One of the wild cards in this year’s back-to-school season, outside of the unsettled matter of whether classrooms will open, has been electronics.
If parents show up and buy new laptops, tablets and iPhones for the new home-schooling environment, the retail industry has a hit season to celebrate. However, so far electronics have been part of the back-to-school waiting game, with the possible exception of an unusual suspect: recommerce.
The market for used electronics is alive and well at sites like eBay, OfferUp and one of their less-publicized competitors, Swappa. The 10-year-old specialty recommerce company has quietly put up solid numbers every year from just north of $500,000 in seller proceeds in 2011 to more than $100 million in 2019.
As is the case with most every company in the retail space, projections for 2020 are hard to come by, but CEO Ben Edwards told PYMNTS that back to school has been alive and well from his perspective.
“We've seen an increase in laptops and tablets, and … we're hearing from our users that it is … definitely a factor,” said Edwards. “And I think part of the reason for that is that we are definitely a site for value conscious consumers and people trying to save money. And I think with what's going on now, there's so many factors at play, but it's now more than ever people are paying attention to the dollars they spend and want to make sure they get a good value. And that's what we're all about.”
Swappa specializes in used tablets, cellphones, laptops and even cellphone plans. Edwards said two things separate his company from the eBays and Craigslists of the world: fee structure and order safety.
On Swappa, sellers pay no fee to list their equipment. Buyers pay a fee that averages about 3 percent compared to eBay’s fee for around 10 percent.
On the safety side, Edwards said Swappa has invested time and money into a complex vetting and guarantee process. A potential seller registers with the site, and then has to submit a serial number that is checked against potential theft registries. The seller then has to submit photos of the goods to be sold, which are authenticated by the vetting team. Only after the seller is paid is the transaction considered final.
Payments at Swappa are limited to PayPal, which Edwards said is by design. Swappa is an official PayPal strategic partner, and Edwards said he likes the company’s ability to secure payments and, if needed, resolve disputes.
“Paypal's been a great partner for us to work with,” he said. “The main reason we started was one because its ubiquitous but also just in terms of the features that they offer. There's no shortage of services that will help you move money from point A to point B. But they provide kind of a whole ecosystem allowing consumers to exchange money safely, and that’s no small feat. And that's not something anyone can take for granted right now.”
Edwards said in addition to being value driven, his customers are also sophisticated. He has a dedicated content team that posts exclusive stories about deals to be chased, pricing trends and new developments in specific product categories. When new products start to be publicized, such as the iPhone 12, Swappa customers start to anticipate the releases, and they post their older generation models on the site. The content also serves as a search engine optimization (SEO) magnet and marketing tool. Most of Swappa’s marketing is done via word of mouth.
Edwards said he is also a believer in transparency. He has listed the company’s earnings goals and achievements on the site for every year it has been in business. He admitted that this year’s posted goal of $120 million in seller proceeds will be tough to hit due to the ebbs and flows of the pandemic. But he said he thinks a good holiday season could get it close to the goal.
“I probably would have a much more competent prediction if this weren’t the year we’ve had so far and all the unpredictable dynamics we’ve seen,” he said. “But I think we could hit the number. I do know that our focus is certainly going to be the same. We’re going to help our users buy and sell electronics at a good value. And we've got some creative ways that we're hoping to do that.”