Inc.com Interview with Alice.com Founders — Business Model Explained

July 5, 2009 · 0 comments

June’s Inc. has a great interview (available online here) with the co-founders of Alice.com, Brian Wiegand and Mark McGuire. In it, they talk about their business model, which has some similarities to what they did with Jellyfish, but is also very different.
Alice.com wants to get the attention of consumers by offering “consumer packaged goods” (consumable products including food, cleaning products, and cosmetics) at Walmart/Target prices with free shipping. Shipping cost has traditionally been a barrier to buying these types of items online. In addition, the site has “taken all the coupons in the entire country and uploaded them,” so the savings is built in and no clipping is required. For those of us who are coupon-challenged, lacking the time or patience to clip and organize, much less remember to bring them when you shop, this is a very nice perk.
Alice.com is also getting the attention of its product suppliers, by offering them a platform to sell their merchandise outside of stores, where shelf space is at a premium as more and more supermarkets fill the shelves with their own store brands of products. Alice currently has signed up half of the top 10 “cpg” manufacturers and until the others sign up, which they expect to happen within the year, they are wholesaling the remainder of their products. They keep all of their products in one centralized warehouse (wow, I’d love to see what that looks like!) and they ship everything out in one box from there.
So where does Alice make its money? This is where the Jellyfish similarity is: they charge manufacturers for placement in their search results. If you want your product to come up first when an Alice.com customer searches for, say, toothpaste…you’ll pay for the placement.
I can’t understand how that could generate enough profit to cover the overhead that must be involved in an undertaking like this, but this is Brian and Mark’s fourth internet business and the previous three sold for milions of dollars each, so they must know what they’re doing.
I placed my second order on Alice.com last Wednesday and it’s scheduled for delivery on Monday (the holiday delayed it a little). I only bought products that were at or below what I would spend for them at Walmart, and I got 25% off that using their eCoupons. Am happy so far with my Alice.com experience.
You’ll get $10 off when you spend $50 at Alice.com after joining with the referral link of an existing member. If you want to try them out, please use my link — thanks!

Share this:
Facebook Twitter Pinterest Plusone Digg Stumbleupon Email

Leave a Comment