|Headquarters||Las Vegas, Nevada, U.S.|
|Key people||Elliot Moskow (Founder, Chairman, and CEO)
Peter P. Schaefer (CIO, Executive Vice President)
Chad Casey (Creative Director, Marketing Director
David Hall (Lead Developer)
Ryan D. Rollo (Director of Customer Relations)
|Products||Online auction hosting, Electronic commerce, Shopping mall|
Catch It While You Can.
Where Your Bid Wins.
|Type of site||Online auction|
|Registration||Required to buy and sell|
Pricefalls, LLC is an American Internet company that manages Pricefalls.com, an on-line reverse auction website that is based on a Dutch Auction or descending pricing model. Pricefalls acts as a sales channel for small- to medium-size businesses who wish to sell their products in an online marketplace where prices constantly decrease. The company was founded in response to user frustrations with the eBay model, with pronounced emphasis on customer service and dedication to the sellers who use the site.
- 1 Origins & History
- 2 The Listing & Sales Process
- 3 Fees
- 4 Service Marks and Slogans
- 5 See also
- 6 Notes
- 7 Bibliography
- 8 External links
Origins & History
The idea of Pricefalls was first imagined in 2008 by Elliot Moskow, an economics major from Bates College, located in Lewiston, Maine. Out of a need to earn extra cash that summer, Elliot obtained confiscated jewelry from police auctions in order to sell them on the popular shopping site eBay. He started with a few rings, some of which sold to buyers with Nigerian shipping addresses. Elliot had received a fraudulent PayPal receipt from a fraudulent user, and additionally had paid fees to list his items, losing money. As a result, Elliot permanently discontinued his activity on eBay and began to think of alternative ways to sell online.
After returning to Bates, Elliot learned of the Dutch Auction and its application in the tulip industry. He then sought out other students capable of technically executing a reverse auction website. His search led him to a partnership with Bates alumni Peter Schaefer and Chad Casey, the creators of a small web media company called Lautus Design.
Use of the Dutch Auction Model
In a Dutch Auction, the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined reserve price (the seller's minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a "clock auction" or an open-outcry descending-price auction.
This type of auction is convenient when it is important to auction goods quickly, since a sale never requires more than one bid. Theoretically, the bidding strategy and results of this auction are equivalent to those in a sealed first-price auction. The Dutch auction is named for its use in the Dutch Tulip Craze.
Pricefalls.com has grown consistently since announcing its public beta in September 2009, after successfully raising USD $400,000 in seed funding from private investors. Although the name "Pricefalls" refers to the descending price as the basis for the business model, recently they have expanded the platform to allow for fixed price listings as well.
As of August, 2010, the internet marketplace is used by upwards of 175 businesses actively listing their inventory. They serve businesses by creating online storefronts that prominently display the business's logo, product listings and, optionally, a phone number.
Pricefalls.com has been listed as #96 in a list of The World's 230 Most Exemplary Websites.
As of January 1, 2011, Pricefalls LLC has added Matthew Twitchell, as Director of Inventory Management.
The Listing & Sales Process
Selling on Pricefalls
When selling an item, users proceed through a six-step process, prompting the user to:
- Choose between creating a Dutch Auction or a Fixed Price Sale.
- Choose a category for their listing and up to 3 subcategories.
- Enter a listing title, brand name, condition, and a detailed description of the item.
- Set their pricing. If the merchant chose the falling price method in step one they are prompted to enter the price ceiling (the most they think someone would be willing to pay), and price floor (the least they are willing to accept), along with a listing duration, and an optional duration that delays the falling of the price (“Catch It Before It Falls” duration). If the merchant chose the fixed price method in step one they simply enter the fixed price that they would like to list the item for. Sellers may also upload up to seven product images, and choose extra exposure options that they would like to add to their listing.
- Choose how they would like to accept payment for their items, and provide detail into applicable return policy.
- Review the listing before submitting it to appear on Pricefalls. Upon submitting the listing, the auction will begin.
For falling price auction listings the price will start off at the price ceiling, and drop at a constant rate until the item is purchased or until the time interval at the price floor has expired. The “Catch It Before It Falls” duration is before the listing duration, and marks a period of the Pricefalls sales cycle during which the item remains at the top price (price ceiling. The Catch it before it falls period allows consumers to purchase a product they really want with little competition. It also allows the merchant to experience the most profitable sale possible.
Buying on Pricefalls
Buying on Dutch Auctions
Pricefalls enables consumers to purchase merchandise that has been listed using the Dutch auction by using one of two distinct methods: “If it Hits” bids, or “Catch it Now”.
“If it Hits”: When bidding on Pricefalls, users can set a price that they would like to pay for an item. If the price falls to the set bid without anyone purchasing it first then the item is automatically purchased. In the case of a multiple quantity listing, the highest bids win in the order of magnitude.
“Catch it Now”: As the product price is falling buyers may also choose to purchase an item right away. To purchase an item at its current price buyers can click the “Catch it Now” button to finalize the transaction and the quantity purchased is taken off the market. Subsequently, the price falls on the remaining quantity until the maximum quantity is sold or the price floor is reached.
Buying on Fixed Price Listings
Prices on fixed price listings remain the same throughout the auction. Buyers can simply purchase these items at their fixed price.
Payment is made directly from the consumer to the business via one of two currently available payment gateways, Authorize.net or PayPal. When a buyer views an item detail page and clicks “buy”, the buyer is automatically redirected to the sellerʼs PayPal and is then able to submit payment. Buyers can submit payment using their own PayPal account or via credit card. The buyer receives a receipt generated from PayPal and also a confirmation from Pricefalls that the item has been successfully purchased.
If a buyer has made a bid on an item and has won, the buyer can submit payment for the item by looking in the “Won Items” folder in “My Account”. The buyer is then directed to PayPal (or Authorize.net) to submit payment.
In order to link buyers directly to a sellerʼs payment gateway, the PayPal Id (email associated with the sellerʼs PayPal account) is imputed into the payment method field upon listing. This is done in both individual listings and bulk listings. In a bulk listing, all items are placed under one payment gateway, whereas in individual listings, payment options are done on a per item basis. Stores select their “Viable payment options” upon setup. The form of payment that a store accepts is displayed on the store page under the “Policies” tab as well as in every item detail page under the “Payment Methods” tab.
Although uncommon, in some circumstances a seller may not be able to accept payment. In some cases, Pricefalls is willing to accept payment for these companies as a dropship relationship.
Pricefalls derives revenues from sales commissions collected from merchants upon product sale. Commissions are designed in a sliding scale model, whereby percent-based fees decrease nominally as product prices increase. These product prices fall into three ranges, each of which is associated with a percent value fee. The final value commission is a sum of the applicable fees accumulated within each price interval.
Service Marks and Slogans
Pricefalls, LLC has proprietary rights to its business name, “Pricefalls”, the Pricefalls.com logo, and the slogans “Where Your Bid Wins” and “Catch It While You Can.” The corresponding serial numbers for the service marks are 77609332, 77609341, 77609698, and 77840574. The United States Patent and Trademark Office (USPTO) issued a Notice of Publication for the “Pricefalls” logo, (Serial #77609332) and for the ʻPF” logo, (Serial #77609341); for the slogan “Where Your Bid Wins”, (Serial #77609698) on March 24, 2009; and for the slogan ”Catch It While You Can”, (Serial #77840574) on March 22, 2010; In order to check the status of the applications enter the application serial numbers at the following URL: http://tmportal.uspto.gov/external/portal/tow.
- "Meet The Team" Pricefalls.com. 2010-05-05. Retrieved 2010-08-03
- "eBay Gets New Competitor" Fox Business.com. 2009-12-22. Retrieved 2010-80-09
- "About Us" Pricefalls.com. 2010-05-05. Retrieved 2010-08-03.
- "Let's go 'Dutch': Auction site seeks lowest bidders" WalletPop.com. 2010-03-11. Retrieved 2010-08-03
- "Bates Graduate Creates Site To Save People Money" WMTW.com. 2010-07-01. Retrieved 2010-08-03.
- "Pricefalls Scores Seed Funding, Launches Online Auction Site In Public Beta" TechCrunch.com. 2009-09-17. Retrieved 2010-08-03.
- Liu, Wen, ed. 復制互聯網--2010全球最值得模仿的230個網站 劉偉,文. 1st ed. Tsinghua University, 2010. Print. ISBN 9787302225027
- "Fee Structure" Pricefalls.com. 2010-05-05. Retrieved 2010-08-03.
- Liu, Wen, ed. 復制互聯網—2010全球最值得模仿的230個網站 劉偉,文. 1st ed. Tsinghua University, 2010. Print. ISBN 978-7-302-22502-7