Greentoe – Innovative Business Model For Online Shopping
Business Model of Greentoe
The report discusses about the innovative business model that Greentoe has come up where it gives a unique platform to the buyers to set their own price of the product and the seller can easily take the opportunity to sell the product with the best possible and negotiating price. This is definitely innovative as it is different from the old e-commerce business activities and is based on a unique business model.
The revolutionary online shopping company Grentoe has been founded by Joe Marrapodi. The idea of this innovative business is based on the pricing where the buyer just has to propose the price of a product and the first retailer to agree with the bid sells the product (Greentoe.com, 2018). The founder claims that this platform acts as a customer acquisition vehicle and helps in becoming retail partners. This unique idea helped to perform the company since it was founded because the seller constantly cycles around the online inventory in order to sell their product. Both buyer and seller can connect with each other through the internet creating the largest possible platform of buying and selling. The online platform continued to be innovative as this platform has been able to offer the best price after negotiation from both the parties involved in the e-commerce activities (Greentoe.com, 2018). The additional innovations introduced by the company involve the step towards sustainability where one can carry out business activities through online and thus contributing towards a greener environment. The country of origin is Mountain View, California, USA. At present the company has not expanded in other countries and is operating in US along with its major competitors (Greentoe.com, 2018). Considering the increasing competitors and innovative ideas in the business, Greentoe had to adapt its business activities and it offers more options for both sellers and buyers to choose from maintaining a certain level of sustainability.
The business model followed by the company in the beginning was inclined towards the e-commerce business where the particular site is the platform of buying and selling of products. However, Greentoe’s business model is unique because unlike the salesperson or the war of discount and negotiation, it gives the direct opportunity to the buyer to set their own price and the sellers can match the same and can sell their products. With time and increasing competition, the business model has evolved (Greentoe.com, 2018). As for instance, Greentoe has launched more reasonable and extensive medium where the price as proposed by the buyer is calculated automatically and it recommends the best offer price to the retailers in the platform. The best bid wins the sale. In fact, the business model has also evolved in a way to acquire more and more consumers and the retailers who can offer the lowest possible price. At present, the business model has now changed slightly compared to the previous model that the business used to follow. Now Greentoe has opened up the platform for various retailers who sell various kinds of appliances with an ‘all in’ price of the products offered by the different retailers (Greentoe.com, 2018). The business model has to change in order to meet the increasing competition of the e-commerce market. In this platform, any buyer can come up with a price that seems suitable for him after a lot of search in both online and offline platforms. Thus it can be said that Greentoe is the ultimate place for the buyers to get the product in the best possible price.
Success and Challenges of Greentoe
The biggest success of the company is the increasing popularity and the regular registration of new buyers and sellers in the platform. It has been found that there are more than 36.6K fans on Facebook and more than 63.2K followers on Twitter who are the followers of the site and can be considered as the buyers and sellers in the platform (Greentoe.com, 2018). In terms of failures, the company is yet to reach the heights of the e-commerce sites like Amazon that offers A-Z products and at a competitive pricing also within a short delivery span. The opportunities are wide and opened for the company to expand in various countries and also to increase the customer and seller base in the online platform. In fact, the company has also received huge funding to expand its operational activities. The business model is highly accepted and with the increase in the online purchasing activities, the opportunity of e-commerce activities is increasing. As commented by Foss and Saebi, (2017), target group irrespective of any particular age group are involving in the online purchasing method to save their time and at the same time to get the best possible deal in the product.
The challenges faced by the company were to introduce the new and unique concept of stating a price of the product and then waiting for the seller to accept the price. The present e-commerce sites like Amazon, e-Bay were based on selling the products but after applying certain discounts and offering best competitive price to the buyers (Greentoe.com, 2018). However, the unique concept has helped to overcome these challenges and is attracting more and more customers. The company has always evolved towards the betterment but there have not been any significant dramatic transformations in the business activities. The innovative idea and the business model is more or less similar since the beginning expect for the fact that the company has come up with several strategies like involving more sellers and offering the best price by reducing the expenses that the sellers have to undergo in case if there is an involvement of middleman (Martins, Rindova & Greenbaum, 2015).
As already discussed, the products are sold by bidding where the first price is proposed by the buyer and the seller agrees to it. This automatically gives rise to the competitive pricing strategy in the online market (Greentoe.com, 2018). The entire business model is based on the digital or online strategy. A buyer has to sign up and create an account and then one can easily bid from the huge number of products available online. At the same time, the price is fixed by the buyer and not the seller (Bocken et al., 2014). This has given a tough competition to the other e-commerce sites. The company has been found to advertise by the means of online social networking sites like Facebook and Twitter. The company has its official pages in these platforms where the company advertises its business model. Apart from this, the company has its own website where advertisement activities are also evident clearly.
Comparison with Competitors
At present, the company has been found to focus on increasing the customer base and thus, the revenue generation is low compared to the expected amount. The revenue of the company is nearly 3 million in present time (Greentoe.com, 2018). At present the major competitors are the e-commerce sites like Amazon and retailers.com that also work on a similar principle or business model. The innovative business model has been growing towards increasing its competition in the market. However, with its increasing popularity and the unique concept, it is more likely that the customer base will increase and the company can easily compete with the present competitors. The business model where the buyer is the one who decides the price and gives the scope of great bargaining is the innovative idea compared to the competitors (Zeithammer et al., 2016). Greentoe is definitely a follower of the innovations as the idea of the business is inclined towards the e-commerce business. It is not a completely new concept and thus, cannot be considered as a leader of innovations.
As stated by Fay and Zeithammer (2016), when a company is started by the means of an innovative method, it is referred to an innovator’s method rather than a lean start up. The business model is based on online business and thus there is no scope of lean start up. It can be commented that apart from the goods, this online company can also create a diverse range of products like food items or clothing and accessories for the consumers. The innovative approach can be easily applied in this particular business type (Greentoe.com, 2018).
Conclusion:
The report has helped to understand the importance of innovative and sustainable approach undertaken by the companies in the recent time to attract a huge customer base in a wider region. The Greentoe has evolved largely in its business journey and it is expected that the company will flourish further in near and far future from now like from 10-30 years from now. The company is vulnerable to both online and offline retailers due to its unique business model and the kind of business it offers. This concept and the company are definitely on a newer side and can easily compete with the age old retailers or business bodies. The e-commerce companies like Amazon can gain better insights. For more innovations and trajectory in this company, it can be recommended that the company can in fact go along with the other e-commerce companies to increase the business activities.
References:
Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.
Fay, S., & Zeithammer, R. (2016). Bidding for Bidders? How the Format for Soliciting Supplier Participation in NYOP Auctions Impacts Channel Profit. Management Science, 63(12), 4324-4344.
Foss, N. J., & Saebi, T. (2017). Fifteen years of research on business model innovation: How far have we come, and where should we go?. Journal of Management, 43(1), 200-227.
Greentoe.com (2018) THE NEW WAY TO SAVE – NAME YOUR PRICE Retrieved from:https://www.greentoe.com/ [Accessed on: 4-12-2018]
Martins, L. L., Rindova, V. P., & Greenbaum, B. E. (2015). Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal, 9(1), 99-117.
Zeithammer, R., Stich, L., Spann, M., & Häubl, G. (2016). Paying for a Chance to Save Money: Buyer Behavior in Name-Your-Own-Price Markets with Bidding Fees.