April 19, 2012
Haggling Goes Online
It’s not unusual for shoppers to go into a consumer electronics store or a jewelry shop and negotiate over an item they want to buy. Now, they can do it for those categories and others online.
Netotiate, a new site that bills itself as a consumer-to-merchant negotiation platform, allows shoppers to find a product they want to buy, pick a merchant they want to do business with and then anonymously name the price they want to pay. The merchant then has 48 hours to respond.
According to Netotiate, its platform is a value to both consumers who now have access to “great deals through an effective and pleasant buying experience” and participating retailers.
“Netotiating merchants are able to generate variable margins through an effective and legit price discrimination, which can directly boost their revenues and profits” Amir Farhi, CEO of Netotiate, in a statement. “They are only charged a fee on completed deals via Netotiate, giving them a cost-effective customer acquisition vehicle. Eventually, every product category will be on Netotiate, giving merchants a whole new way to convert sales and engage with consumers.”
Merchants with goods offered on Netotiate include Adorama, Ashford.com, Abe’s of Maine, Boscov’s, GlassesUSA.com, Nordstrom, Peter Glenn Ski & Sports and Sam Ash.
![[Image: Netotiate]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAxIDEiIHdpZHRoPSIxIiBoZWlnaHQ9IjEiIGRhdGEtdT0iJTJGcHVibGljJTJGaW1hZ2VzJTJGZGlzY3Vzc2lvbnMlMkYxNTk1NiUyRm5ldG90aWF0ZS1zdGlsbC5qcGciIGRhdGEtdz0iMSIgZGF0YS1oPSIxIiBkYXRhLWJpcD0iIj48L3N2Zz4=)
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Recent Discussions
Discussion Questions
Discussion Questions: What do you think of the potential for websites that allow consumers to negotiate price? What do you see as the upside/downside to this type of service for merchants?
Poll
Are we fast reaching the point where words are not heard? Where the only means of communication is through a keyboard?
Going online to determine who is offering the product for the lowest price changed purchasing behavior because consumers could choose the retailer, the location of purchase from local to online retailer, the delivery method, and price. Providing the opportunity for a retailer to meet or match other prices changes the landscape once again.
One part of the consumer experience not covered in the calculations so far is the opportunity to ask questions, return items, or get defective items replaced or fixed. Consumers may have to choose whether the bargaining to get a low price is worth taking all the risk on product protection.
It’s in our DNA to negotiate. Love the concept, not sure about its staying power. For those that want to let their fingers do the shopping, it works. At same time there is no harm in negotiating on the floor of your Best Buy, HH Gregg or Sears store for home electronics and appliances for example — happens every day. The old saw is, “if you don’t ask, you don’t get.” This is not new news, just enabling the web to facilitate the acquisition of new customers and help partner merchants to move goods through a new channel.
Er … ever heard of this new thing called eBay? Or reverse auctions online? Or human nature?
Haggling on and offline has a future as bright and long as its past. Why? Because most buyers aren’t as good at it as they think they are and most sellers know that.
There is nothing new here, and retail stores can only allow so much room for negotiating their way out of business. Does profit still mean anything anymore? The race to the bottom is filled with many former retail stores, and the pile is getting higher!
Local shopping (Main Street) and Loyalty are pretty much a thing of the past, and isn’t that what we all would like to see more of? The future of small business is clouded with uncertainty, and I still see opportunity for a really well run store being successful. in spite of all this high-tech stuff going on.
Upside: Incremental sales. (Potentially) Downside: Lower margin. Commoditizing your own products, services, and staff. (A very bad idea.)
Clearly, for most retailers there is very little upside and I would recommend that my clients not participate.
I don’t like it. It offends my sensibilities, although I used to quite enjoy eBay when it was a true auction.
I will say that there’s also the potential for a quasi-scam. I signed up for Quibids and discovered that I won nothing, and in fact basically burned $60 for the privilege of bidding. I would caution retailers to insure the company they are working with is doing everything on the up-and-up.
The more online merchants can emulate, replicate and/or improve the in-store experience, the better off they will be. The beauty of this model is that it allows a merchant to determine at what price they wish to acquire a customer. With some experience they can see that these customers are or are not loyal and whether their negotiation pays off in terms of customer lifetime value.
Somehow it sounds like you are telling your customers that the MSRP is high!?.
Upside for consumers. Downside for retailers. No car dealer wants the shopper to be able to haggle.
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Are we fast reaching the point where words are not heard? Where the only means of communication is through a keyboard?
Going online to determine who is offering the product for the lowest price changed purchasing behavior because consumers could choose the retailer, the location of purchase from local to online retailer, the delivery method, and price. Providing the opportunity for a retailer to meet or match other prices changes the landscape once again.
One part of the consumer experience not covered in the calculations so far is the opportunity to ask questions, return items, or get defective items replaced or fixed. Consumers may have to choose whether the bargaining to get a low price is worth taking all the risk on product protection.
It’s in our DNA to negotiate. Love the concept, not sure about its staying power. For those that want to let their fingers do the shopping, it works. At same time there is no harm in negotiating on the floor of your Best Buy, HH Gregg or Sears store for home electronics and appliances for example — happens every day. The old saw is, “if you don’t ask, you don’t get.” This is not new news, just enabling the web to facilitate the acquisition of new customers and help partner merchants to move goods through a new channel.
Er … ever heard of this new thing called eBay? Or reverse auctions online? Or human nature?
Haggling on and offline has a future as bright and long as its past. Why? Because most buyers aren’t as good at it as they think they are and most sellers know that.
There is nothing new here, and retail stores can only allow so much room for negotiating their way out of business. Does profit still mean anything anymore? The race to the bottom is filled with many former retail stores, and the pile is getting higher!
Local shopping (Main Street) and Loyalty are pretty much a thing of the past, and isn’t that what we all would like to see more of? The future of small business is clouded with uncertainty, and I still see opportunity for a really well run store being successful. in spite of all this high-tech stuff going on.
Upside: Incremental sales. (Potentially) Downside: Lower margin. Commoditizing your own products, services, and staff. (A very bad idea.)
Clearly, for most retailers there is very little upside and I would recommend that my clients not participate.
I don’t like it. It offends my sensibilities, although I used to quite enjoy eBay when it was a true auction.
I will say that there’s also the potential for a quasi-scam. I signed up for Quibids and discovered that I won nothing, and in fact basically burned $60 for the privilege of bidding. I would caution retailers to insure the company they are working with is doing everything on the up-and-up.
The more online merchants can emulate, replicate and/or improve the in-store experience, the better off they will be. The beauty of this model is that it allows a merchant to determine at what price they wish to acquire a customer. With some experience they can see that these customers are or are not loyal and whether their negotiation pays off in terms of customer lifetime value.
Somehow it sounds like you are telling your customers that the MSRP is high!?.
Upside for consumers. Downside for retailers. No car dealer wants the shopper to be able to haggle.