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Taking an idea inspired by Dutch tulip merchants - instead of getting more expensive, everything at auction
gets cheaper by the minute - Bates College junior Elliot Moskow thinks he could unseat eBay.
His company, Pricefalls.com, launched last month. Monday morning, it had 109,272 items up for sale.
Unlike eBay, where goods start at an opening bid and ratchet up in price as people compete to buy them, Pricefalls.com items start high and slowly shed dollars and cents to some pre-determined low. Bidders sit on their hands and wait to buy at a price that's considered a good deal - but not so good that someone else scoops it up first.
The Web site's nerve center, for now, is a first-floor apartment a few blocks from the college. Another Bates grad just moved to Las Vegas to set up corporate headquarters. "Aside from classes and homework, I put every waking hour into this that I have," said Moskow, 21, an economics major and now, CEO.
The idea was born last year out of his frustration at setting up a virtual storefront on eBay. (He'd been mining police auctions for finds like jewelry that he could buy low and sell high.)
The bulk of the items for sale now have been listed by Pricefalls.com itself, the result of behind-the-scenes agreements with retailers. "A lot of other auction sites have failed because they were purely relying on organic growth," Schaefer said. Those would-be buyers logged on, saw a few thousand things for sale and kept going. "It wasn't intriguing to them, it wasn't enticing," he said. As more individual sellers start logging on and using the service, Pricefalls.com will scale back those arrangements.
On Monday, it had items like a Sony VAIO desktop computer originally listed at $1,999 down to $799.85, Disney's "Theme Park Sing-a-long" CD originally listed at $17.99 down to $16.73 and Burberry Touch eau de toilette spray originally listed at $75 and down to $51.23.
Prices drop every 15 seconds in varying increments.
Moskow, from Florida, said the site has logged sales already in jewelry, comics and fragrance. He declined to name Pricefalls.com's board members or the "group of very influential advisors" noted in promotional material but said his father, Las Vegas physician Eric Moskow, has been its chief backer. That made Vegas an easy pick for headquarters.
He estimated start-up so far at $50,000 with a national marketing campaign planned in the next two to three weeks. "The term 'Dutch auction' will become like Google or MySpace," predicted Schaefer.
Bates College economics Professor Dmytro Zhosan, who teaches Moskow in a game theory class, said Dutch auctions have the advantage of potentially bringing in more money for the seller and creating a fun environment for the buyer. Instead of a race to the top price where people with less money get shut out early, it's a race to the bottom price for everyone. "I think the idea is very good. It's a tough market to enter," Zhosan said.
How it works: Pricefalls.com
Still confused? Check out the online tutorial at Pricefalls.com
