NexTag.com Inc. launched an online buying service today, where brand-name sellers compete for buyers. This is a switch from the popular e-commerce model where buyers bid against each other for products.
The San Mateo, California-based company said the new e-commerce site would help small businesses and individuals to negotiate easily and simultaneously with groups of sellers — securing a deal within minutes, instead of days.
Currently, only computer hardware and software from more than a dozen name brand-name sellers including egghead.com and Creative Computers can be purchased on the site. But NexTag.com says that soon other products would also be available.
“Buyers are looking for selection, convenience and, of course, price,” said Purnendu Ojah, founder and chief executive of NexTag.com. “Shopping on the Web doesn’t have to be a tradeoff between these elements.”
How NexTag.com Differs
Unlike some auction Web sites that focus on limited quantities of obsolete or excess inventory, Nextag.com said it deals only in new products from brand-name sellers. In addition, the company says there are other differences between it and other “Name Your Price” sites.
Buyers can compare multiple sellers based on total price, including tax and shipping fees. Once buyers decide what they want, NexTag.com enables negotiations with multiple sellers simultaneously — without having to first commit a credit card before bidding. Unlike some auction sites, which can take days for buyers to determine whether they have successfully purchased a product, buyers at NexTag.com receive responses from sellers within minutes. Sellers compete for buyers instead of the other way around.
The privately held NexTag .com also announced today that Morgenthaler Ventures, a 30-year-old technology investment firm, pumped $4 million (US$) into the startup, completing its first round of financing.
While NexTag.com’s concept is intriguing, analysts point out that similar sites are cropping up daily. In addition, industry experts say that technical glitches — such as those that have recently plagued eBay’s site — could potentially have an adverse affect on NexTag.com’s site, as well.