With a deluge of group buying websites saturating the Australian market, entrepreneur Sebastian Langton has attempted a twist on the model.
His new website Wyngle uses the concept of “ratio buying”. This means that each of the 350 products listed on the site has a ratio – such as one in six or one in three.
Buyers who commit to buying the product then have a one in six, for example, chance of getting the product for $1. Everyone else will pay the standard price.
Langton tells StartupSmart how he came up with the idea.
Can you explain what your business’ proposition is?
Wyngle is here to provide a little excitement into the world of online retail, to give the consumer an unmatched opportunity and the supplier a chance to protect their pricing point without losing sales.
This gives retailers the ability to create a strong buying incentive without the need to discount which can help Australian businesses compete with overseas retailers.
What has made you certain that the surge in group buying has changed consumer habits for good?
I believe that group buying has changed consumer habits for the worse, because people are expecting discounts everywhere they go and this isn't possible if we want quality and sustainability.
Having said that, I believe consumers are becoming smarter by understanding that discounts are less compelling because the value isn't there.
Those who have been burned are now starting to rethink the value of a bargain and its longer-term effects – like the old saying goes: buy cheap, buy twice.
What gave you the idea for the business?
Online discounting has become a huge problem in the industry and for too long a discount seems to have been the only way to encourage sales.
The idea was spawned from wanting to challenge this space and provide a more creative alternative for retailers to market their product without having to harm their price point in the market.
How did you fund the business?
Initially I self-funded the R&D bit by bit using whatever money I could save. This quickly led me to run into debt in order to keep the ball rolling.
At that stage I knew nothing about capital raising in this country and it wasn't until a friend with a start-up business put me in touch with his investor that we were able to secure some seed capital.
We've also taken on some additional capital through our network of people who just loved the idea so much they had to be involved. It has been a rollercoaster ride with more ups, downs, twists and turns that I could ever have predicted. The crazy thing is, it's only just begun...
How have you marketed the business?
As an online business, we've put most of our attention into SEO/SEM to drive traffic to the site and PR to get the word out there.
We've also had some tactical activities such as handing out business cards with a $1 coin stuck to it, with the question "What could you buy for $1?" on there with the web address.
This worked quite well to get some initial traffic and was an effective way to communicate the value of Wyngle by tying back to the concept of the $1 purchases.
What has been the hardest part of starting up?
Just to keep fighting, no matter how tough it gets mentally or physically. I'm sure you've heard this story a million times – late nights, stress, worry, tears, etc.
Be prepared – it’s all very real. Support is hard to find, you will feel alone, scared, depressed, desperate, exhausted and you will feel like giving up.
My advice is get some sleep, take a break and come back fighting.
Many fighters get knocked down and it’s the ones that get back up that end up winning in the end.
How are you looking to differentiate your business?
We don't support the discount culture, we are here to provide new and exciting ways for the retailer to market their goods and provide an incentive for the consumer to purchase.
What are your plans and ambitions for the business?
I'd like to see this model replacing the need to discount and hopefully inspiring others to be more creative when it comes to providing an incentive to the consumer. Discounting surely cannot be the only way.