Waiting for the right price at the right time online
SCI-TECH SCENE | Online shoppers bid, then watch for cost to drop
Hannah Sull knows a bargain on Chanel perfume when she sees it.
The 20-year-old student at the School of the Art Institute of Chicago snagged the luxury perfume for 20 percent less than it was listed at Neiman Marcus at bargain Web site Pricefalls.com.
(Jean Lachat/Sun-Times)
• • Just browsing? Browse the various categories on the site to find the items you want.
• • Know what you want? If you have a specific item in mind, type in the product details (i.e. the model number for an HDTV) and select 'All Categories' from the search box's drop-down menu.
• • Do a quick comparison. You'll probably have tons of ''Black Friday'' ads and fliers lying around.
• • Name your price. Decide what you feel is a good deal. Set your own low price, and when the bidding starts, the price will continue to fall until it reaches the winning bid.
• • Don't fear the competition. But if you do, you can purchase the item during a "Catch it Before it Falls" period, and buy the item you want at the price it was listed for.
Despite a tight budget, you can still check off everything on your list this holiday season. Elliot Moskow, CEO of Pricefalls.com, provides for following tips for getting the best deals online this year:
• • Know the item's retail price. Whether you do your research online or in-store, know the price that the item retails for.
• • Use a variety of online shopping sites. Most shoppers know eBay, but there are many other auction sites and 'mom and pop' online shopping sites that feature great deals.
• • Look at a site's pricing model. Be knowledgeable about the different types of online shopping sites available.
• • Check your tech for upgrades. Is it time for you to install the next version of Firefox? We all procrastinate, but make sure you install any needed updates before online shopping.
• • Shop in advance to save more. One of the biggest mistakes online shoppers make is waiting until the last minute for holiday shopping. The earlier you shop, the better your chances are of finding the best deals and not incurring extra charges.
• • Keep records of your purchases. It's not uncommon to have a question about a shipment or purchase after your order. You can create a separate folder in your e-mail inbox and label it "Holiday Receipts." That way, you have all the information you need in one easy-to-find location.
Sandra Guy
If you have a tip for saving or making money, share it with us. Write to psmith@suntimes.com
Pricefalls, the brainchild of 21-year-old college senior Elliot Moskow, lets sellers list their merchandise for free and works on the Dutch auction process: The price of the merchandise falls until a buyer selects the price he or she believes is the perfect buy. The buyer may also submit a price he or she is willing to pay during the auction, and if the item falls to that price, the consumer is notified and wins the auction. The buyer is asked to pay immediately, like most e-commerce checkout procedures.
Sull heard of Pricefalls.com from her brother, who is a classmate of Moskow at Bates College, a private liberal arts college in Lewiston, Maine.
"I had never heard of anything like [the Dutch auction]," Sull said.
She became enthralled, and she enjoys the element of surprise.
"I have a lot of things on my waiting list. I'm waiting for the prices to start falling," she said.
Indeed, such Dutch auction Web sites appeal to people who enjoy "the thrill of the game," said business and economics Professor Dmytro Zhosan, who assigned his class at Ripon College in Wisconsin to conduct a case study on Pricefalls.com.
"It will attract people who like the adrenaline rush -- do I bid now or wait 10 minutes?" said Zhosan, who advised Moskow on his business plan.
Moskow, the son of Dr. Eric Moskow, who runs health-care delivery company Outcome Based Delivery System and helps doctors manage their practices, started the Web site because of his own frustrations at finding online bargains.
"I was trying to save money as a college student. I also wanted to buy something cheap and then resell it on a more prominent site," said the younger Moskow, an economics major.
Moskow credits his dad and his mom, Ricki, with providing his start-up money and emotional support. His dad also advised him on business steps, ensuring that the younger Moskow had a sound plan before he started telling anyone about his Web site.
The reverse-auction process has also fueled a Chicago-based start-up company, Transparent Financial Services, Transfs.com.
Sean Harper, a 2008 graduate of the University of Chicago Booth School of Business, played a key role in backing online retailer TSS Radio (tss-radio.com), a Noble Square-based seller of Sirius XM satellite radio equipment.
Harper started looking at the company's bills for processing its customers' credit-card payments and realized that the system was indecipherable. That's partly because different kinds of cards are charged different rates, making a rewards card different from a non-rewards card, for example.
So Harper, fellow Booth School alum Joshua Krall, and part-time Booth MBA student and Tech Cocktail co-founder Eric Olson set up a company that would provide merchants a free service allowing them to compare card-processing rates.
"We decided we could write software that could put into aggregate dollar terms, 'This process will cost you X dollars a month, and that one will cost Y dollars a month,' " Olson said.
The system lets pre-screened card processors bid for a company's business.
"The average cost savings is about 40 percent" for companies that pick their card processors through the bid system at transfs.com, Olson said. That's about one-half to 1 percent of a typical company's total sales, he said.
"We think the procurement of products and services for the next few years will be a 'pull' rather than a 'push' mechanism," Olson said. "A business owner gets to say, 'Send me your bids, and I'll pick.'"