as a way for businesses to unload excess inventory. In the format, the price descends (or rather, falls) as more buyers place bids - 23-year-old Elliot Moskow, CEO of Pricefalls, calls it "Gravity Shopping."
"Product prices fall over time until the product is purchased, reaches someone's bid, or falls to the lowest offering price (the Price Floor), at which point the product is taken off the market," Moskow explains. "During the auction, shoppers are free to purchase items at the current offering price (the "Catch it Now" price), or bid on items by setting an "If it Hits" price, which automatically finalizes the transaction if the offering falls to that price. This allows sellers to sell high quantities of merchandise within a single auction, while always catching the consumer at their maximum willingness to pay."
Pricefalls offers a wide variety of products for sale, and Moskow says prominent Internet retailers have joined Pricefalls in a number of key verticals. "Pricefalls truly has some of the best deals out there in Home and Garden, specifically furniture and household items," he said. "Also, Computers and Networking is consistently a top-selling category."
When you take a closer look at Pricefalls, you see that the site bends over backwards to provide as many ways to buy as possible, and its customer service staff even function as "personal shoppers" for customers.
"One aspect that sets Pricefalls apart is the level of one-on-one service we are willing to offer our customers," says Moskow, who started the company with Peter Schaefer (now CIO) and Chad Casey (now Creative Director). Moskow, who lives in Las Vegas, started the company when he was still a student at Bates College. He said he was frustrated with sales on eBay that either didn't attract a lot of attention or that attracted fraudsters.
Each seller gets a Pricefalls account rep, which isn't unusual. But each buyer can contact Pricefalls by phone or Live Chat, contact sellers through social media, and get a Pricefalls personal shopper. In one recent case, a personal shopper was able to locate and get a special discount for a customer on a wood-burning stove.
Buyers, of course, can also make purchases on their own from auctions, fixed-price sales or daily deals, a feature Pricefalls makes available to all of its sellers. The Deal of the Day option has worked out well for Air-n-Water, which sells air conditioners, space heaters, coolers, and similar merchandise.
"One of the biggest benefits we have seen with the site is the increased exposure we get for the products we carry," says Air & Water Marketing Associate Andreah McCartney. "Diversifying our sales channels is integral to our success in the ecommerce world, and Pricefalls provides us with another way to increase our exposure to potential buyers. The best feature is the simple integration and management of selling on the platform. Setup was very simple and just about everything is automated, which makes it extremely simple to manage - especially compared to some of the other, more complicated marketplaces."
Sellers on Pricefalls pay no listing fees, and pay a final value fee of 4.5 percent for items that actually sell. Storefronts cost $49.99 per year.
Pricefalls employs a number of techniques in order to drive traffic to the marketplace. First and foremost, according to Moskow, is offering customers great deals along with a great level of service. "We want our customers to tell their friends about Pricefalls, and great service certainly has this effect."
Merchants on Pricefalls also have the ability to distribute their product feeds to the major comparison shopping networks such as TheFind along with the major search engines Google and Bing. Pricefalls also features merchant deals in its weekly newsletters, daily deal promotions, on over 300 affiliate sites, and on the various social media platforms on the web. It also utilizes various paid search campaigns to promote its best deals.
After spending a year developing the technology behind the marketplace, Pricefalls said it is seeing "substantial" growth. It keeps metrics private, but said it registered 5,000 new users in October, and has 300 businesses who have listed products. Moskow himself is still learning. He is studying for an MBA to add to his degree in economics.
"What I enjoy most about running this company is having the opportunity to develop an organization from the ground up while simultaneously helping other retail businesses grow and develop as well," he says. "What excites me is that our company culture is growing stronger every day, as it is shaped by interactions with our user base, mixed in with every unique perspective that our diverse bunch of employees brings to the table."
You can learn more about selling on Pricefalls on this page.
About the author:
Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.
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