Not Just Another Web Retailer

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Social Networking Element

Based in Madison, Wis., Alice aims to make money through advertising programs such as coupons, loyalty programs, or keyword sponsorships, betting that its reams of data on shopping habits and tastes will be highly desired by manufacturers. "It's a service, like Netflix, not a store," says Wiegand, who won't project sales but expects 250,000 customers in the first year of operations. (Unlike Netflix (NFLX), however, consumers don't have to pay to subscribe to the site.)

The site will also include a social networking element where users can upload pictures of their actual cupboards and chat about them in an area called "Me, My Shelf, and I." A "reorder queue" on the site means "you'll never run out of toilet paper again," the company claims.

Retail and consumer product experts say Alice.com's business model is intriguing but depends on participation from the branded manufacturers, who are thus far not entirely convinced. McGuire and Wiegand admit that roughly half of the products on the site come from manufacturers that have not yet signed agreements with Alice, meaning that Alice will have to pay wholesalers for those products. If those manufacturers are not on board in the months after the launch, their products could eventually be dropped, the founders say.

Some Nervous Manufacturers

After hearing about Alice.com, Ken Harris, a longtime consultant to consumer-products makers, says he "wouldn't bet on it," as Alice's success depends too much on the support of the branded players.

Alice's founders feel the consumer-product manufacturers will come around, eventually. "The [consumer product] guys are nervous about being retailers, because they are competing with their own partners," McGuire says. So nervous, in fact, that Wiegand and McGuire can't mention any big ones by name.

And if retailers can act like manufacturers by making and marketing private-label or store-brand goods, Alice's founders argue, why can't manufacturers turn the tables and act like retailers? There are signs this is happening already: Earlier this month, Procter & Gamble announced it is getting directly into the retail business with its acquisition of retailer The Art of Shaving.

Six-Item Minimum Order

One small manufacturer that would speak is Radius, a Kutztown (Pa.) maker of high-end toothbrushes that does about $9 million in annual sales at outlets like Whole Foods (WFMI), Target, and Bed, Bath & Beyond (BBBY). Saskia Foley, executive vice-president of sales and marketing, says she's interested in the prospect of capturing additional consumers through Alice.com. "People in general don't think about buying toothbrushes in advance," she says.

One shopper who has used the site is impressed. Kristin Chase, a blogger in Atlanta, says she was intrigued by the concept, especially as she had just run out of toilet paper the day she was contacted by Alice.com to participate in the beta test. Chase says she found the site easy to use, and "it made my life a little more organized." She's not wild about the six-item minimum order, though, and says Alice's success depends on shoppers "embracing a new way of shopping."

Boyle is deputy Corporations editor for BusinessWeek.

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