Journey of a Child Entrepreneur: Scott Wainner (Part 6)

SM: Much of the comparison shopping industry on the Internet is reviewing products, whereas you are reviewing the retailers. That is the big differentiation?

SW: It is. ResellerRatings has always been in this weird niche. Most merchant reviews are only found on shopping engines like Shopping.com. It positions us uniquely because we do not allow opt in. Merchants will be listed in ResellerRatings whether they like it or not, and often they do not like it. This is not the case for Shopping.com –  if you do not pay them to be in their engine, you are not going to be rated in their engine. We are a lot less biased on reviews. We have 15,000 stores, many of which are little stores that you will not find reviewed anywhere else.

SM: Where do you go from here? You have a $2 million business and six people.

SW: I started looking a lot more into the bargains and deals space and not just in the merchant review space. I think for ResellerRatings there is a lot of opportunity for merchants such as giving them tools to manage their feedback, which we do. We have free and premium tools that let merchants get into the process to see who is writing reviews. For ResellerRatings, something I realized a long time ago is that there is not a buzz about the site in terms of people checking it frequently. They use it as a tool and it is a great tool, but they only use it when they need to. I have been looking at ways to create a site that is a bit more addictive, a site that someone has to visit every day.

That is where Dealighted.com came in. That was in late 2006. I was visiting sites like SlickDeals and FatWallet as well as bargain shopping sites, and I was looking at their forums. There are thousands of deals posted to the forums every day, and it is impossible to figure out which deals are active, expired, etc. The front page could be some deal that is six months old. I identified an opportunity to weed through all of that. Other sites have come in and aggregated all of these deals. It would be an eight-hour-a-day job to look at a thousand deals a day. Aggregators think it is a great idea to aggregate and just barf it out to you.

That does not solve the problem. I took the aggregation component and then sorted it. I don’t do it in a Digg style where people vote, I just use the data that is already out there. I took data like reply data, how active the views are, the ratings people give to deals, and pulled all of this data to look at the deals posted today and say which are junk and which are hot. The hot deals get posted to the top of the Dealighted page. The data is all just out there. It is growing like crazy. In December it got 300,000 visits, which should have been really high, and last month it got 650,000 visits. People are visiting multiple times and getting addicted.

SM: Is your monetization the same Shopping.com model?

SW: It is the same model. On top of that, we benefit from things like WidgetBucks, where they are using Shopping.com-type products, putting ad placements on sites and benefiting from the CPCs. That is something that we did a while ago. We use our Shopping.com data and product feeds to figure out which products are hot. We then pay sites for ad space, and we stick these products there in ad blocks. We get the CPCs when people click on these products, and we pay the sites a flat rate. There is a difference between what we pay and what we make.

We use those ads on other sites and on ResellerRatings. There is a conversion loss on ResellerRatings: when a person searches for something, she may click all the way through to a merchant or she may not. We use these ads as a way to cut out that conversion. The ad is right there, and when a person clicks on it there is no loss.

This segment is part 6 in the series : Journey of a Child Entrepreneur: Scott Wainner
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