Startup Helps Small E-Businesses Stand Even With Amazon, Provides Pricing as a Service

Businesses can get almost anything they need “as a service” these days. Platform as a service (PaaS), software as a service (SaaS), mobility as a service (MaaS). A company called Black Locus out of Carnegie Mellon University has developed a service for automated pricing optimization and revenue management solutions for online retailrs. They are calling it pricing as a service (PraaS?).

BlackLocus is attempting to deploy advanced machine learning and revenue management techniques in a cloud-based service that would give small and medium businesses the same types pricing knowledge and advantages that industry leaders like Amazon deploy. Competitive product pricing for long-tail merchants online is a difficult goal to accomplish. Black Locus attempts to take the guesswork out of the process.

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“Though a combination of machine learning, image similarity, named entity recognition, and text-mining we find and match competitors for any product being sold in the web,” said Black Locus CEO Rodrigo Cavalho in an email to ReadWriteWeb. “Using our Price and Revenue Management Intelligence system we provide optimal pricing, and integrate with an e-tailer’s shopping cart platform to allow our clients (online retailers) to quickly and easily adjust prices and significantly increase sales.”

Black Locus claims that it has been able to boost its clients’ profits by 15% through the use of its platform. It is an innovative idea and one that could have legs. Essentially, it is a SaaS offering aimed at the under-served middle of the online e-commerce market that brings in pricing information across the Internet to the merchants fingertips. The company just raised $2.5 million in Series A funding from DFJ Mercury and Silverton Partners.

“The rapid growth of online commerce has created terrific opportunities for both large and small online retailers,” said Blair Garrou, managing director of DFJ Mercury, in a press release. “Our firm was impressed with the BlackLocus team and believe their cloud-based pricing optimization tools level the playing field for small and mid-sized online retailers.”

Black Locus takes stock of pricing and inventory levels and delivers recommendations to the merchant in terms of what they should price their products and how to position them.

There has been movement recently in aggregating data in the realm of e-commerce. The more data that companies or individuals have, the better they are positioned, especially when it comes to any type of sales vertical. Project Slice recently launched as a service that aggregates users purchase receipts (and can be found in a featured tab in Yahoo Mail). Black Locus is reminiscent of the same type of data aggregation as Project Slice. It is difficult to take disparate sources of information and drag them into one location tailored to the needs of the user. Black Locus is on that road for small and medium businesses, bringing usable data to the masses.

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