The Business Model

Revenue Streams

• Commission on sales going to business and “Xchange Site”

• Ad revenue (Added later)

Customers

• Occasional traders of used items who feel unsafe meeting strangers to negotiate and exchange items. Typically waste-conscious and would prefer not to donate items so they can make some money back from them. 

• Side hustlers, focused on making a few dollars on the side of their regular occupation. Often “flip” furniture and other used household items they find online, at thrift stores or garage sales. 

• (Less so:) Professional used item resellers who frequent online marketplaces like eBay, Facebook Marketplace and Mercari in search of bargain collectibles and niche items to resell on their platform of choice. Values high-quality listing details and specifications. Has had some bad experiences trading and is always looking for safer options that are fair to the seller. 

Key Partners

• Xchange Sites: Local small businesses who are willing to facilitate trades within their storefront for a percentage of the sale, foot traffic, and an opportunity to advertise their business on the platform. 

• Stripe Payment Processing

Empathizing

We gained some valuable insights through the course of research with traders: what traders expected to see when analyzing a deal; how far they were willing to travel and how long they expected to wait to drop off or pick up an item; when and how they expected to pay or be paid. There were, however, some challenges we uncovered that would need to be solved for launch.

Growing competition for non-meetup used item sales

Some users were already accustomed to using no-contact methods for trading used items online, with shipping options available through Facebook marketplace and another  option which was even more convenient: Mercari, which facilitates local pickup and delivery via rideshare couriers. With established brands already making waves in the market, we needed to find a compelling unique selling point for our product. 

Solutions

1. A focus on anonymity and a lack of negotiation

Sellers save time and stress by not having to communicate with buyers

Traders retain their anonymity by using a username and not needing to meet the buyer themselves

2. Large item sales through select “Xchange Sites”

An affordable, convenient, zero-interaction option for local used furniture and appliances

Users were unsure about ZERO communication

We found that some users were uneasy with the idea of zero communication with traders on the other side of a deal. They saw the merit in it as many had experienced harassment, “flakiness” and inevitable haggling regardless of the listing price. They just couldn’t shake the need to receive requests for information when selling an item and felt that they may lose sales due to missing details. Some also felt a need to speak with a buyer to determine their trustworthiness. 

Solutions

1. Suggest an Edit

We landed on the idea to allow buyers to anonymously “suggest an edit” for item listings using an open text field, set to disallow phone numbers and email addresses. Sellers would be notified of the suggested edit and have an opportunity to change their listing.

2. User Stats & Reviews

We implemented a “description quality” review system whereby users can simply give a thumbs-up or thumbs-down for the quality of a seller’s item description and imagery. Additionally, we showed how many times a seller had failed to drop off an item.

Low revenue projections at launch

The revenue stream wasn’t going to be significant enough to support ongoing development of the product in the short term, and the MVP budget was wearing thin. We needed to pivot to implement an additional revenue stream that wouldn’t impact user experience. 

Solution

We planned to integrate Google Ad Manager into the app - we changed from allowing Xchange Sites to have free ads in perpetuity through the platform, to linking out to run ads through Google Ad Manager as a direct sale. This would also enable us to expand our reach and allow a broad range of advertisers to make the most of our audience via Google’s ad Network and Ad Marketplace solutions. 

No Time or Budget for Item Cataloguing

Since support would be a challenge in the short term after launch, we needed a simple DIY solution for users to be able to organize and filter items past category, subcategory and description. We also wanted users to be able to help us define further subcategories for future.

Solution

A tagging feature

We decided to implement a tagging system on top of categories and sub-categories which we had aggregated from competitors. We will watch popular tags over time and develop our specification attributes as needed. 

Feedback is key

By keeping a close relationship between design and development throughout the design process, we were able to pivot to make adjustments and compromises for better development efficiency. Working this closely saved us time in development and meant we could spend more time on additional features and development of the roadmap.

ShopXchange launched in January 2024 in the Fort Smith Metro area. We’re excited to hear more feedback from customers and add new features as needs arise.