This blog post is my take on why building a marketplace for second-hand is nearly impossible today with Craigslist blocking the way for others.
Disclaimer: I tried to compete against Craigslist with Shook, an auction marketplace for second-hand (that later turned into listings marketplace) and failed, these are my thoughts.
Before reading this I highly suggest reading this blog post on building marketplaces in general. I’m about
to talk about building an online second-hand marketplace.
Craigslist’s Rules
Craigslist are today’s leaders in online listings and their service is free of charge. By doing so, they’re actually forcing everybody else to play by their rules. When we started Shook,
we wanted to charge an %8 fee of a transaction (a completed sale). We soon started getting feedback from potential users asking “why should I use Shook if Craigslist is free?”.
It soon became clear that a lot of people did not want to pay a fee for what they could get for free, even if our service was better.
By doing this, Craigslist are making it even harder for companies to innovate the second-hand space.
Building Supply
In the article mentioned above, they explain that usually marketplace builders start with fulfilling the supply (sellers & items) before bringing in demand (buyers).
However, in second-hand, it’s much harder. Here are a few reasons:
- Items are disposable. Once they are sold (on your marketplace or on Craigslist) they’re gone. Even if they don’t get sold, after a while there’s a chance the seller just threw it away.
- Limited inventory. Even Shook’s biggest fan can only sell items he owns and does not need anymore. In comparison to Etsy, where one seller can create hundreds of items, sellers on Shook are ‘worth’ less.
- Sellers are random. They can’t be defined demographically and they don’t surf any specific website. This makes it much harder to target.
People Are Fine
When we started, our assumption was that people were not happy with Craigslist because of all the fraud and scam going on there.
It may be true that people are not happy, but today I’d argue that they are fine with things as they are. They get what they wanted in the first place – selling their item.
Second-hand sellers are random people who seek to turn something they have into money and their best chances of doing so are on Craigslist.
They may not love it, but it works for them. To beat Craigslist, your value should be more than just a better experience.
That’s my take on the second-hand space. Leave me a comment and let me know what you think.
A few years ago Facebook announced ‘Facebook Connect’ – a button each website can add to enable users to connect to it with their Facebook identities. On the face of it, there’s nothing special about it. However, this small button has created a whole new experience on websites and services that didn’t exist until then. Big companies that looked like their domains couldn’t be innovated anymore are now shaking in front of the startups that utilize the social network to gain momentum and user experience.
Here are some of the coolest services around that augment the social network:
- Gogobot - Get tips from travelers like you.
Gogobot’s unique service let’s you ask questions about places you’re interested in visiting. So instead of going to TripAdvisor and getting tips from strangers who sometimes are dishonest, you can ask your Facebook friends questions and get them to reply to you directly on Facebook. - Shook - Turn your belongings into money!
Shook enables users to quickly upload an item for sale, in a fun auction-style way. Users then share to their social networks and invite friends to help them share further. Their item soon reach thousands of people who see the item and feel comfortable buying from them as it comes with a good reference. Instead of needing a track record in order to gain trust, the seller’s connections are the trust. The perfect solution for anyone who justs wants to sell their old belongings and doesn’t want to go through all the trouble of selling on eBay / Craigslist.
An Example Item Page
- Spotify - A new way to listen to music.
Pandora was once the hottest service for music discovery online. Spotify is tackling this with a new angle of discovering music. Instead of letting a machine choose for you, they show you what your friends are listening to. This lets users discover new music in a fun way. - Branchout - Land your dream job.
With Branchout, young people who are already connected on Facebook and have many friends don’t need to start building a professional profile on Linkedin. Instead of starting from scratch, on Branchout you get all your Facebook friends to vouch for you. As the saying goes, it’s a small world after all, and the personal recommendation can definitely be the decisive factor when you’re being interviewed for a job.
Branchout Homepage
- Xobni - The only contacts app you’ll ever need.
Instead of having to keep an address book updated with all your contacts and taking pictures of everyone to make your phone friendly, you can just install Xobni. Xobni will auto-sync all your data from the different social networks and online services and create an improved address book on your phone or computer.
I’m always interested in learning about more online tools and services, comment with your favorite social media tools.
Well, it seems as though I’ll need to say goodbye to my piano soon. I posted it on Shook and, as we excepted, someone bid on it shortly after.. Well, at least it was for a good cause 
Want to bid on the piano? Click here.
