INTERNET ENTREPRENEUR Dylan Collins has launched a new e-commerce business Gruupy.com which offers cut price consumer electronics for shipment around Europe.
Each day the site features a single product at a price lower than mainstream online retailers, provided a minimum number of people agree to buy at that price. Recent deals have included an Xbox 360, a 22-inch Sony Bravia TV and an iPhone charger case.
“This is stuff you potentially don’t need,” admits Collins. “Gruupy is for people who buy a lot of devices and the core audience will be males aged 24 to 44.”
The deal of the day model is very similar to Woot, a US site that was acquired by Amazon.com earlier this year for $110 million (€79 million).
The previous firms founded by Collins – Jolt Online Gaming and Demonware – were in the computer games industry, but he says Gruupy is similar because it is also a “consumer internet” business.
“The biggest challenge for us has been building up the networks so that we can get supply of stock,” said Collins.
“We are selling excess stock, refurbished items and remaining stock from retailers which are often in amounts that are too small for big retailers to handle.”
He says one of the main challenges establishing the business across Europe was delivery costs. Gruupy has partnered with a Dutch company which handle the logistics of getting the products to customers. In addition to the price quoted on the website, members are charged a €15 flat shipping fee but Collins says he hopes to be able to reduce the charge in the coming weeks. He says he will not be taking a full-time role with Gruupy where he is chairman, but he believes it still has the potential to be a big business. It will launch in the US early next year.
The company is backed by Collins’s own money. He sold his original business Demonware to Activision for over $10 million in 2007 and last year Gamestop, the world’s largest computer game retailer, took a majority stake in Jolt Online Gaming where he remains chief executive.
Collins says he has been surprised by the eagerness of traditional retailers to work with Gruupy to shift excess stock.
“The internet is a huge challenge for retailers because people will look for the cheapest price – it’s as simple or complicated as that,” says Collins.
“The biggest challenge for retailers has not been eBay or Amazon but tabbed browsing which lets people search for a product on multiple sites and compare the prices.”
