Mike Tyson unveils new website to help combat inflation

Key Concepts

• Federal Reserve Interest Rate Cut: The Federal Reserve lowered its benchmark interest rate to between 3.25% and 4%.
• Inflation: A general increase in prices and decrease in the purchasing value of money. Consumer prices rose 3% annually in September, exceeding the Fed's 2% target.
• Cha-Ching: A website and platform where merchants compete to offer shoppers the best prices and then return a portion of the price to consumers.
• Price Comparison Websites: Platforms that help consumers find the best prices for products across different merchants.
• Merchant Fees and Markups: Fees charged by online platforms to merchants, which can lead to increased product prices for consumers.
• Cannabis Legalization: Advocacy for the legalization of recreational cannabis, emphasizing education and safety.

Federal Reserve Dissent and Inflation Concerns

Jeff Schmidt, President of the Kansas City Federal Reserve, dissented against a quarter-point interest rate cut at the Federal Open Market Committee meeting. His primary reason was high inflation, which he fears will be exacerbated by making borrowing cheaper. The current inflation rate, with consumer prices rising 3% annually in September, remains above the Federal Reserve's target of 2%.

Introduction of Cha-Ching and Mike Tyson's Involvement

In response to persistent inflation, former world heavyweight boxing champion Mike Tyson is partnering with a website called Cha-Ching. This platform aims to address high prices by creating a competitive environment for merchants to offer the best deals to shoppers and subsequently refund a portion of the purchase price to consumers. Mike Tyson and Cha-Ching CEO Matt Shagru discussed this initiative in a Fox Business exclusive.

Mike Tyson's Motivation and Perspective

Mike Tyson explained his personal connection to the issue of poverty and high prices, stemming from his upbringing. He stated, "I come from this background and I come from where all the food you ate was what you stole and it was just a bad situation." He views Cha-Ching as a "life saver" for people struggling with the cost of living, especially in light of current government shutdowns that could impact essential benefits like food stamps, a program he himself relied on in the past. He emphasized the platform's ability to help people find the "cheapest price in the world" and called it a "no-brainer."

How Cha-Ching Works: A New Approach to Price Comparison

Matt Shagru elaborated on how Cha-Ching differs from traditional price comparison websites like Google or Amazon. He argued that existing platforms, including those utilizing AI chatbots, often make money through advertising. This business model necessitates that merchants bake margins into their products to cover advertising costs, leading to higher prices for consumers.

Cha-Ching's methodology involves surfacing the entire internet's offerings to users. When a consumer searches for a product on Pricefighter.com (a related platform), the system displays the full spectrum of prices from numerous merchants. Shagru cited an example of Ray-Bans, where the price spread across 92 merchants ranged from $150 to $450, a significant difference that is difficult to uncover on conventional platforms.

Addressing Merchant Fees and Their Impact on Prices

Shagru explained that third-party merchants on platforms like Amazon often have to pay substantial fees, sometimes up to half of their revenue. These fees force merchants to increase their prices to remain profitable. Cha-Ching aims to circumvent this by allowing merchants to offer their best possible prices directly to consumers, regardless of the fee structures imposed by other platforms.

For instance, when searching for AirPods, multiple retailers like Best Buy, Amazon, and Walmart compete to win the order. Cha-Ching's mechanism facilitates this competition, enabling merchants to offer the best price they can, irrespective of their internal economic structures.

The Cha-Ching "Payment for Order Flow" Model

When a consumer finds a good price on Cha-Ching, say $120 for AirPods, they can receive a portion of that price back. Shagru described this as a "competitive process for your order," akin to "payment for order flow" but applied to retail. Cha-Ching facilitates a real-time auction where multiple sellers compete to offer the consumer the best deal. With 25,000 merchants competing across every search and covering over 99% of the U.S. and North American e-commerce market, consumers can receive money back. Mike Tyson humorously referred to this as a "website auction."

Mike Tyson's Role and Vision for Cha-Ching

Despite admitting to being "computer illiterate," Mike Tyson is lending his name and reputation to Cha-Ching due to his strong belief in its mission. He hopes the platform will help average Americans, particularly those facing economic hardship. He reiterated the potential for people to "eat with this" and highlighted its importance during government shutdowns when food security is threatened. He proudly stated, "We chop prices and knock them out," aligning with his boxing persona. Tyson confirmed he is not taking a fee for his involvement.

Discussion on Floyd Mayweather Fight

The conversation briefly shifted to Mike Tyson's potential boxing match with Floyd Mayweather. Tyson confirmed they have both signed on, but a location has not yet been determined. He also commented on Mayweather's interest in fighting Manny Pacquiao, expressing skepticism about its likelihood.

Real-World Example: Dyson Vacuum Cleaner

Matt Shagru provided another example using a Dyson vacuum cleaner. He explained that while some merchants might list it for $370, others are willing to sell it for $200. Cha-Ching's platform allows consumers to see this entire pricing table and make informed decisions. The platform enables consumers to receive back anywhere from 50% to a few percentage points of their purchase price, depending on the merchant. The key is empowering consumers with information and the ability to choose based on factors like merchant trust and free shipping. Tyson humorously added that he would opt for a used vacuum cleaner, demonstrating his own savvy approach to saving money.

Advocacy for Cannabis Legalization

Mike Tyson also discussed his recent advocacy for legalizing recreational cannabis in Pennsylvania. He noted that many surrounding towns and cities have already legalized it. Tyson believes the primary obstacle is a lack of education about cannabis and its benefits. He likened the growing cannabis industry to a "little small snowball" at the top of Mount Everest, suggesting that it's an unstoppable force. He advocates for legalization to ensure safety and proper regulation, comparing it to the alcohol industry where consumers can hold sellers accountable for selling "bad alcohol." He wants the same accountability for cannabis products, allowing consumers to report issues and have arrests made for unsafe products. He believes legalization will also allow for taxation.