Woot co-founder Darold Rydl on creating a shopping event out of thin air

Darold Rydl knows a thing or two about online shopping. Two decades ago, he helped launch the ecommerce business of electronics wholesaler Synapse Micro, which soon turned into Woot, one of the internet's first daily deal sites.

At Woot, he helped create the company's Woot-off shopping events as well as a culture that gave the company a cult following, ultimately resulting in an acquisition by Amazon in 2010. Along the way, Rydl learned how to do deals the right way, figured out how to keep customers engaged and discovered why creating a shopping event out of thin air is not as easy as it might seem.

Read on for Rydl's insight. His remarks have been edited for brevity and clarity.

Woot was born out of a computer distributor. We would buy a pallet load of end-of-life products, or sometimes even a truckload. We would sell through everything, and we would have the last 50 pieces or 100 pieces left. The challenge was to get rid of those last 50 or 100 pieces. So we thought: We'll just make our own website, and sell one item a day. It'll launch at midnight. If it sells out early, that's fine. We're not going to work hard to put up something else. The next one will just launch at midnight.

The idea of the Woot-off was a customer's suggestion, who in one of the forums had said: "When you get down to one piece of a bunch of stuff, you should just line up all of those small things and sell them." So we coded it, came up with the name, and it quickly became a thing. We would run a Woot-off every month, and everybody would come and hang out and wait to see what the next item would be that popped up.

We would also add different random things. Throw something unique and funny into the mix to keep people engaged. For a while, bacon was a big deal, so we sold a ton of bacon salt. At one point, as a joke, those guys had built a bacon coffin, an actual coffin made out of bacon. They did it as a marketing gimmick, and we put it up and sold it in a Woot-off. That was probably the weirdest thing we ever sold.

Product write-ups were definitely a big piece of the Woot culture. You never knew whether it was just going to be something funny about the product, or some sort of tie-in to a current or historical event. But it was always going to be something funny or cheeky that you wouldn't want to miss out on.

Another part of that culture were Woot sites that monitored sales and sent out SMS texts or some [other] kind of a notification. This was 2004, 2005, and Twitter and Facebook, social media just didn't exist yet. We encouraged it, because it was something we didn't have to build, that essentially somebody built for us.

We kind of ran into a wall with our business model right about the time when Amazon bought us. At some point you just can't get enough product. We had a couple of days where we sold, for example, 100,000 SD cards. What's the next step up? Are you going to get 150,000 units of something? Manufacturers do make mistakes when they produce too much, but they don't make big mistakes like that.

Lots of people are trying to come up with their own shopping events, but it's really difficult. If somebody went out and said: I'm going to make the third Thursday in October a new shopping holiday, I don't know if anybody would be going to buy into it. And that's really what it takes. You [have] to get the customer to buy into it, and believe whatever the story behind it is. I think retailers are better off just trying to get their customer more engaged as opposed to trying to create a new holiday.

The main thing companies can do nowadays to stand out is to offer a more personalized shopping experience. In the last decade, the big guys have essentially sucked much of the business away from everybody else, but it's very impersonal. If you order something from Amazon, and click on a roll of toilet paper, they'll show you toilet paper for the next month. They're using data to try to make it personal, but it's not really working. One of the things that we did at Woot was to engage with customers in the forum, talk to them. That's really the primary way that smaller retailers can compete against the big guys now. Be more engaging, talk to the customers, and have more of a personal relationship, because that's something that Amazon just can't do.