PayDragon launches mobile checkout for grocery items

If you're like me, you often say to yourself, "Gotta get that [item]," and you create a laundry list in your mind of must-buy things. But, if you're like me, you also forget, or wait until the last minute to make the purchase. These "need-to-buy-items" moments often occur while I'm out and so going to my computer to buy these items online isn't an option. And, driving to the store is a pain. What can I say? I'm lazy when it comes to shopping. What do you do?

At least for grocery store non-perishable items, like lotions, paper towel, peanuts, and 5,000 other items you might find at your local Whole Foods or Safeway, you can use PayDragon.

PayDragon launched Tuesday an app that allows users to buy items from their mobile device by scanning the barcode of the item.

"We catalogued what we could do in a super market," said Hamilton Chan, founder and CEO of PayDragon. "You scan the UPC product code. That takes you to a purchasing page." Users can purchase one item and pay retail price, and get free two-day shipping.

"We don’t stock the items. But we only put the items we know that we could easily retrieve," said Chan.

In other words, PayDragon goes out to the store and buys the item retail one at a time, each time an order comes in, though Chan says his team is able to buy a lot of items at a discount.

OK. So you're asking, "how can PayDragon make money from selling one item at a time and with free shipping to boot?" After all, on one hand, paying retail price for one item, and then paying a couple bucks to ship it seems like a losing proposition. On the other hand, allowing consumers to purchase in bulk means PayDragon has to pay for expensive shipping costs. (PayDragon doesn't allow people to buy 50 pounds of dog food to avoid having to paying costly shipping expenses.)

"It's OK if we lose a little bit of money [if someone purchases] on one bottled water," said Chan. "We don't want to force people to buy a case of everything... [but] we want to make the impulse purchase possible."

The new service is available Tuesday morning.

The YC-backed company, with $1.3 million in funding, started originally offering users an ability to use their mobile phones to order food from their local restaurant and pay from their phones. To date, the company has 40 restaurants in the LA area. But signing up restaurants is a feet-on-the-street-intensive business. To this end, PayDragon started setting their sites on enabling people to shop for impulse items.