Even as Jet.com prepares for its highly anticipated launch next week and Amazon looks to win big with its Prime Day faux shopping holiday today, there’s a new marketplace player in the room.
Dallas-based startup Joinem is looking to attract shoppers to a model which taps the power of social influence-driven mass buying to enable discounted pricing on thousands of popular items.
Headed up by former Priceline.com CEO Rick Braddock as executive chairman and former Gogo ecommerce director Darren Waxman as CEO and co founder, Joinem aims to become the Priceline of retail ecommerce.
The basic premise involves analyzing social data to find the hottest products people are talking about, scouring the Internet for the lowest prices and undercutting them through volume purchases directly from suppliers. The company makes its money by pocketing the difference between its purchase and sale prices.
Some major brands onboard so far include Samsung, Quisinart, Apple and Coleman; the company would not disclose how many vendors were participating in Joinem. There are 13,000 products available, and Joinem’s ecommerce marketplace has access to 1.5 million total products, a number that is expected to grow, Waxman said.
“Our philosophy is, let the consumer guide us to products of interest,” he said. “We’re creating a community-powered digital store, and building out our vision of connecting socially-minded consumers, who are the predominant force in today’s retail marketplace.”
The way it works is Joinem members create wish lists of products on social media and share them with those in their networks. By completing their profile and inviting others to join, they earn “Joinem bucks” which can be redeemed for purchases. As more lists are completed and the size of the Joinem community grows, the data created allows Joinem to create groups of buyers and order products in bulk, with buyers notified by email and social notices that they’re available.
“We have a built in mechanism, which we call WePower, an algorithm that allows us to scrape online for the lowest price constantly, and beat it by up to 20%,” Waxman said. “We do that by locking in a volume of customers, working with vendors and manufacturers directly to secure savings and pass them onto customers. It’s not about the volume on an individual deal, but as a whole, vendors are working off the total volume generated by our community’s buying power.”
Waxman would not disclose the number of Joinem members, saying “it’s very early days” and that Joinem has been operating in a limited capacity. “We do have thousands at this point, and we’re scaling up aggressively,” he added.
Unlike Amazon with its massive network of fulfillment centers and Jet.com with its two DCs, Joinem uses a 100% drop shipping model, with sellers getting orders as soon as a consumer clicks the buy button, and handling the fulfillment themselves or through their partner. “We feel it’s important to make sure customers don’t have to wait for the deal to end to get their merchandise, by having it leave the warehouse as soon as possible,” Waxman said.
Another differentiator, Waxman said, is the fact that Joinem doesn’t charge an annual subscription price like Amazon Prime ($99), Jet.com ($49) or Walmart’s new Shipping Pass program ($50). “Consumers don’t want to pay extra or hidden fees, or starting with a negative balance on the account, paying an annual fee for the privilege of buying something at a discount,” he said.
And unlike Jet.com, Waxman said, customers aren’t making tradeoffs like waiving returns, opting for longer shipping times or bulking up orders to lock in greater savings. “We keep it very transparent between us, the consumer and the vendor and pass the savings along,” he said. “They’re bringing the social influence that grows the size of the community and helps us select what items to order. We’re incentivizing sharing behavior they’re already doing.”
Christine English, a divisional merchandise manager for Woot.com both before and after its acquisition by Amazon, is Joinem’s senior vice president of merchandising, tasked with adding lots of merchant partners. “She’s brought along many of her vendor relationships from the past 25 years,” Waxman said. “When she speaks, vendors listen.”
In terms of the funding arms race, Joinem ($5 million) is way behind Jet.com ($200 million plus), which has signed up more than 1,600 sellers ahead of its launch. But Waxman is confident his venture will succeed based on positive feedback from both consumers and sellers who have interacted with the site.
“With the data we’ve shared with (sellers), we’ve been very transparent,” he said. “We believe it’s going to be a more accurate way for them to forecast demand, as the size of the community grows and the social wish list content becomes more robust. It will be a very helpful forecasting tool in terms of how many products they’re sold in the Joinem channel.”