What do you get when you cross an accountant with a classified ads salesman? A business that has turned modern shopping on its head.
In 2007, Jason Wyatt was a chartered accountant working in London and his best friend Sam Salter, a childhood mate, was selling classified ads for some of Australia’s biggest magazines. Salter was from a cycling family, so when the two caught up in Melbourne, their conversation turned into an idea to create a marketplace for bikes. While the vehicle market had websites like carsales.com.au, the bike sector didn’t have an equivalent. “More bikes than cars are sold every day and it’s a highly fragmented industry,” says Wyatt.
With help from Wyatt’s girlfriend at the time, a senior user experience designer, the two developed BikeExchange, which was designed to be the go-to online classifieds for bike buyers all over Australia. Wyatt quit his job and returned to Australia, convinced he had to dedicate himself to it full-time to make it work.
At the time, web development for this type of ecommerce platform was in its infancy, so the pair had to find someone to build it. Wyatt and Salter interviewed every web developer on the first few pages of Google—40 in all—figuring if a developer could rank on Google, they knew what they were doing.
“The quotes ranged from $5,000 to $250,000 and in the end the decision was easy because we’d started with $28,000 and we’d spent our first $10,000 on a logo, which meant about $20,000 for sales, marketing and building the website,” says Wyatt.
By the time the web development phase was over, however, they had a website that barely resembled their brief and no money in their account. Their developer pick was a bust. Then a third partner offered to develop the website for a share in the business. With nothing left to lose, Wyatt and Salter brought him on board and he built the site as they intended. Eventually they bought him out.
So the duo had a website and a logo—but no customers. “We, mostly Sam, jumped in the car and knocked on the door of every single bike store in the country, signing them up one by one.” The rest is history.
THE TURNING POINT
In 2012, BikeExchange became the Telstra Australian Business of the Year, the award recognising it not only as bike buyers’ favourite destination to find, buy and sell all things bike-related, but also as a well-run business. The duo were not the type to rest on their laurels, however, as they quickly realised that the model could also be applied to other verticals. “We needed to de-bike the platform, so we created The Exchange Group,” says Wyatt.
The pair had a number of offers from different market segments and ended up with joint venture partnerships with a team of highly experienced business people. BikeExchange is an international business, expanding into New Zealand, Germany, the UK and the USA, and they’ve used the model to provide buying platforms for baby items (TiniTrader.com.au), homewares (HouseofHome.com.au) and outdoor goods (Outdoria.com.au).
Turning The Exchange Group into Marketplacer—where the core business is to license the platform rather than look after specific verticals—was the next logical step. “We’ve done all the hard work. We rewrote the platform to work across different tribes; cyclists are a different tribe to mums and how you search for a bike is not how you search for a pram. Now it’s ready for new marketplaces.”
The key strength of the Marketplacer model is that it has buy-in from both online and offline retailers because stores and sites only pay for the leads delivered. It is not just changing ecommerce, says Wyatt, it’s changing shopping. “Once you understand the tribe, you understand it’s not just comparison shopping, it’s about tailoring how they look for items to deliver the right experience so they make the right buying decision. That’s valuable.”
Thinking about implementing a marketplace strategy?