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These E-Commerce Services Help Consumers Join Forces Sites like Accompany and NexTag pull consumers together and give them a chance to affect prices. That could make the portals less powerful There is a new twist for online shoppers nowadays. Say you want to buy a handheld electronic organizer. Now you can go to a service called Accompany, team up with a whole group of other buyers who want the same thing, and choose the price you want to pay. It works like this: You decide you want to pay $325 for a Palm VII that's on sale at Accompany's site. If enough people also agree to pay that price, the manufacturer will sell it for what you want. The idea is that a group of buyers working together has more power to affect prices than the individual does. It's a demand-driven service -- a wonky term for a new group of offerings designed to help consumers get the products and the prices they want. A whole host of startups, including Accompany, Mercata, NexTag, Deja.com, Respond.com, and Epinions, are playing in the space. And while most of the companies have different approaches to how they accomplish this goal, their aim is essentially the same: Use the power of the Web to pull together consumers from all over who are interested in specific products and services and give them direct contact with sellers or even manufacturers. MORE AGGREGATORS. There are a few different ways they go about this. Some, like Accompany and Mercata, bring together a group of buyers to push down prices on products. Respond.com, on the other hand, puts buyers in touch with sellers to track down hard-to-find goods and services. NexTag helps an individual negotiate with a group of sellers. Deja.com and Epinions act as consumer guides that are launching pads to a group of merchants. These are all different takes on something the portals have perfected: aggregating audiences. The whole idea of portals like Yahoo! and Excite@Home is to provide free services, such as e-mail, chat, and content, that attract millions of people. It's a model that has proved popular: Merchants line up to pay portals millions of dollars to advertise or sell to those audiences. The new group of demand-driven services is aiming to use aggregation as well, and in some cases, these services are taking direct aim at the portals and the dominant e-merchants. Rather than acting as a very broad storefront like Amazon or a general usage service like Yahoo!, the new services have the ability to put people directly in touch with a whole host of merchants and even distributors. That means you don't necessarily have to go to a portal or an e-merchant to find what you want.
Accompany is just one example of the new model. NexTag, based in San Mateo, Calif., is even more interesting because of the integration the service has with online merchants it partners with. It lets buyers name the price they want for an electronics product. Then that proposed price is sent to NexTag's merchant partners, who can do real-time calculations based on inventory and availability and decide whether to accept the offer. Another interesting company is Epinions, a startup based in Mountain View, Calif., that pulls together people's opinions on products -- it's essentially a customer-created consumer-buying guide. For instance, people who have bought a certain type of Saab publish what they think about the car, giving advice to other potential buyers. Epinions' attraction is that it aggregates people who are looking for buying advice. From there, it can branch out into becoming a marketplace that matches up manufacturers or other e-merchants with customers. DAUNTING PROBLEMS. Still, these services face plenty of hurdles. First, the Yahoo!s and Amazons are moving to protect their terrain. Just last month, Amazon announced a service of its own that allows merchants to set up shop directly on Amazon. That means consumers can now find wider selection and pricing without leaving the site. Another key question: Can I trust the opinion of someone on Epinions enough to buy something based on what that person has to say? And while services like Accompany seem to offer the unlimited possibility of hammering prices down, they actually let manufacturers set the lowest price they will accept before the bidding even begins. That means the pricing is actually determined less by the buyer than by the seller. Then there is one really huge problem for these services: Keeping track of price and product changes from thousands of merchants and manufacturing partners could be incredibly daunting. So at this point, the power of aggregated demand only goes so far. The new services are fascinating because they play on what the Web is really good at -- bringing together people who share common interests, mining the individual's knowhow, and tracking price fluctuations. If they can overcome the sizable obstacles, they will prove to be home runs.
Green covers the Internet for Business Week in New York.
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 Heather Green covers the Internet for Business Week in New York WEB POINTERS Click here to visit the sites mentioned in this column: Accompany Mercata Deja Respond Epinions Excite Yahoo! Amazon | |||||||||
