Written by Irina Belsky
Wyngle is waging a war on the traditional group buying sites with its new concept of ratio shopping. The startup has devised a way to let shoppers purchase goods for a mere dollar without taking away profits from retailers.
IPitch chatted to Wyngle founder Sebastian Langton about what Wyngle can offer to businesses and shoppers.
“The easiest way to describe Wyngle is it’s products, goods and services at the same price you’ll find anywhere else in the market but with the unique opportunity to potentially purchase them for a dollar.” says founder Sebastian Langton.
Each product on the Wyngle website has an attached ratio such as ‘1 in 3 for $1′. This ratio dictates your chances of purchasing the product for one dollar. If the ratio is 1 in 3 you have a 1 in 3 chances of buying your item for $1. If lady luck’s not on your side you simply commit yourself to paying the regular retail price.
“So if you’re going to buy the product it makes sense to buy it from us because where else can you get the change to get it for next to nothing? Just the other day we sold an ipad for a dollar which I believe is probably as cheap as anybody ever paid for an ipad” comments Langton.
Wyngle emerged from Langton’s desire to introduce innovation to the world of online retail. “I was working for a company called Catch, selling vertical advertising space and the consensus was that 99 % of all e-commerce platforms were axing their price primarily to get one up on their competitors” says Sebastian. After recognising that sales through discounting were depriving businesses of value, he set out to develop an alternative model in 2009.
The next six months were spent creating the initial concept of ratio shopping and trying to reconcile it with Australian gaming laws. This was made especially difficult because of the innovative nature of Wyngle as well as the tightly controlled nature of the government legislations. “Ultimately we’re not a gambling site”, clarifies Langton, “It’s also very difficult to class us as a trade promotions but that’s what NSW has deemed us as.”
Langton bootstrapped Wyngle until early 2011 when the startup secured their first round of seed funding from an investor. At present the Wyngle team has expanded to include an operations director Damian Cantelo, an outsourced development team and even Sebastian’s dad.
Benefit to businesses
Langton is adamant that Wyngle is the way to save retailers from destroying themselves through unsustainable discounting practices. “No business is going to survive selling something that should be worth $100 for $20″ he states adamantly.
Businesses benefit by selling their products at retail price while the loss of $1 sales is offset by a negotiated margin. In Langton’s words “if we were to do a ratio of 1 in 3 it usually means we’ve negotiated a 40 or 50 per cent discount on those products because we’re buying them in bulk”.
This allows Wyngle to advertise the product at market price and to pass this discount to the customer in the form of ratio shopping. As for Wyngle’s profits, the startup plans to make money by clipping the ticket of every full price sale that goes through the site.
Marketing and PR
In addition to employing SEO and SEM strategies and Google analytics Wyngle has also used the services of a PR company to sow initial exposure in mainstream media.
Other publicity such as an interview with Sky News was secured thanks to Wyngle’s existing contacts and relationships, such as the connections formed during the innovation bay investment pitch.
Coming from a property management background, Sebastian has had very little knowledge of the startup world and saw bootstrapping as the only option at the time of Wyngle’s inception.
“I struggled on to self fund which probably was a mistake. I wish I’d done a little bit more research or gotten in touch with more organisations to work out the other potential options of developing the idea.”
Despite the lack of any entrepreneurial background and challenges of the process, Langton has persevered with the concept he believes in “wholeheartedly”. He views Wyngle as the way to save retailers while retaining value for shoppers.
“Either we have to make a stand and change the way we sell and the way consumers perceive what they’re buying or we’re all going to end in a lot of trouble” he concludes.
Wyngle is planning world domination in the year to come, with a possibility of expanding to the international market. Langton reveals that “we’re doing capital raising at the moment and with this being secured we’ll be looking to go to the US and UK in the next three to six months.”
The startup will also focus on strengthening its brand by getting more media exposure and forming relationships with suppliers. “We can offer them something completely different that doesn’t mean they have to sell out their brand and destroy their market position.”