Group-buying websites allow consumers to take advantage of deals offered by local businesses. The deal gets activated only after the minimum quantity of deal vouchers has been sold. Current group-buying companies require merchants to provide discounts of at least 50% and keep as commission 50% of the proceeds. There is no flexibility to optimize pricing based on demand and the model alienates the most desirable merchants, ultimately reducing consumer appeal.
Spinzo optimizes the group-buying concept with a fundamentally different approach that is both exciting for consumers and sustainable for merchants. Merchants specify a “sliding scale” price range for a targeted product or service. Users bid the most they are willing to pay for a deal and the price falls throughout the day as cumulative bids meet the predefined thresholds.
NBIF: How does Spinzo compare to group buying companies that people are already familiar with?
Elmajian: The company most people are familiar with didn't start with the business in mind. They said, 'Hey we'll give you seventy per cent off a slice of pizza if we get ten people. In many cases the business ends up losing money. We go to businesses and ask, "what works for you?" If we were to sell 20 of your items, then 50, 100, 200, what kind of discounts can you offer for each level of sales? They craft their own pricing, and to the user, it comes a dynamic marketplace where the price literally depends on how many people want to buy it. It's dynamic pricing and it never goes below what the merchant agrees to sell it for. Spinzo earns a portion of the sale only.There are no other fees for the merchant.
NBIF: How did you get started with all of this?
Spinzo: I was working for McKinsey & Company in New York City, after finishing my engineering degree at Waterloo, doing technology consulting for Samsung, Condé Nast, and Rogers. My heart has always been at the intersection of business and technology. I left McKenzie to venture off on my own. I moved back to New Brunswick where it's familiar, where people will hear you out. Spinzo was one of a few ideas I had. So I created a prototype application myself, and I showed people. I showed it to my parents, who are small business owners in Moncton, for the business side, and I showed it to my friends, who understand the consumer side. I asked them, "if this was available, would you use it?" On both sides I got a yes.