The implicit fallacy (or explicit one, in the case of the quoted company blog post) here is that selling TP mail-order over the internet is a new thing. A friend of mine was an undergrad back when they were starting Target.com. Someone on that founding team spoke to his class and said they were hemorrhaging cash trying to ship people their toilet tissue. Alice is going down what appears to be the same route while offering free shipping!

Something’s gotta give. There must be something in their business model beyond a pure e-commerce play. Otherwise, I just don’t see how they can make money.

Bulky (toilet paper), heavy (liquids) products shipped for free + low margins (I’m assuming)…= ?

Anyway, I haven’t gotten a good answer to this. Maybe you know something I don’t.

The implicit fallacy (or explicit one, in the case of the quoted company blog post) here is that selling TP mail-order over the internet is a new thing. A friend of mine was an undergrad back when they were starting Target.com. Someone on that founding team spoke to his class and said they were hemorrhaging cash trying to ship people their toilet tissue. Alice is going down what appears to be the same route while offering free shipping!

Something’s gotta give. There must be something in their business model beyond a pure e-commerce play. Otherwise, I just don’t see how they can make money.

Bulky (toilet paper), heavy (liquids) products shipped for free + low margins (I’m assuming)…= ?

Anyway, I haven’t gotten a good answer to this. Maybe you know something I don’t.

They have a different model than trying to just make money on sales. Instead they are trying to be a direct conduit between manufacturers and consumers and taking a fee for making the connection and selling access to the consumers.

I found this earlier today on CNET: http://m.news.com/2166-12_3-10270643-2.html. A quote from the article:

While Alice appears to the end use to be a reseller much like Drugstore.com or Diapers.com (I’m a Diapers.com customer, it’s great), it’s actually built on a fundamentally different business model. Alice is not a traditional middleman reseller. It takes no markup, CEO Brian Wiegand told me. Instead, it collects a “fee” from the consumer packaged good (CPG) manufacturers–the people who mix your toothpaste and put it into tubes–for shipping products out, and it passes all the customer data it collects from people buying the products back to the companies that make them. The manufacturers set their own prices.

The aim is to give CPG companies a direct pipeline to data about consumer buying behavior, and to consumers themselves. This is a move that puts them clearly in competition with their traditional retailers, but as Wiegand says, big retailers are already fighting the CPG industry by launching their own store brands. These house brands have already grabbed 20 percent of the CPG market.

Furthermore, the CPG companies are “losing their megaphone,” and need better ways to connect with their consumers. Wiegand says the efficacy of the 30-second TV spot is in steep decline. It was until recently the best way to make the world aware of things like a new scent of Palmolive. Likewise, the drop in the distribution of newspapers and their circulars is cutting off CPG companies from consumers.

I found Alice a very good online store. But what’s really interesting to me is the business model, for two reasons. First, because it points to a growing channel conflict in packaged goods that I wasn’t aware of. And second, because while Alice looks a lot like a typical retailer, under the covers it’s quite a different beast.

They have a different model than trying to just make money on sales. Instead they are trying to be a direct conduit between manufacturers and consumers and taking a fee for making the connection and selling access to the consumers.

I found this earlier today on CNET: http://m.news.com/2166-12_3-10270643-2.html. A quote from the article:

While Alice appears to the end use to be a reseller much like Drugstore.com or Diapers.com (I’m a Diapers.com customer, it’s great), it’s actually built on a fundamentally different business model. Alice is not a traditional middleman reseller. It takes no markup, CEO Brian Wiegand told me. Instead, it collects a “fee” from the consumer packaged good (CPG) manufacturers–the people who mix your toothpaste and put it into tubes–for shipping products out, and it passes all the customer data it collects from people buying the products back to the companies that make them. The manufacturers set their own prices.

The aim is to give CPG companies a direct pipeline to data about consumer buying behavior, and to consumers themselves. This is a move that puts them clearly in competition with their traditional retailers, but as Wiegand says, big retailers are already fighting the CPG industry by launching their own store brands. These house brands have already grabbed 20 percent of the CPG market.

Furthermore, the CPG companies are “losing their megaphone,” and need better ways to connect with their consumers. Wiegand says the efficacy of the 30-second TV spot is in steep decline. It was until recently the best way to make the world aware of things like a new scent of Palmolive. Likewise, the drop in the distribution of newspapers and their circulars is cutting off CPG companies from consumers.

I found Alice a very good online store. But what’s really interesting to me is the business model, for two reasons. First, because it points to a growing channel conflict in packaged goods that I wasn’t aware of. And second, because while Alice looks a lot like a typical retailer, under the covers it’s quite a different beast.