Question

Topic: E-Marketing

How To Profit From A Used Furniture Marketplace?

Posted by Anonymous on 1/8/2010 at 5:54 PM ET 250 Points
I'm doing a feasibility study of an online marketplace for universities/colleges where upper-year students can sell their used furniture and appliances to incoming students who are moving into student housing. Promotion will be predominantly done through on-campus media outlets such as university newspapers, flyers, posters etc.

There is definitely a demand for such a service at colleges in my city, but my big problem is with the profitability of the idea; and more importantly, what's the best way to charge users for using the site and add value?

Here are some other concerns I have:
1) Used furniture usually don't have too great resell values (in the low 100's at most); where is the money in that?
2) Shipping is tedious for furniture/appliances and a big headache for buyers; should I offer a shipping service perhaps?
3) Finally, what are ways to differentiate my service from the likes of Craigslist or eBay?

Thanks for your help!
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RESPONSES

  • Posted on 1/8/2010 at 9:17 PM Author
    Sorry you must be mistaken, I live in a University town, and a lot of businesses here serve the surrounding schools, and I was just looking for some feed back on my ideas.

    Thanks
  • Posted by Jay Hamilton-Roth on 1/10/2010 at 8:22 AM Accepted
    It's an interesting idea. Your market is larger than you think - not just students, think first time renters as well. The problem you'll face is the reluctance of buying something used sight unseen. What if it's not quite the color, shape, dimensions, texture, or damage-free condition that it appears. Can it be returned and/or price-adjusted?

    Craigslist is one of your potential competitors, but so's local consignment stores, rummage stores, Salvation Army, etc. The key advantage you'd offer is one-stop shopping online.
  • Posted on 1/10/2010 at 11:44 AM Accepted
    Regarding your #2 and #3 concerns - I think it would be hopeful to talk to some of the prospective buyers in your target audience and ask them:

    What shipping/delivery methods would they prefer?
    Would they be willing to pay for something that eliminates the inconvenience, and at what price point?
    What are the advantages of competitive sources (e.g., ebay and Cragislist)? What are some gaps that you could leverage in your service?

    By talking to both buyers and sellers, you'll not only be able to speak their language in any marketing campaigns, but you'll be aware of the end-benefits their seeking and you'll be better able to position your service to maximize usage.

    Good luck!
  • Posted by Clive Fernandes on 1/15/2010 at 3:34 AM Accepted
    Dear Robert,

    Have tried to answer your specific questions below.

    1) Used furniture usually don't have too great resell values (in the low 100's at most); where is the money in that?

    Your primary business model here would be taking a percentage on the sale price. I agree with you that volumes and prices of used furniture would not make it a particularly lucrative business on its own.

    Having said that, its a really good idea; however you need to add on some ancillary services which will bump up your bottom line.


    2) Shipping is tedious for furniture/appliances and a big headache for buyers; should I offer a shipping service perhaps?

    Most definitely yes.

    3) Finally, what are ways to differentiate my service from the likes of Craigslist or eBay?

    The furniture shipping service would be one. Also the ancillary services mentioned in answer one would be some of your differentiation factors.

    Hope this helps.

    Clive Fernandes
    Clive Fernandes Consulting
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