Woot.com takes an unusual approach in the crowded field of Internet retailing. It sells just one item each weekday, starting at midnight local time in suburban Dallas, where the company is based, until it sells out.
Woot — short for "Wow! Loot!" — doesn't tell its shoppers how many watches, laptops or hot-tub phones it has. It just sells what it has in stock, and when the item is gone, sometimes within hours, that's it — there are no rain checks, nothing else to buy. Shoppers have to wait until midnight for the next offering.
The site has developed a fanatical following.
Each weekday at midnight, self-described "gadget geek" Dan Paddock is poised in front of his computer on his favorite Web site, looking for bargains too good to pass up.
Paddock has bought a printer, a cordless phone and other items on the site, Woot.com. His all-time best deal was a $7.99 Woot T-shirt that arrived with a surprise — a free wireless keyboard and mouse. Paddock, 30, a telecom engineer, swears he installed a wireless network in his Dallas home just to feed his Woot habit.
"I can check Woot from my bed with a pocket PC," he said. "Literally, the only thing I've ever used it for is checking Woot."
The limited-supply, lottery-like nature of the site makes it exciting, said Mike Masnick, who runs a tech blog from Belmont, Calif. Masnick bought a $99 watch that doubled as an MP3 player, a digital camera and a pocket-size printer on Woot.
"It's a different approach that makes it more of a game than going to Amazon.com," Masnick said. "EBay does it with bidding. With Woot, it's buying something that's only available right now."
Most Woot specials are consumer electronics. Some of the items are discontinued or overstocks. Prices are low enough to be eye-catching.
Specials have included a Hewlett-Packard notebook computer with a 3-gigahertz processor and 17-inch screen for $1,200, and Dell computer speakers at $30 a pair, which sold out in a record 23 minutes. Many other items are not familiar brand names.
Items that sold last week included a $79.99 pendant that's actually an MP3 player with 256 megabytes of memory — it "could easily be mistaken for a piece of jewelry," the site boasted — and a device to transmit your music over any FM radio for $12.99. Shipping was $5 per item.
About 80 percent of the daily items sell out, but occasionally there are flops, Woot founder Matt Rutledge said. One was a Dick Tracy-like watch loaded with features. "We actually sold several hundred, but the tone in the community was that it wasn't a very desirable item," Rutledge said. "We wouldn't do that one again."
Woot, which started in July, is Rutledge's second business. Rutledge, 33, dropped out of community college 12 years ago to become a wholesale distributor of closeout electronics goods. Woot seemed like a natural extension, and the business shares the distributor's Carrollton, Texas, warehouse.
Woot's seven employees call manufacturers in a constant search for hot items. When they find one, lot sizes range from 50 to more than 1,000, Rutledge said.
"We're fans of gadgets," Rutledge said. "That's our core demographic. This is a big hit in the 20-something crowd, and probably a more male demographic. Our crowd is very Internet-savvy. They're online 23 hours a day."
That's clear when reading the customer comments posted on the Woot site, which review the good, the bad and the ugly aspects of items in a young, irreverent tone.
Keep coming back
Adam Sarner, an Internet-commerce analyst for technology researcher Gartner Inc., said the commentary has created a buzz that keeps customers coming back to Woot. Still, he said, the Web site's success hinges on the consistency of its products.
"There has to be excitement about everything," Sarner said. "If Woot puts up five straight things that are crap, you don't go back on the sixth day."
Carrie A. Johnson, an analyst at Forrester Research Inc., said Woot has tapped into the Internet's social nature while offering a good outlet for liquidators.
Still, Johnson said, Woot's "short-term pop" may fade because the one-item approach won't generate enough loyalty or repeat customers. She said sites with more offerings, such as Overstock.com, stand a better chance.
Woot.com will probably approach $5 million in revenue for this year, Rutledge said. The company is profitable "in an operational sense" by sharing space and borrowing employees from the distribution business, he said.
Rutledge said he plans to boost revenue by selling more advertising on the site and running contests. But he won't alter the one-item-a-day approach anytime soon.
The company is already inspiring imitators who combine daily offers with a chance for customers to spout off. Deal.com, an extension of BuySeasons Inc. of New Berlin, Wis., offers a daily special that starts at full price and is discounted every 15 minutes.
"We're happy our concept is successful," Rutledge said, "and we expect people to copy us."