A few weeks ago I was made aware of BUYSTAND, a start-up with a unique outdoor retail model: it lets consumers offer a price for gear and apparel that they want to buy, instead of the customary take-it-or-leave-it price system. This could be a win-win-win for consumers, manufacturers, and brick-and-mortar retailers, and I’m interested to see how the model evolves. I interviewed BUYSTAND’s founder, Ted Kraus, to better understand the company.
Q. What is Buystand?
BUYSTAND is the world’s first make-an-offer shopping site for premium outdoor and active lifestyle products. We partner with retailers and brands for new inventory and let shoppers set the price they are willing to pay.
Imagine going to a website where you enter the name of a specific tent that you want in a search box, the tent pops up and you are able to make an offer. If your offer is too low, you can always increase your offer price. It’s very empowering for people to have a say in the price they pay.
Q. What is your role there? What is your background?
I’m the Founder of BUYSTAND.
I grew up in Memphis, TN where it is relatively flat, but traveled quite a bit for mountain biking, camping, kayaking, and snowboarding. When I was a kid, I was kind of a fanatic about outdoor products. I used to make lists of all the components I wanted for my next bike build and snowboard kit but could never buy; now it’s game on…
I’ve been in venture capital and technology commercialization for the last five years, first at Tech Coast Angels in Southern California and now at 8 Rivers Capital in Durham, NC. I’m a Principal at 8 Rivers and lead investments in web tech so I get to see many startups — some good and some bad. Most are apps that don’t really solve a big problem. BUYSTAND does.
The story behind BUYSTAND is one we can all relate to. I was with my girlfriend. She wanted me to buy her something and I couldn’t understand why it was priced so high, so told her I would take a picture of it and try to find it on eBay or Amazon or Craigslist at a better price. We went home, I did the obligatory online searching, and couldn’t find what she wanted anywhere for a price I was comfortable with.
The next day I was at my office and had the eureka moment — why can’t I just create a buy-limit order on the products that I want, send that order out to all the sellers that have the specific item, and find out if any of them want to sell it to me at my price? If a platform existed where consumers “willingness-to-pay” was matched with retailers and brands “willingness-to-sell”, what would the implications be? Would it solve a significant problem? What would the platform look like to consumers? To retailers and brands?
Q. What is the problem or void in the marketplace that Buystand is trying to address?
This is a great question and the very one that we started with in developing BUYSTAND. What problem are we trying to solve?
Seller-driven pricing is, by definition, imperfect pricing. It is based on assumptions that always lead to too much or too little inventory. This is why when you go and shop on any e-commerce website, there is a sale section. In order to clear that excess inventory, retailers and brands are forced to markdown product to meet the demand. The US Department of Commerce quantifies this market inefficiency as a multibillion-dollar problem.
Q. How is Buystand different than other discount retailers like Sierra Trading Post, Campmor, and Steep and Cheap? Is it better for consumers, manufacturers, and/or other retailers?
All others retailers are seller-driven. That means they hold inventory, and markdown products that are not selling in order to clear the inventory.
BUYSTAND is buyer-driven. That means we allow you to set the price you are willing to pay. No more wasting time and waiting for markdowns. It turns out that this is great for all stakeholders — consumers, retailers and brands. Consumers are able to save time and get what they want at their price, retailers are able to optimize pricing and move inventory faster and brands are able to maintain their brand equity like never before. It’s a perfect storm of market efficiency.
In fact, I recommend that Sierra Trading Post, Campmor and Steep and Cheep contact us and get integrated into our platform as soon as possible.
Q. Why did Buystand focus on outdoor goods? It’s a relatively small market, and already crowded.
We focused on outdoor apparel, footwear and equipment because we love the industry, products, lifestyle and the outdoors. The segment is approximately $4 billion per year in the US, so there is a big opportunity for market innovation.
Focusing BUYSTAND on the outdoor sporting goods industry was a no-brainer. We have a powerful team, amazing technology and are building lasting relationships with retailers and brands in the industry that we love.
Q. When will Buystand be fully functional, i.e. open registration and out of beta testing?
BUYSTAND is fully functional and currently in a private beta. We received an overwhelmingly positive response from our early users since beta launch in October and are sending invites to new users on a first come basis. If you are reading this and want to sign up for beta access, please go to buystand.com and join the movement today.
Q. It seems odd that Buystand has strong ties to Duke University (my alma mater), which hardly has the outdoor cred of other institutions like University of Colorado, Montana State, or Dartmouth College. Can you explain why this idea originated near Duke?
Ideas come to people in many different places. BUYSTAND is a technology company that solves a big problem in the consumer goods market. Currently, we are located in Durham, NC and our office is near Duke University. Members of the BUYSTAND team are from UNC, NC State, Ursinis, Harvard, MIT, Appalachian State, Arizona, Oregon and Duke. We all lead active lives and love the outdoors.