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.
Chicago-based Enable Holdings Inc. plans to launch RedTag.com on Friday and sell retailers’ excess inventory at a fixed price. Its shipping charge will undercut a similar site, Overstock.com Inc., 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,” said Enable Holdings’ CEO, Jeffrey D. Hoffman.
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, Shop.org.
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 RedTag.com, which shuttered in 2004. Enable Holdings, which runs uBid.com, 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. Sometimes companies want to get an older model — a laptop, for example — off store shelves to make room for a new one.
By selling such excess goods, a site like RedTag has more flexibility than regular retailers in negotiating with manufacturers on the final price of a product,…