Goods must be affordable, otherwise nobody will buy them. Goods must be expensive, otherwise the store will not make money. The way out of this contradiction is additional options and packages. We advertise the ‘stripped down’ price, but we sell the whole package if we’re lucky. For example, phones go well with protectors: +10% to the check, +80% to the margin. Clyde, an American startup of the day, offers sellers to add an extended warranty to the goods.
For the buyer, it looks like a checkout option. A laptop costs 1000 dollars, and this price includes the manufacturer’s standard security – it covers a relatively short term and only manufacturing defects. A cup of coffee spilled on a keyboard is not a warranty case. Alternatively, you can pay extra 200 bucks for Clyde’s service – a couple of years longer warranty with friendlier conditions, including insurance against one’s own clumsiness.
For partner stores, Clyde has a widget with seamless integration. Today you set up and adjust it, tomorrow your conversion increases and so does your average purchase amount. At the end of the month, you receive an invoice of roughly half of your added revenue. That’s it, that’s all you do, no offline. The startup handles complaint processing and insurance risks, – notably, it resells the risks, the formal party of the warranty contract is a third-party company.
In this autumn’s round, Clyde brought in USD 41M of investment. In Russia, regular insurance companies do something similar, but it seems like they don’t deal with smaller stores, they will only help out the biggest ones.
#store #usa #roundb #fintech
Translation: Kostiantyn Tupikov
Alexander made his career in Russian internet companies including Mail.Ru, Rambler, RBC. From 2016 to 2018 he was Chief Strategy and Analytics officer in Mail.Ru Group. In this position, he worked on M&A, investments, and new project launches. In 2018 he became Deputy CEO in Citymobil, a Russian Uber-like company that was invested by Mail.Ru Group and Sberbank (the biggest Russian bank), then he left the company to launch his own projects. Now Alexander is a co-founder of United Investors – the platform for co-investments in Russian early-stage startups. His blog #startupoftheday (#стартапдня) is one of the most popular blogs about startups in Russia.