By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
Andrew Scarbrough describes PriceWaiter as “the child of an online retailer and conversion optimization agency.” You can also say it is a “name your price” e-commerce add-on.
“What Priceline did for travel on its own site, we set out to do for any retailer, selling anything, anywhere on the web,” Scarbrough adds.
The Chattanooga-based start-up, which also has a presence in Bellingham, Wash., north of Seattle, is focused on helping retailers convert online shoppers into online buyers.
“We had been dealing with the pain of other online retailers,” Scarbrough says in reference to SmartFurniture, another Chattanooga company with which he has been involved.
He worked at SmartFurniture every summer while attending the University of Tennessee’s Knoxville campus and joined the team full-time after graduation.
Later, Scarbrough and Stephen Culp, Founder of SmartFurniture, founded their first online marketing and conversion-focused company, which they named Delegator.
“It was an agency focused on e-commerce and conversion rate optimization,” Scarbrough explained. “Delegator was built to work with retailers to help them bring more customers to their sites. We learned a lot about both customer behavior and retailer needs at Delegator, which led to the birth of PriceWaiter.”
About three years ago, Scarbrough and Culp began exploring a simple but important question: “How many people going to our clients’ websites are leaving due to price?”
Their exploration led to a logical follow-up question: “What would happen if we let buyers set their price?”
They tested their thesis with SmartFurniture and a few of Delegator’s clients, concluding they were onto something significant: a software product that would facilitate a private, secure, one-on-one dialogue between shopper and merchant about price.
How does PriceWaiter work? Retailers install the software that runs in the background of their e-commerce site, and present a “Make an Offer” button on the product page, usually immediately adjacent to the “Buy Now” button. Shoppers who wish to offer a different price on the product are asked for their email address, their zip code (to calculate shipping costs), and for their price offer. The retailer then has the option to accept the offer or make a counter offer. Once the offer is mutually accepted, the shopper can checkout and the product ships as normal.
“One in five offers turns into a final sale,” Scarbrough says, describing PriceWaiter’s clients as “a very eclectic mix of retailers.”
They range from sectors you might expect like jewelry and electronics to more unusual ones like security cameras, aftermarket car parts and even cigars.
“What we love most about this product is that it’s truly a win for both sides of the transaction,” Scarbrough says. “Retailers get to maintain that relationship with their customer and capture the sale, while the shopper gets to buy the product from the retailer they prefer at a price they can be comfortable with.”
Scarbrough moved to PriceWaiter full-time about a year ago, soon after the Founders secured seed funding from the Lamp Post Group.
PriceWaiter is finalizing a bridge funding round that is led by the Chattanooga Renaissance Fund with participation by the Knoxville-based Lighthouse Fund as reported earlier this year on teknovation.biz. That round has limited availability remaining. Next up is a Series A round in early 2016.