oBaz's Brian Ficho: "We're Entirely Community-Driven"

There are a lot of bizarre sites in the world. Lately, there have been a few bazaar sites as well. But only one combines the art of haggling with the benefits of crowdsourcing: oBaz.com. “The group is very important,” said Brian Ficho, the founder and CEO of oBaz. “We're entirely community-driven, so we do put the onus on our users. It's kind of up to them. They can't join a group with one person and expect us to haggle them an offer. That's just not gonna happen.” The key, Ficho says, is to get a large group together. “If they do get a big group – obviously the bigger the group, the more leverage we have – what we offer retailers is kind of unique,” Ficho said. “We don't charge retailers anything. We just say, ‘Here's all these people that want to buy something that you want to sell, and all you have to do is give them something compelling to get them to come buy it and we'll push it to them for free. That's part of our pitch.” Granted, that doesn't mean that every company will offer a discount. During our discussion, Ficho spoke about the challenges of trying to acquire a product when there is no margin. “In that case we look for package offers – you know, free gifts with purchase, things like that,” Ficho explained. “Clearly if you want an iPad, Apple AAPL is not going to give us a discount on those.” Despite hitting a few roadblocks with select products, Ficho said that oBaz has been very successful “in getting unique things you would never be able to get on your own.” “We sell products that manufacturers won't let retailers discount,” Ficho said. “But because we use this private sale model, we can kind of get around that. For instance, there's a pair of shoes that a manufacturer might not let a retailer promote at a different price. Our promotions are all private, so once the deal goes live, only the group members can access it. It is very beneficial to retailers, manufacturers, to everyone. It's not like they're posting on Google GOOG, trying to compete for the lowest price or whatever it is.” Getting LinkedIn for Better Deals With regard to how much consumers can save by using oBaz, Ficho said that it depends on the product and the category. “For something like sunglasses, we've gotten 50% off,” Ficho revealed. “We've done 80% off. Electronics are harder because margins are tight. Things like a PlayStation are actually sold by Sony SNE at a loss. So there's just no margin on a lot of things. But we literally get on the phone, we find people on LinkedIn LNKD who work at certain places. We go pretty nuts trying to find the best prices. Stuff ranges from 10% off to 80% off. It all just depends on the product.” The Consumer Always Wins To show the level of saving that oBaz can provide, Ficho used a $900 Nikon bundle as an example. “We saved $300 on this camera and two lenses and a stand,” Ficho said. It retails for $900; we got it for $600. So we got a unique promotional code. And basically what we do is we sell those unique promotional codes for a small percentage of savings. So if you're happy with that offer that we haggled, you can pay $20 to unlock it or whatever – it might be $1, it might be $10. It's a small percentage of the total value saved.” In the event that oBaz can't find a really good deal, “we'll just push the best offer we find to the group members for free,” Ficho said. “One thing we did with the PlayStation was get a $50 gift card through the retailer we used.” While the retailers that work with oBaz are free to reveal their identity, Ficho said that he is choosing to keep them a secret at this time. Only those who join the group of a particular item will know which retailer is involved. Customer Acquisition Costs In general, Ficho said that every company pays a customer acquisition cost. “They have to pay to get someone to come to their website or come to their store and [make a purchase], whether that's through ads or branding or online marketing. Whatever it is, they're doing something,” Ficho said. “Our approach is kind of unique. Pretty much every marketing platform out there charges the business to get a new customer. We just say, ‘Here are all these customers.' So basically, Google captures intent. We capture intent as well, except we don't charge businesses to reach out to those customers that express intent.” Ficho said that most businesses have been very receptive to the idea. “Clearly [for] some people this isn't their thing or they don't quite get it,” Ficho said. “But we kind of learn how to pitch it correctly, businesses have been very receptive. It's a great way for them to reach new customers at no cost.” An Idea is Born “I came up with the idea [for oBaz] about two years ago now,” Ficho said. “It was very raw. It was just an idea. We find all these people that want to buy the same thing, you know, we can get something. The concept has been around for a while. In China it's big. In the ‘90s it was tried here, but that was kind of before the social web existed, so it wasn't really viable. People didn't really understand how they could connect with others online.” But they understand now. “When consumers want to buy something, [the retailer] shouldn't have to go out and market a big sale,” Ficho said. “Consumers should just be able to tell that retailer, ‘We all want to buy this right now.' And those consumers can give them the offer, [the retailer] can save on marketing costs, and not have to do everything that goes along with a giant sale.” Ficho believes that this is a more efficient way for commerce to exist. “That's kind of unique compared to an Amazon AMZN or a Wal-Mart WMT or a Buy.com or whoever.” Follow me @LouisBedigian