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Negotiating the price of goods is a way of life at some in-person markets, but you don’t often get to do it when online shopping.
That’s what ergo is out to change. The startup is developing pricing software to give online retailers an easy way to clear out inventory and increase profits without having to put those items on sale.
Company founder and CEO Claire Stepanek got the idea for ergo while working on the supply chain team at Apple, which manages the vendors that make the parts that flow into Apple products.
A big part of Stepanek’s job was price negotiations — she admits that math is her jam — and as she was learning about pricing strategies from a business perspective, Stepanek tried them out in her personal life, too.
For example, when she went out to buy a car, she applied the same strategy: Walking into the dealership and telling the dealer how much she would like to pay. Stepanek spent all day at the dealership, but at the end of the day, left with a car at that price.
Ergo’s Shopify app for pricing negotiation. Image Credits: ergo
“Price negotiations have this negative reputation for being stressful, and what I found was that the most successful strategy was being authentic and keeping it simple,” Stepanek told TechCrunch. “That’s where I thought of ergo: How cool would it be if everyone could use what I learned about negotiations in their day-to-day lives for shopping?”
Here’s how it works: Ergo is a software plugin, initially starting as a Shopify app that retailers can download for their online store. The software adds a button to the website’s product pages where it usually says “add to cart.” The new button says, “Make an offer with ergo.” Consumers can then click that button to make an offer.
What’s different about ergo versus your typical market is that there is no back-and-forth. When the consumer clicks the “make an offer” button, they enter in some information, including how much they are willing to pay and how long they are willing to wait for that product. Using that information, the retailer makes a decision on whether to accept or reject the offer.
The company is still very much in the early stages and is pre-revenue. Until today, the app was privately listed on Shopify, and therefore Stepanek was mum on discussing how many customers are using ergo or how many offers were being managed so far.
Boosting ergo now is $1.5 million in pre-seed funding from Anthemis and Wischoff Ventures.
Nichole Wischoff of Wischoff Ventures said: “This is a full circle moment for retailers. Back before price tags, consumers would barter back and forth and land on the optimal price for both parties. With ergo, retailers can enable a fully automated good old-fashioned barter system putting more control in the hands of their customers.”
Meanwhile, Stepanek intends to use the new funding to make additional hires and expand the product pipeline, which will include an app for stores on other marketplaces.
Ergo’s vision is to build out analytics for stores so they can gain value while also boosting revenue and sales and learning about the market. The company is also working to get products and features out for the impending holiday shopping season.
“Retail is huge with Black Friday and holiday shopping, so we are making sure that we are out there,” Stepanek said. “Our customers have said they would love to use ergo through that whole period, so we are focused on that.”
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