BuyThePrice.com, a Hyderabad based ecommerce portal dealing in Consumer Electronics and Appliances, has raised an undislcosed amount of money from a clutch of angel investors that include former Microsoft India MD Rajan Anandan, Rehan Yar Khan, Sunil Kalra and among several others. BuyThePrice was founded by Ranjith Boyanapalli, former Head of eTail for e-commerce co eYantra, as well as Tharachand Suryadevara and Jagdish Kothapalle.
Around 30% of the funds raised, a company spokesperson informs MediaNama by email, will be used in marketing. They also intend to open up an office in Mumbai (this month), and Delhi (by March 2011). The business was launched in March 2010. BuyThePrice currently has a 14 member team, which they’re looking to ramp up to 25 in the next two months. Marketing and SMO is outsourced, while Customer Care and SEO will be inhouse.
The Customer Proposition
Buytheprice.com operates on a decreasing price model which encourages group buying: the price of the product on sale goes down as more and more buyers join in, and it unlike standard group buying businesses, it doesn’t need a minimum number of buyers for the deal to become active. Customers have an incentive to spread the word about the deal, since the price keeps going down as the number of buyers increase. The site prominently displays the discounting pattern. But how does this of decreasing price model affect pricing? BuyThePrice claims that brands increase discounts as demand increases, and discounts provided are transferred in their entirety to customers. BuyThePrice earns its revenue from the brands it sells, on every transaction.
Readers must keep in mind, though, that the discounts displayed are on the MRP (Maximum Retail Price), and most electronic groups are sold at a discount to the MRP anyway. For example, BuyThePrice currently has an auction for a Nikon Coolpix L22, at Rs. 5650, a 19% discount to the MRP of Rs. 6950. We checked on Ebay.in, and the same camera is available for Rs. 5500. If it’s just about the price, then consumers will figure this out sooner or later.