One Day at a Time
Woot.com sells one product per 24 hours—an idea just crazy enough to work.
Woot.com is a wonder of e-commerce, one of those counterintuitive businesses that works either despite or because of its eccentricity. The site has found its niche and knows its customers, which makes its business model—offering one item for sale each day—almost an afterthought. The “Wooters,” after all, don’t care how the products get on the web site. They only want as much Woot as they can get.
Matt Rutledge, 34, CEO of the Carrollton-based company, started Synapse Micro in February 1994, a wholesale distributor dealing largely in electronics and computer products. On July 12, 2004, Rutledge started Woot.com to sell speakers and watches and vacuums and other overstocked or discontinued goods directly to customers. (In May 2005, Rutledge merged Synapse and Woot.com, forming a 35-person company.)
There are some great finds on Woot.com, and the name itself comes from the understated excitement of chat rooms and message boards. (More often, the interjection is spelled “w00t.”) The company’s online forum has more than 400,000 members, unabashed in their geekitude and each free to discuss a great deal or a bad purchase.
But to say Woot.com merely sells products on the cheap misses the point. Even the company’s “One Day, One Deal” slogan fails to do it justice. Each day, more than 200,000 people visit the site eager to see what the writers have come up with. Product descriptions are exercises in subversive salesmanship, pleasant irreverence, and obscure references. Woot.com visitors may not become paying customers, but they will be, at the very least, entertained.
“The main attitude—and this is what trickles down—is, when you offer something at the right price, when it really is a deal that you would sell to your friends and family—the brother-in-law deal—you don’t have to be glitzy. You don’t have to put a lot of spin on it. You want to tell the truth,” Rutledge says. “We know we’ve got a great deal on this, we can be funny, we can have a good time, we can be blunt, we can do all those things and still be successful.”
How successful? Hard to say. Woot.com’s revenues for 2005 were around $40 million and projected to be about $60 million this year, according to Woot communications editor Jason Toon. But Woot.com is the “tip of the iceberg” of operations, Rutledge says, adding that half of the business in terms of gross revenue is on the wholesale side.
And business is growing. In May, Rutledge officially launched Wine.Woot.com, a similar site on a weekly, not daily, scale. Wine.Woot sold 10,000 bottles in its first three weeks of beta. He says more ideas are in the works, but he’s in no hurry to rush them out. “It has to be a match,” he says. If not, the Wooters will surely let him know.