This week’s elevator pitch comes from Valu Valu, an online marketplace for video games whose prices are based on dynamic scientific pricing, creating the optimal price for both the seller and the buyer. The pitch was concise and outlined the service the the site is delivering well, but didn’t tell us how Valu Valu will make money. After doing a little bit of research, we discovered that Valu Valu charges a 5 percent transaction fee on the total purchases (there’s no transaction fee charged to “local” transactions). The site currently features video games but plans to expand to other markets in the future.
Founded by ex-Microsoft techies Emmanuel Marot and Bruno Botvinik, Valu Valu uses a proprietary scientific pricing algorithm that continuously optimizes prices based on market conditions, a.k.a. supply and demand, so that buyers are happy with prices of goods (and thus will make purchases) and sellers make more money. The seller’s price is determined automatically, giving sellers limited control of the price of their goods. Other online marketplaces, like Ebay or Craigslist, allow the seller to determine the price of the item being sold. But Valu Valu’s method saves sellers’ time by establishing a set price, and cuts out haggling or auctioning time.
Of course, Valu Valu will face competition in game sales from popular online retailers like Amazon.com and GameStop’s EB Games. I did a side by side price comparison of the “James Bond 007: Quantum of Solace” game for Playstation 3 between Valu Valu and Amazon. Amazon’s price for a new game came in $10 lower than Valu Valu’s estimate for a brand-new game. The Valu Valu’s product that was actually being sold was “just like new” (which sounds like a nice way of saying used), but even Amazon’s used Bond game were selling more than $10 lower once again.
Valu Valu just launched the beta version in February, so hopefully the start-up will be able to attract more users in the future. I think Valu Valu may be on to something. It seems like an innovative technology that needs to be tinkered with a bit more.
Here’s a screenshot: