Two Sydney-based entrepreneurs have set their sights firmly on the United States, travelling to Silicon Valley to score funding, after changing the name of their business, Wyngle, to suit US consumers.
Damien Cantelo and Sebastian Langton – who are currently in Silicon Valley – are the founders of Wyngle.com.au, a new category of online retail dubbed “ratio buying”.
Instead of offering discounts, Wyngle offers shoppers the chance to pay $1 for a product instead of paying full price.
“We negotiate with brands and distributors to acquire products at reduced prices, allowing us to offer the $1 items,” the website says.
“Because we don’t discount their prices, Wyngle is often offered better margins than usually available. This allows us to pass on these savings to [customers] in the form of $1 products.”
“So if the ratio is one in three, for example, and you buy three, then you’re guaranteed to get one for a $1.”
Langton says while Australian consumers have no problem with the name “Wyngle”, US consumers were less impressed, claiming it sounds like “wangle”.
As a result, Langton says the US site, which hasn’t yet launched, will be known as Wynbox.com.
“We did a lot of user resting, and spoke to friends and family. ‘Wyngle’ was too close to words that have a negative connotation, so it was a fairly easy decision for us [to change it],” he says.
Langton says Wyngle has two types of customers – existing retailers who will use the technology on their own sites when they want to drive sales, and consumers who “follow” particular brands.
“We’re licensing our patented technology to major online retailers and, in the future, to offline retailers looking to move online,” he says.
“There are a few businesses that have signed up for the technology, and we’re in the process of integrating that technology… We’re talking to people like ASOS.”
“We’re targeting more premium brands that are not necessarily interested in discounting. Other examples might be retailers like The Iconic.”
Langton says the Wangle concept would also work well for high-end labels such as Versace and Louis Vuitton.
“They don’t want to tarnish their brand by discounting but they still want to encourage consumers to shop with them,” he says.
With regard to Wyngle’s ideal “Joe Public” customer, Langton says he or she is more interested in the value of what they’re getting than the price.
“We’re looking at that section of the market that are brand advocates. They love the product, they want the service, they want the experience and they’re happy to pay the fair price,” he says.
The company has taken out a local patent on ratio shopping and is in the process of securing a global patent. Langton says the real challenge, with regard to patents, is the cost.
“As a start-up business, it’s very hard to find the resources [to secure a patent]. We’ve been very lucky in the sense that we’ve come up with something very unique,” he says.
“We’re fairly sure everything will progress in the right way.”
It’s worth noting Wyngle is yet to turn a profit. It started up with a small amount of capital from Langton, and $100,000 in early-stage investment from Green Lane Digital.
In September, Wyngle earned another $100,000 from family and friends, and technology network the Sydney Angels group.
Langton and Cantelo are currently in Silicon Valley to pitch to investors to fund the US rollout of the business.
“We came across with the Advance Innovation Program… A program like that is something I’d highly recommend for anyone,” Langton says.
“[It has helped us] restructure our pitch for the American market… which places more emphasis on the actual team and the character of the people within that team.”
Langton says any additional funding will be used to bring on a technical partner or co-founder to “take care of further development”, and possibly a marketing and communications professional.
The business, which currently outsources all of its technology, will also look at bringing its technology in-house at some point.
Langton says he’s proud to be flying the flag for Australian innovation, particularly in the retail sector.
“Discounting can’t continue to go down the path it is. Five years down the line, you won’t be able to sell much if it’s 100% off,” he says.