Alphabuyer offers ‘group buying’ for electric bills

Alphabuyer Inc., a year-old Paoli e-commerce company that enlists customers for "group buying for your bills," probably could have picked something a little sexier to start with than the humble electric bill.

But since launching last year with discount offers for Peco Energy Co. electricity customers, the group-buying service has expanded into three other states including New Jersey, and other commodities like natural gas.

Cofounder Kevin Johnson imagines that eventually every savvy, penny-pinching customer would go through Alphabuyer to join groups to buy anything from discounted Internet and cellphone service to gasoline, heating oil or antivirus software subscriptions.

"The sky's the limit of categories," said Johnson, Alphabuyer's chief executive. "We just picked the most unglamorous one to start on."

Alphabuyer is fashioned on a model made successful by Groupon, the online group-buying marketer. It uses social media and viral marketing to develop networks and spread the word about current offers.

But Johnson and cofounder John Raisch bridle at comparisons to Groupon, which they say induces customers to buy things they don't necessarily need. Alphabuyer is all about squeezing discounts on bills customers are already paying.

"We don't really like to be compared to Groupon," said Raisch. "We're not really like them at all."

Rather than simply matching new customers to energy suppliers, Alphabuyer is designed to build relationships with customers, alerting them when better deals might be available in the future. "We've got your back," the company's promotions proclaim.

Alphabuyer melds the experiences of its 39-year-old cofounders - Raisch's background in online retail and Johnson's experience as a procurement specialist, fixated on "spend analytics," the art of identifying costs and negotiating with suppliers to get the best deal.

Johnson, who put up $800,000 of the $1.7 million invested in Alphabuyer so far, also owns Dryden Procurement Technologies L.L.C., which helps big companies buy more effectively. Raisch has extensive e-commerce experience with CDNow and GSI Commerce Inc., the King of Prussia company acquired by eBay Inc. this year.

In 2010 the two saw an emerging opportunity in Pennsylvania's newly deregulated utility markets, where energy companies were aggressively pursuing retail customers free to choose alternative suppliers, often at a discount to incumbent utilities.