Boulder, Colorado based eSwarm aims to bring buyers and sellers together with a model that is similar to bulk buying clubs.
Buyers register for a free account then join current swarms (groups of buyers) or create new ones. Swarms can be focused on any consumer good, debt refinancing, pre-paid gift and debit cards and even insurance products. Sellers then bid for the business.
The theory is that the larger the swarm, the more attractive it will be to sellers. Once a seller lodges a first bid, membership to the swarm is frozen and other businesses have 48 hours to counter bid.
eSwarm also provides charities and organizations with a fundraising tool; creators of swarms can stipulate that a percentage of the total sale is donated to their charity of choice.
There is not a lot of activity on the site as yet, but it is growing. CEO Tim Newcomb says that eSwarm is a “global economic revolution;” it’s not, but it does have potential.
It does have potential? Duncan, where’s that resignation again? Seriously, do you even have a brain that processes logical thoughts?
People already have Costco and Sam’s Club – to beat those stores, you’d need an insane “swarm”. Companies that already have popular products, will not accept these swarms. Companies that have unknown products may be ok with it as a way to generate interest, but why would there be a swarm around those products in the first place?
Those who need it, won’t get it. Those who don’t, will get it, and ignore it. Goodnight Duncan.
I’m not sure if the economics of this works, but I must say, a word-of-mouth marketing model is built right into the system! Incredibly clever!
I mean, to save money, you have to get other people to join your swarm. Getting other people to join = awesome for both you, eSwarm, and the seller.
Now let’s see where this marketplace ends up…
I’m so happy to see that mascots are cool again.
This was one of my favorite ridiculous business models from the dot com days. Glad to see it’s back; probably a good sign of the coming apocalypse 2.0.
Anyone feel likened to an insect around here?
Hmmm I wonder when you guys write some of these posts, whether you bother to research all the previous attempts at or (in many cases) flame outs regarding this idea. As Matt points out, that fact may be a “wow, we’re recycling old business models, this stuff isn’t really new” point to be made. This was indeed one of the big crazy ideas that was going to be difficult to make work, with such winners as Mercata ($89 million gone), Mobshop, actBIG, and many others. I feel some further context is justified, instead of another breathless TC puff piece.
well the market is a little bit different this time around, way more people are online than there were in 1999…this could become a pretty good space to enter, since there really isn’t any active competition
wasn’t Mercata and Mobshop the same thing? I think they changed their name to mobshop. And I think they are still around, they retooled their software to do group buys for gov’t contracts…or something along those lines
Mobshop and Mercata were two different companies. You are correct- Mobshop dropped the consumer side of the business in 2001 right after Mercata went out of business: http://query.ny...752C0A9679C8B63
I agree the chances of one of these types of sites working now is far greater, but I still think it’s important that the article include some of the information about those that came before… otherwise it seems more like a press release with screenshots than anything else.
didnt this happen already in the mid 1990’s ? In europe the one that comes to mind is letsbuyit.com which was established in many european countries.
Thus Letsbuyit still survives it isn’t as big as it originally was.
Andrew, I just found this wikipedia entry about Mercata and mobshop.com. It seems that mobshop was part of Accompany (http://en.wikip...Lafir/Group_buy).
I think the concept is great in theory. The previous attempts had plenty of fundining. I don’t know why they failed. It would be interesting to know. I wish esworm the best of luck and I hope they succeed since this is a very interesting idea.
the idea isn’t that bad… i can tell you that offline there is a bunch of people doing the very same thing to buy weed and other drugs at a cheaper price…
One thing that separated TechCrunch from Mashable since the beginning was the thought and genuine input Mike always puts in his posts. He wasn’t simply putting up an article to get it out there. He often was a little slower than Mashable, but what I did enjoy reading was his commentary, good or bad. With the recent writers, I hope they can start their opinions and back it up with evidence. That way, they’ll be more of what Mike is to TechCrunch and less of this another person trying to push an article online so readers have *something* to read.
Nonetheless, it’s not to bash. I’m just hope I can read about real potential companies with reasons to back it up. If not, I rather here about rumored buyouts. At least with those, if it were regarding publicly traded companies, it’d give me some tips to look into to play the market, i.e. MSFT and YHOO rumor.
In Europe we had “letsbuyit.com” and that was a huge success!
/sarcasm off
Aah, letsbuyit.com – now that’s a piece of interesting dotcom history! IPOed /after/ the bubble burst then went into admininistration and laid off staff in 2001, supposedly bailed out by Kim Schultz, then it turns out it was a sham and he got a 20 month suspended sentence for insider share dealing.. Then it got €4m investment from Global Emerging Markets New York.
Looking at Alexa it seems to have closed shop in around 2004, but there doesn’t seem to have been much reporting on that fact. But in March this year, plans were announced to relaunch letsbuyit.com in August 2007. This time it appears to be a French company behind it.
Is it a sign of boom 2.0 that all the failed dotcoms are coming back? At least boo.com reinvented itself…
I had a recent look at a site in Moscow, Russia (more of an operation than a website really) that allows people who can get cheap goods (kids clothes toys, womens fashion, mens fashion etc) then tout to a market online to get groups of about 10-20 buyers who then get the goods for about wholesale price. There is a real buzz about this site, its insanely popular and has a genuine online and offline social network. The word of mouth about it is huge.
It relies on people getting goods into this market at a cheaper than shops price. Can something like that happen in the states? Ignoring clothes, how about credit cards or mobile phone contracts? Surely big financial houses or telcos arent going to offer at a discount to either their existing resellers or own brand operations?
I can only see eswarm working where it can find products at a genuine discount, be it chinese electricals or italian furniture, stuff that is not necc. intended for the us market in the first place. – but that requires genuine economies of scale to get that product shipped to the states. Could be a good place for entrepreneurs from abroad…but then I haven’t even mentioned the risk of getting ripped off….
This won’t work – Mercata, ActBig, VirtualMarkets and MobShop all covered this space in Web 1.0. Mercata and MobShop had some serious $ behind them (Vulcan Ventures) and still failed. They got some tractions, but I remember the transaction volume was quite low.
The interesting thing is that Mercata actually has been granted patents on the Group Buying process – will we see patent enforcement in order to recoup their losses?
If I were them I’d think about providing an API so other sites could provide the same fuctionality on an OEM basis. Alone none of these site could provide enough # of users to create a viable buying group – but together as a network they could.
This is usefull for those who want to find their costmer, but the main problem is time to execute swarm is very littile ie only 48 hour, It will restrict seller to get those byer who can purchase at higher price. Anyway my article is ready for digg for eswarm.
Duncan, Mike, can you have separate RSS feeds so that we can quietly ignore Duncan’s rumblings, please?
One of the reasons why wholesale price is lower than retail is the customer service or lack of thereof. Will consumer law apply to every member of the swarm or the entire swarm?
Nothing new. Team Buying’s been out there for a while now.
http://www.csmo...01s01-woap.html
The team over at CrowdSprout are developing a different approach that involves widgets, and their scanning of products contained on the widget’s parent page. This is where it gets interesting, when social networks meet group buying. I’d expect to see plenty others entering this market.
The site needs either a good dba or php person.
As connections are timing out
Is that a Praying Mantis?
Hi folks,
I was the founder of Akabi.com it was the first online group buying website …
I sold it to Multimania just before bubble. So I had time to think about this idea. In sipte of all bankrupcies I can definitely tell you it’s a good business model to launch now but it depends as these companies will do it…I have ideas about it
Thomas
Now I am relauching a new venture Trivop.com have a look…or check in Techcrunch
@Chase (21): CrowdSprout doesn’t allow new people to register right now (at least I didn’t find the place where to register
). Private beta?
Although the idea isn’t new, if someone can come along and finally execute it properly and gain enough early buzz in the process, it could have legs. Maybe if they try to focus on one segment of the market and not try to the wall mart approach this one could work.
It seems like a good idea, but it also seems that its only being executed because it “sounds” like it could work. On paper, sure, something like this seems revolutionary. But in practicality? Will the consumer actually benefit from this? What kind of sellers are going to try and connect with these buyers? And is this necessary in a consumer market where people buy retail for themselves?
Fire Ducan.
A perfect facebook ap – probably a KILLER facebook ap – I mean think about it – instant swarms – save couple bucks – everyone in your social circle buys the same exact thing – so then you have more in common – eventually we all look alike – narcissism and world peace go hand in hand, right? You will save the world eSwarm and Facebook! How did I ever interact with my friends or buy stuff before you came around???
Duncan – you need to write instead of recite man!
@Raj(33): A CrowdSprout aggregate buying widget for Facebook is just days away…
I figured out! That’s an ant not a mantis!
What’s up with all these new companies pouring out of Colorado lately? replacing Austin?
If you want to call this a company. Seriously, how do you guys take someone who calls this “a global economic revolution” seriously?
As someone that has been involved with many “group purchases” organized by automotive forum members over the past eight years (now referred to as social networks), I see a big problem with this model…margins. Back during web 1.0, this model did not work and there were far fewer retailers selling products online and margins were much greater. Now, especially in the automotive space, margins online are almost non-existent for group purchases, so I don’t see a lot of retailers jumping on board and bidding prices down, especially if the retailer has to give away what little profit they have made on additional fees.
I disagree with Antony, Seller will bid on deals. the profit margin is always there since business are selling large among of goods so quickly, the product stock ratio will be low, and it helps the cash flow. You can treat it as a newer, faster distribution channel.
With ebay stores, amazon,ubid, and millions of other ecommerce sites, what makes you think this will have any traction whatsoever ? The social networks can’t and won’t support it. Deadpool in less than a year without huge bucks behind it. Let’s get real here! Everyone is banking on FB and it gets more ridiculous everyday.
Damn… After reading the post… There are some people here don’t seem to like Duncan. I wonder why?
I think we got grammar police
I have serious doubts of the succeess of this idea. It isn´t bad but it´s difficult to apply.
This kinda of group buying is extremely popular in China and very successful too. I couldn’t remember names but there are several web 1.0 tries during the 90s .com boom but they all disappeared. The conclusion seems that this type of thing is not fit into America culture. It’ll be interesting to see how far this one can go. Regardless, the is a very OLD business idea.
1% would be me. I support duncan to stay TC. I would sign Petition.
Question:
Why do 70-80% TC readers hate Duncan soo much?
Ahhh screw you people!!!
this time is different….
they have AJAX
Can’t we all just get along?
I always wanted to say that!
I couldn’t see myself investing in this business since I don’t have any money, but once I land my first job I’m going on vacation!
How is this different to letsbuyit.com (currently being redeveloped but which has been around since about 2000?)
Whilst crowd promotion can seem to be a good thing (oh look my friend recommended this it MUST be good…) there is a big danger that if everone jumps on this particular bandwagon it will just become another form of spam. It needs to be managed very carefully if it is not to get out of hand.
Finally, I am growing increasingly wary of any Web 2.0 site that uses crowdsourcing/groupthink as an economic model. The crowdsourced sites that have made money have largely been for the founders and based on how many adverts the site could sell and nothing to do with the economic model of “the wisdom of crowds”. Indeed one crowdsourced site I was involved with cited the fact that I was in a remote location as the reason they couldn’t work with me, but this was exactly the same model of working they were proposing for their user base. Oh and has “the home of Crowdsourcing” CambrianHouse made any money either?
@Zeta, Jay, gouch, and the rest of TC readers…
I like to say…. Duncan is not an american animal blogger or jackass blogger.
Stop firing Ducan. You are killing my entertainment.
Stay… Stay… Stay… Duncan…
Our website, SaveUpwards.com, already has this functionality. It is bit different however. We are wanting to do brick and mortar “crowds”, “swarms” or whatever. We are calling ours uprisings. If you want to check out how we are handling it go to http://www.save...om/uprising.php. The system has still yet to be integrated as a part of the site but is fully functional. I definitely believe that team buying if made popular could revolutionize commerce today.
Sorry for the repost but it looks like my link was killed with the (.) at the end. Here it is again:
http://www.save...om/uprising.php
In theory it seems nice, but to me, it seems like people are just going to lose money on it. Sellers could make more money on eBay or another, simpler site.
-Chris
http://www.nerdcouncil.com
save upwards, #1,300,000 on alexa ? most people could fart and get a better ranking than that.
Yes just to be hours late and follow upon everyone else; this is far from the first time its been done thus not an original idea – I’m unconvinced the economics will stack up against suppliers that can already haggle vast discounts for vast buying, from suppliers, on behalf of customers/users.
I had an office below one (Cambridge, UK) during the dot com boom (just trying to remember what they were called) and they went very bust very badly – it was never going to work.
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