How to make 1 billion dollars - Sellercloud webinar with BackMarket

Webinar Transcript

Marianne Skolnik: Hello, and welcome to the Back Market webinar. I would like to thank you all for taking the time to join us today. My name is Marianne and I'm an Account rep and field mtechnician at Sellercloud. Today, we have with us both Arthur and Serge from Back Market. They'll be discussing the benefits of selling on Back Market and how to get it up and running on Sellercloud. Throughout the webinar, please submit your questions and at the end of the presentation, the Back Market team will answer some of them. Now I'll turn it over to Arthur and Serge to introduce themselves.

Serge Verdoux: Hi, good afternoon, everyone. I'm Serge Verdoux, the managing director for the US Back Market.

Arthur Delanoe: I am Arthur and I am in charge of all the sellers on the platform for the US market. And we both based in New York in Brooklyn, New York.

Serge Verdoux: So thanks Marianne for having us and for the entire Sellercloud team for the help and support getting up there. Back market for those of you who may not have heard about it, we're the first and as far as we know, largest marketplace dedicated to used and professionally refurbished electronics. The company was born in Europe less than four years ago and we managed to generate amazing success. This year, which is only a fourth year, since we were created, we're going to generate around 300 million in sales. Our growth is tremendous, we should reach a billion dollars in sales in the next 18 months. And all of that is from sellers like you. We specialize in used and refurbished electronics. So the idea of the call today is to let you know that if you're using Sellercloud, selling on Back Market is a very easy proposition and can literally happen in about one to two hours, including everything set up on Back Market and help of Sellercloud. So that's really something you should do.

You can see here the the main stats about 80,000 orders a month on the platform. We are getting close to our millions customer this year, this year, 9 million sessions. And I think the last point is very important since most of you folks are based in the US. We just raised $48 million specifically to fund the exploration of our US presence, which means a lot of investment in tools and support but also and more importantly, I think for you in marketing, the demand is tremendous. We are growing our traffic. The traffic in the US grows by more than 200% every month. And what that means is that we relax the supply, we like the products to share the demand. So that's why if you join us now you'll be able to do business right away.

And why are we special? And why are we successful? Well, because we believe that a refurbished product cannot be sold like a new one. So we've designed the user experience, both for the end consumer, and the sellers like you, which is really dedicated and really meets your needs. That's why we're winning against Amazon and eBay, in the markets when we mature. To give you some sense. In Europe, where we started, we generate five to 10 times more than those platforms in the refurbished category. The reason for this success is that we make it very easy for consumers to buy a refurbished product and more importantly, to understand what they're buying.

Looking at the screen, you see that for one particular product we took an actual listing from a few days ago. So that's an iPhone 7, as you can see under the 28 gig. For one particular product you see at the bottom, we have five main aesthetic conditions that we've defined and the idea is really to organize this market. There's a lot of humor. We are a consumer company and I'll show you a couple of examples later. So we've created some grades that you know may seem a little bit dry in the industry, but we've given you the equivalent ABCD. We've returned it into shiny, which is frankly product, which is as good as new like - an A-plus, all the way down to Stallone in reference to the famous actor Sylvester Stallone. We get beat up after a fight in Rocky, and you have few injuries. There's a price that the consumer really sees, okay? If they want a brand new, like new product, they go with 'shiny' and that's going to be more expensive. But then if they're willing to compromise with the aesthetic they can choose something a little bit more damaged and less expensive. And also you see the description under that goal that very clearly what they're getting for that price in that condition. And that's what really makes it unique.

Customers know what they're buying and so they're far fewer returns and other marketplaces where they may buy new, they may buy used, they may buy refurbished, but they don't know exactly because the platform hasn't been built around that and also, they sell across multiple types of devices.

One more thing that's important, and that is very important to you. One of the specificities of Back Market is that for one particular product, in that example, that I found success in that kind of storage and color, and one particular aesthetic rating, we only push one seller. So in that case, Koala Stash is the seller that has the buy box. And so what that does is that it allows you as a seller, once you get that buy box to get all the traffic that we're generating towards this particular product. So that means you're able to sell much more quickly the product that you have.

Then the other big difference, versus other marketplaces is that price is not the only consideration for getting the buy box. Far from it. We track about 15 quality indicators, from the rate of defective products to the number of returns because of wrong kind of upgrading through the delays in shipment, or the customer service issues that may come up so that we can push, those of you who will make the best job at managing quality of the experience, which again, is the quality of the product itself, of course, but also the quality of the customer service that the customers receive. And so what that means is that if you do well on all of these dimensions, you actually don't have to have the lowest price to get the buy box, you can sell it get all this traffic, and sell products at a much higher price than you would on other marketplaces where the price is the biggest filter that people use. So I think it’s very important to understand our success.

We are a marketing specialist, we take care of educating consumers. What we're doing is make the pie bigger. I think what you may see is that there is an established market today for used and refurbished electronics in the US, but it's kind of plateaued because you have a certain set of consumers that know that they want to buy used and refurbished, they're willing to take a bet on quality, because of that lower price. But that pie is not growing anymore. And our role as Back Market is really to make that pie grow by bringing more people - people who have not thought about buying used or refurbished before because they're worried about the quality. And so we made them comfortable in going with refurbished products, so we take care of that consumer education.

So we'll show you a couple of videos that show how we do the marketing, how we educate the customers, and how we made that pie grow bigger. By the way, I'll just use that time to remind you that you can ask questions, and we'll certainly take questions at the end of the presentation. So what you see here is an example of what I was talking about when I talk about marketing efforts and pushing the category. As I'm sure most of you know, Apple when they launch a new product, a new iPhone, they tend to discontinue the products from about two or three years, three generations before. And in the case of the product issue, they actually discontinued the iPhone 6s, which happens to be one of the best sellers that Apple ever had for the iPhone lines. But it's certainly on Back Market was the most popular and I'm sure those of you who do business in the smartphone business know it's really popular for users. So what we decided to do is to relaunch the iPhone success because we thought it deserves to be continued. And that marketing campaign that we did, so I'll just play the movie now.

So that video that we created and that you probably recognize some of the Apple aesthetics and it's kind of half-serious half parody. And that's kind of the tone that we always like to play with, actually. And it helps us get a lot of exposure we got in the US we got CNET wrote an article about that. We got Tom's guide, we got VentureBeat, a lot of very well-known publications with the 10s if not hundreds of millions of visitors looked at it themselves. You guys have a point that success is a great product and it should not be discontinued. And they also like the videos. And that's how we create more traction and a bigger audience.

Another thing we do is that we partner with manufacturers directly to promote their refurbished lines and certified pre-owned lines. In fact, in Europe, we have a co-exclusivity with Amazon where we are the only online B2C company, that is certified by Apple to sell certified Pre Owned products, which in Europe, Apple doesn't, doesn't sell directly to consumers. And you know, that kind of model is one that we may see in the US very soon. And that we actually are going to announce with a company like the Devialet, you may have heard about these. They are super high-end speakers 2000 although $3,000 a new. Devialet is actually selling on Back Market, a line of refurbished products that are refurbished in the same factories as the new ones. And they're going to be given a two-year warranty as a new product. They're going to come into the original speaker form. And what you're looking at now is just the special store that we've created for Devialet to really showcase not only their product but the fact that we're giving it as refurbished and certified Pre Owned the same quality, the exact same quality as a new product. All of these have been developed by our Marketing team, of course, working very closely with the Devialet team to make sure that it sells their value and their product lines as they would want to. For those of you interested in sound it's pretty amazing, the sound is really good. And here all the way down can you can buy it again, for 1900 refurbished.

So that's the kind of thing we are able to do because we have the Marketing Cloud, not only in terms of dollars and acquisition but also in terms of skills. With that, I'll go back to the main presentation. So why are we market leaders against certainly the market where we are already mature? We already work with quite a few partners. And you can hear a few brands that we're working with, as I was talking about Apple, Dyson is another one that's going to come up soon. And so we're looking for more sellers, as I said the demand is booming. We need products. We need you, there's a huge opportunity.

Few numbers about the US. I'm sure most of you are interested in those metrics. US started six months ago, back in the spring and we're doing fantastically. We are 10 times as big as our markets in Europe were at the same stage of development. I've shown you the global numbers are looking like three years after launch, already 12,000 orders generated, 400,000 sessions a month that was in September and booming now, 200% growth. Some targets for the rest of the year - 3.2 million sessions 12 million in sales, and that's just for Q4.

So now is a great time to join. We got covered you see a couple of articles here even before that iPhone success relaunch. We got a lot of attention from Forbes and other great newspapers and a lot of marketing activities that are in the pipes that are gonna help promote the refurbished segment and promote you when you join Back Market. So join now it's the right time.

Russell's doing up to 100 sales a day already. We have more than 200 categories open. There's very low risk because as I said, it's very clear what customers are buying. So lowest return rates that you can think about. I didn't talk that much about categories. I showed you a couple of things about phones and speakers. But what are the top ones that are doing really well, were smartphones, laptops, tablets, certainly are our top selling categories today.

But our plan is really to be an Amazon for refurbished products - TVs, consoles, kitchen appliances, cameras, I mean, any kind of electronic products, or home appliances, products that you can think about are great for Back Market, we have that expertise. In our more mature markets, we resale high quantities of these.

I'll end with a special Sellercloud offer. If you come from our very good friend and partners at Sellercloud will waive the registration fees and subscription fees, you only pay 10%. So it's all variable. If you don't sell anything, you won't pay anything. So hence the very low risk. And you know, that covers payment costs, and that covers fraud. So it's really at the end of the day very painless for you and again, purely, purely variable.

If you join Back Market, you can also benefit from all the network of partners that we’ve built, whether it's of course, Sellercloud, some logistics and customer service partners that we've built. So for instance, if you were to only do B2B today, and you're interested in dipping your toes in B2C, but don't have a way to do dropshipping quite yet or don't have a team to handle customer service yet, we have partnerships, we sometimes fulfill some of these ourselves in some of the markets, I'm thinking about customer service in Europe. So don't hesitate to reach out ask us and we can help you do that without you having to reinvest in new processes and new teams.

And the last thing I'll say before opening up to Q&A is that we're definitely interested in is a short-term opportunity in the US. But just so we know, we already have about 40 sellers live in the US. And a few of them have already crossed the Atlantic and are selling in Back Market Europe, because they love the model and they want to take advantage of our huge base of established customers over there. And that's something you can do as well. If you start with us, we can also help you reach all of our customer base in all digital markets

Should be open for the Q&A? As we start reading the questions, you can see where to contact Arthur and I by email or phone, and we can hook you up on Back Market.

Marianne Skolnik: So is this just for the US or is it in Canada as well?

Serge Verdoux: So today, we only sell in the US but Canada and other markets - Latin America for that matter are in our plans for next year. Today we only sell in the US. But that doesn't mean that if you are based in Canada and are able to accommodate US customers, you should definitely join us.

Marianne Skolnik: Can people sell non-branded items?

Serge Verdoux: Main brands are top sellers, I mean, one thing we do is that we convert people from buying new to buying refurbished. To be fair, what sells better in New which is top brands tends to sell even better in Refurbished because people are after a good deal. That being said you can definitely sell non-top brand products, we don't have a rule against it.

Is it specifically for Refurbished or for Used products?

We specialize in professionally refurbished products. What we mean by that is products have to be at the very least thoroughly tested, they have to be 100% functional, can't be damaged. As the seller, you have to offer a minimum of six months warranty for anything that's being sold on Back Market. Those are the big restrictions. The reason we do that is to create reassurance. And there's also a 30 day return period no questions asked. We want consumers to not worry about buying on Back Market and know that if something goes wrong, they can return the product. Just to be clear for the 30 days is no question asked, after 30 days and before the end of the warranty period, which is six months minimum, it's really for defective. So the product has to be defective for the seller to have to change it or repair it.

There's a question on APIs?

Yes, we have. You can connect through Sellercloud of course, that's why we are having this presentation today. But if you're interested in having deeper integration we offer API integration. We have the documentation that we can share with you. And with developers, you can have it integrated in less than a week.

Marianne Skolnik: What shipping options do you support for buyers?

Serge Verdoux: It's really up to the seller. The drop shipping, the fulfillment of the order is really handled by the seller directly. What we send is confirmed and paid order with an address the details that are needed to fulfill the order, you as a seller will fulfill the order. In Back Market, you have the possibility to really customize and create as many shipping options as possible. Our sellers tend to have three, but again, it's not a rule, they tend to have for free option, which tends to be standard shipping, and then they tend to offer either, you know, two-day option or an overnight option. And you can set up a price differently for each of these options, as well as by product category based on the weight.

Marianne Skolnik: Who handles the returns?

Serge Verdoux: The customer contacts Back Market. So they contact the sellers through Back Market, but you would be as a seller managing the returns. And really, if there needs to be an exchange or if there's a repair to be made or an exchange or refund during the warranty period. You handle that. But you handle all that through Back Markets through very easy integration. We are actually now able to do it through Sellercloud as well. So it's very painless for you if you already have Sellercloud on other marketplaces.

Marianne Skolnik: Are there any restrictions? Or is there an application process for certain brands? Or a restriction against certain brands to be sold?

Serge Verdoux: No. I mean, of course, the product has to be legitimate. And they have to be in working condition, but we don't have any special brand or restrictions.

Marianne Skolnik: How many products are listed on Back Market?

Serge Verdoux: We have about 300 product categories. So product families, we have tens of thousands of different SKUs.

Okay, and what content do sellers need to provide?

For those of you who list through Sellercloud on other marketplaces, you want to provide anything else. We are in the process of building custom plugins so that you can provide the feeds directly from Sellercloud to us. For those of you who are not yet, it's really very basic, I mean, for smartphones, in particular, a lot of our sellers literally only send us the SKU and the name of the product. So as long as we are able to make out what the product is typically, you know, of course, the brand. For iPhone, 6s, the storage, the color, the aesthetic conditions. And then our algorithms are able to determine and match them to the right product ID. Think about it as minimal information for us to make sure we list the right product on Back Market.

Marianne Skolnik: What are the regular subscription and registration costs?

Serge Verdoux: So, again, for people coming referred by Sellercloud, there is no subscription fee. No registration fee. It's really only a 10% variable commission, that includes payment fees, and that includes fraud management, which we take care of. So you don't have to worry about any chargebacks.

Marianne Skolnik: Does Back Market has its own customer service?

Serge Verdoux: We do. We want to make sure that we create a great user experience. So the first touchpoint that customers have through the platform are the sellers, but we stay in touch at all levels. And we are here to assist the customers if they need us and they can reach us by phone by email, or by messaging through the console.

Marianne Skolnik: So just to confirm if they want to list an item, it has to be in good working condition, but doesn't have to officially be refurbished?

Serge Verdoux: Exactly. So it has to be 100% functional. So you know, everything has to work the microphone, the camera, the battery has to be at least 80% of its original capacity. To be fully functional, the aesthetic state can be somewhat damaged. As a guideline, we don't take all the aesthetic issues. When we say refurbished, it's most thoroughly tested. The seller really has to back up with a six-month warranty, which is the biggest, for us the biggest sign of quality that that we see.

As you join Back Market, we have a what we call a quality charter that you adhere to where we can provide more details on what exact test we need to be made. I mean, we are asking you which tests you're making. But it's really about being 100% functional at the end of the day. Think about it as a consumer buys it and they have to expect the same experience as a new product except for the aesthetic.

Marianne Skolnik: Does each seller has their own listing or do you have one shared listing?

Serge Verdoux: So that's the Buy box mechanism that I was talking about. So if multiple sellers sell the same product, we only are showing one listing to the end customer. And we believe that actually one of the key to our success is that we make it very easy for customers. We choose on behalf of the customers so that customers don't have to think. But it's also a benefit for the sellers because once you get that exposure, once you get that Buy box, then all of the volume that you can sell is much higher.

Does Back Market settle all the funds with the buyers?

So two ways. If you are using PayPal, you get paid directly by PayPal, the next day or two after the transaction. If you're using a credit card we use the payment provider called Agent to settle and it's done every 10 days on the 6th, the 16th and the 26th of each month.

Marianne Skolnik: And you're an approved Apple seller, correct?

Serge Verdoux: Yes, we are.

Marianne Skolnik: We want to know who gets the buy box price?

Serge Verdoux: We use price, of course, but there are about 15 quality indicators. Some of them are around the product details. So what's the effective rate of the products sold by that seller? What's the grading? And then there's also a few of them around about 10 that are run the customer service Do they respond to customer requests on time? Do they resolve the customer requests in a positive manner etc, etc. And so the buy box algorithm uses those 15 indicators - price versus about 14 quality to determine who is the best seller on a particular product.

Serge Verdoux: The question is whether we ship worldwide.

So again, the sellers are doing the shipping. Our customers today are in the US and in five European markets - France, Germany, Spain, Italy and Belgium. So to the extent that you are able to ship in these markets, we can help you reach all of our audience in all these markets. And looks like there may have been our last question. So thank you again, Sellercloud. Thanks, Marianne.

Marianne Skolnik: Thank you guys for coming in today. And thank you guys for joining us on the webinar.

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