Bonanza founder and CEO Bill Harding shared his plans for the marketplace for the coming year, including budgeting $1 million in advertising for 2014. “We want to expose our sellers’ items in every nook and cranny of the web where buyers may roam,” he told members in a blog post last week.
Harding called 2013 a stellar year for sellers, and said Bonanza was part of the 75% year-over-year jump in sales on Cyber Monday. “Quality merchandise combined with a positive customer experience seems to be a winning recipe for our selling community’s continued growth,” he wrote.
“Looking at our sustained growth over 2012 and 2013, all signs point at 2014 as a break-out year for Bonanza. We see more and more buyers discovering the unique value our sellers provide, as evidenced by the 51% jump in conversion rate we saw in 2013. As more and more customers visit directly, the fees paid by our sellers continue to decrease, and a virtuous cycle takes hold.”
Harding shared more information about his plans for 2014 with EcommerceBytes. Bonanza will spend in 2014 ten times what it had spent in 2012, with a continued focus on Google Product Listing Ads, which will likely account for at least half of the marketplace’s total ad spend. “Our sellers are getting more bang-for-buck from Google than any of the other shopping engines we’ve compared at this point,” he said.
But in the New Year, it will also begin advertising the Bonanza brand in addition to advertising specific items for sale on the site. “We think that we now have enough inventory and differentiation to serve as a destination marketplace, and that’s an exciting leap for us to make,” Harding said. “It also benefits the sellers since they only pay 3.5% for direct traffic.”
Bonanza will also build upon its existing capabilities, including Kaleidoguide, (“Bonanza is the only marketplace that lets you generate reviews for your personal-branded products. That reputation will build a positive feedback loop of sales and reviews,”) and Background Burner (“With pictures playing such a huge role in conversion rate, creating maximum-impact photos for your merchandise means more easy sales for everyone”).
Harding also answered questions about conversion rates and what sellers must do to be successful on Bonanza, and what he was doing to attract smaller sellers who might be unhappy with the eBay marketplace.
EcommerceBytes: Bonanza’s conversion rate jumped 51% in 2013 – to what? Was that across the board, or did some types of sellers benefit more than others? And what conversion rate do you hope to attain in 2014?
Bill Harding: We don’t like to talk exact numbers since it gives competitors a yardstick that they can use to evaluate (or exaggerate) their own performance. However, broadly speaking, our conversion from search in Q4 2014 was above 2%, which was significantly higher than the same period last year.
EcommerceBytes: What do sellers have to do in order to be successful on Bonanza?
Bill Harding: The most successful sellers on Bonanza aren’t all that different from the most successful sellers on other platforms. They have great merchandise at better prices than the competition. If a seller doesn’t have desirable merchandise, it’s going to be tough sledding no matter where they choose to sell.
But as far as Bonanza specifically, the three biggest keys to performance are:
1) Leverage our advertising platform. This page describes Bonanza Advertising pretty well. The more advertising a seller participates in, the more places we can feature their items. And since they’re only charged when their items sell via advertising, it’s a win-win for them.
2) Fill out item details. Without knowing brand, color, product line, or condition, it’s far less likely that a sellers’ items will show up in Bonanza search or Google PLA. A little bit of effort goes a long way in filling out item details.
3) Great pictures. Always great pictures. It’s how many shoppers make their decision, especially on jewelry and aesthetic purchases.
EcommerceBytes: There’s a feeling that small sellers on eBay are not faring well – is Bonanza doing anything to attract them to its marketplace, or any thoughts on what you’re seeing in that regard?
Bill Harding: I hope so! There’s little doubt that eBay’s “Top-rated Seller” program makes it harder for small sellers to get exposure in eBay search. Because sales volume is not a factor in our search ranking algorithm, small sellers theoretically have a better chance to get noticed on Bonanza.
But as mentioned above, success really comes down to having desirable merchandise. If a small seller doesn’t put in the time to make their pictures look great, describe their items fully, and price them reasonably, they’ll have trouble making sales anywhere.
Conversely, if they pay attention to price and pictures, they can succeed in spite of size. As an occasional seller myself, I recently sold my iPhone on Bonanza within a couple days. Bonanza isn’t at all optimized for electronics, but since I priced it reasonably and had good pictures, buyers still found and purchased it quickly.
EcommerceBytes: Should we be on the lookout for any funding news, new hires, or new features coming (aside from picture-related mentioned in your recent blog post)?
Bill Harding: In the last 5 years, I’ve seen a lot of marketplaces come, get funded for $5m or $10m, then die (most recently Yardsellr). Watching the pattern repeat itself so often, I’ve come to the belief that sustainable growth as a marketplace boils down to listening to sellers, seizing opportunities as they come, and being patient.
Raising funding doesn’t seem to help much, and it can be a detriment if it forces the company to make bad decisions in the interests of the shorter-term returns that most investors want.
Great marketplaces take a very long time to build. And I think they’re more hard work than many entrepreneurs care to take on.
The luxury of our situation is that we’ve gotten a lot of the basic stuff out of the way already. Our feature set already stacks up very well to any competitor. But we are a team of hard workers, so we relentlessly seek to improve what we have. We can always be better.
Lately we’ve been able to focus more on Bonanza-firsts (Background Burner, Kaleidoguide) as well as continue to improve upon essentials like batch editing and inventory management – places we’re already strong but we’re always listening to ideas on how to improve.
After we get back the results from our seller poll, I’ll be able to update you with more of the specific features on our radar for the coming year.