Flubit takes on Amazon U.K. with gamification
Through the creation of private, discounted offers and a bit of gamification, Flubit, a U.K.-based online marketplace, believes it has a better mousetrap for smaller online retailers attempting to take on Amazon and other big online sellers.
On its website, Flubit first describes how it works for online buyers:
- You want to buy a new laptop; you search online; you find the one you love.
- It’s not on discount; it’s not on sale: you tell Flubit.
- Flubit will create you a private offer, lower than the price you’ve found,
for that exact same laptop. - You use Flubit for almost any product you want to buy.
On its homepage, Flubit tells buyers, "Find the product you want to buy on Amazon.co.uk."
As for online sellers, Flubit describes itself as "a new and very different selling channel":
- The simple integration process (Inventory > Orders) is fully automated, but your products aren’t searchable/browsable.
- Flubit puts your products in front of shoppers who are most likely to convert (one in three).
- You are able to sell to discount customers without jeopardizing margin and name. It is private and discreet.
![[Image: Flubit]](/public/images/discussions/17641/flubit-still.jpg)
Flubit says it "diverts sales away from the major sellers, giving you orders where your marketing efforts have already failed and lost a sale, at no cost."
Flubit’s retail partners are able to offer consumers savings of up to five to 15 percent because its commissions are more than half of those charged by Amazon and other online marketplaces. They also work on lower operating costs by using second-party sellers.
Working similarly to priceline.com and hotwire.com, the site also benefits from keeping prices secret. Writing for lovemoney.com, Donna Ferguson said keeping prices hidden "allows it to circumvent the bans that certain brands like Apple and Google impose on retailers, preventing their products being advertised below a set price."
Founded in 2012, Flubit claims to already rank as the fourth biggest marketplace for online retailers and recently partnered with Barclaycard to offer better pricing to its credit card members. While international expansion is possible, it’s currently focused on adding more merchants in the U.K. and expanding its loyalty efforts.
Said Flubit CEO Bertie Stephens in a recent press release, "We’ve generated thousands of new users through our points and referral-based loyalty scheme, and our customers use those points to enhance their experience."
Discussion Questions
Would a gamification-driven online marketplace site such as Flubit work in the U.S.? How would rate the pros and cons for smaller retailers?
It might work—the devil, as always, being in the execution. Amazon and eBay are so entrenched it is easy to think of them as invulnerable, but as the dollar stores showed Walmart, there is a workaround for every “unbeatable” format or offering.
The pros are fairly obvious—expanded market, better targeting, etc. The cons? They don’t get “psychic credit” in the consumers’ minds and they are forced to erode existing margins.
There are always plenty of consumers who want a lower price. In the race to the bottom, Flubit could become number one. The question is whether Flubit has the customer service in place to handle questions, problems and returns. I like that consumers are not under obligation to purchase a product. Brits love a deal and are famous for driving extra miles to save money. The Flubit formula could work in the U.S. as well.
Interesting concept and I can see it working in the U.S. In Flubit, we have a company that’s looking to undercut Amazon.
48 hours turnaround time to come back with an offer could be too long for those under 18 in our “need to buy now” world. However, as Flubit’s team establishes its relationships with the vendors, and the wheel starts to turn, they will have to bring down that 48 hour window to delight customers. Only then can they contend with the Amazon one-day delivery onslaught. Opportunities like gamification and social connecting (which will almost certainly follow) have the ability to make the time spent waiting for the offer more interesting. I can see teens and Millennials facebooking and tweeting about their Flubit offers.
Clearly, Flubit is not holding any inventory. They will, however, have to keep their operational costs in check; what categories will they go after first, what can wait, how many people will they add to the business as it grows? These are going to be interesting questions for them to solve.