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Name: Plukka
Quick Pitch: Social shopping with a group buying twist — more jewelry buyers means a lower price for everyone.
Genius Idea: Applying the group-buying model to the manufacturing process, not just the final product.
Today's group buying sites often exist to get rid of leftover inventory from last season; both the designer and the website get a cut, while you get the last season's threads for half the price, three months late. Jewelry site Plukka turns that model around — it doesn't manufacture the item until there's demonstrable interest in it. And the more people want to buy it, the lower the price dips, like a reverse auction. Each flash sale presents images of a David Yurman-esque item, such as 14k gold, diamond and gemstone rings, necklaces and earrings. Interested consumers can "buy" the item for 24 to 48 hours (or until the item sells out). "Buying" it blocks off the current price — the card isn't actually charged later, when the final, low price is set. Prices range from $200 to $5,000, with most falling within the $500 to $700 range.
Plukka founder Joanne Ooi says that its test-demand-before-you-create-supply model means that the designs are riskier and more creative, since the company isn't investing in manufacturing until sales are locked in. Traditional jewelry designers have to predict trends and hope people will like the designs — Plukka knows there's interest before the gold is melted down. The jewels are designed by Plukka's in-house team, but the spring collection will feature collaborations with fashion bloggers, too.
Because manufacturing cost-per-unit drops as the number of units increases, the site can pass the production savings onto the consumer, thus making high-end jewelry more affordable. Plukka's patent-pending sliding scale calculator determines how the price should lower as more people purchase the item — and everyone gets the same final price. The minimum is around 25 units, and if that threshold isn't met, the item isn't manufactured — so there's no unwanted inventory lying around. Plukka's tagline is "what we make is what you want," and its business model reflects that.
And unlike Gilt and other sites, where you only reap the benefits of a referral if the person makes a purchase, Plukka offers 10% for the mere act of referring five friends to a particular sale, and then another 10% off for each friend who buys the item (the discount maxes out at 40%).
Plukka hopes to have a mobile app on the market by the end of 2012.
Series Supported by Microsoft BizSpark
The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark, a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. There are no upfront costs, so if your business is privately owned, less than three years old, and generates less than U.S.$1 million in annual revenue, you can sign up today.
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