NEW YORK — With gas prices high and consumers stretching shopping dollars, competition is heating up online for deals — and a discount retail site hopes to fan the flames by shipping orders for $1.95.
Enable Holdings, based in Chicago, plans to launch today and sell retailers’ excess inventory at a fixed price. Its shipping charge will undercut a similar site, , which charges $2.95 for standard ground shipping.
“We’re willing to take less for shipping because we think you’ll buy five more items from us — as opposed to if we got as much as we could from you, shipping this product, you may never buy again,” Enable Holdings chief executive Jeffrey D. Hoffman said.
The site is coming online a few months after gas hit $4 per gallon, a milestone that caused many consumers to see buying online as a way to make fewer car trips, said Scott Silverman, executive director of the National Retail Federation’s digital division, .
Even though fuel prices have come down, he thinks the habits consumers have adopted to save gas are still in place. Cheap or free shipping could be another way to keep them shopping on the Web.
This launch marks a revival of ., which shuttered in 2004. Enable Holdings, which runs ., an auction site for excess inventory, bought the RedTag Internet address this spring from one of its major shareholders.
RedTag is selling items it gets mainly from retailers that have gone out of business or manufacturers that have produced more of a product than was sold. Overstock chief executive Patrick Byrne said his company has been feeling cost pressures from shippers such as FedEx and UPS, but he added that the company does not plan to raise its standard $2.95 shipping on orders.
Asked about the $1.95 challenge from RedTag, Byrne noted that his site frequently offers free-shipping deals and dollar-shipping days. Counting those specials, Overstock’s average shipping fee is a bit less than $2, he said.
Scott Devitt, an analyst at Stifel Nicolaus & Co., sees the launch of RedTag as a “worthwhile endeavor” that could pressure rivals such as Overstock.
“If they continue to move down this path, it may make it more expensive for others in the category,” he said.
