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Online electronic consumer goods retailer Kogan is inviting buyers into its supply chain, by choosing to purchase products whilst on the production line.
Kogan’s system is one step back from computer manufacturer Dell’s ‘make to order’ model, as Kogan will still manufacture the product to stock even if it’s not bought prior.
Kogan calls it ‘LivePrice’, and if you buy a product while Kogan is still making it, you'll now be offered a price that is substantially lower than the ex-stock price. Conversely, however, you may wait up to two months for delivery.
A video explaining LivePrice is available here.
Consumers can choose when in the production cycle they buy a product: whether during production, shipping, or when the product is in stock. The earlier a customer buys the product, the lower the price.
Ruslan Kogan said: “LivePrice harnesses the openness of the Internet to cut out the hidden cost of finance built into price tags of all goods.
“Even though no other manufacturers or retailers are up front about it, every product you purchase has a hidden cost of finance included in its price. Credit can be given by a supplier, bank, or silent investor, but they all have one thing in common – they want a huge return on the money invested into the production cycle.
“At Kogan, we believe in transparency. We're not scared to admit that manufacturing new products means that money needs to be spent up front. We just don’t want the customer to have to foot that bill.
"The LivePrice system means that a shopper buying a product when it's in stock will still get our already market-leading price, but by joining us early on in the production cycle, shoppers can benefit from further discounts that are completely unheard of.”
Kogan says that customers have purchased $329,965 worth of products through the LivePrice model in the first 24 hours.