Another alternative to eBay is closing. Addoway is an online marketplace launched by two college students in 2010 and is shutting down in May.
Fredrick Nijm and Anthony Saia launched Addoway while attending Arizona State University with the idea that social networking activity could provide buyers with an indicator of trustworthiness
In a letter to users
on Facebook, Nijm wrote, "We hate to have to do this, but after Anthony and I have spent all of our time and resources building Addoway over the last 13 years, we have unfortunately come to a point where Addoway is no longer self-sustainable."
While sellers are hungry for alternatives, for buyers, not so much. It's harder to woo shoppers to small marketplaces. And while Google once helped provide exposure to micro sellers on smaller platforms, it changed to a pay-to-play model that helps larger sites like eBay, Amazon, and even Etsy dominate results on its popular search engine.
We asked Fredrick Nijm for his thoughts as he and his cofounder prepared to shut down Addoway.
In 2011, a year after launching, you had 1 million listings and 10,000 members - with 5% of those paying for Pro membership. What are those metrics today as you prepare to close the site?
Fredrick Nijm: We have over 55,000 members and helped facilitate over 30,000 orders on our platform. The total revenue of all ads on our platform now is over $3B.
What led to the decision to close the site?
Fredrick Nijm: It just wasn't feasible to focus full time on the site and also just outsource it to another company to handle for us. Can't just ignore something you built and think sellers are going to run a business but you're not going to put in the time to evolve and keep the site functional. It wasn't fair to our users. Sometimes you have to walk away from one dream to get to another.
What were the factors that made it most difficult for Addoway?
Fredrick Nijm: Low profit margins because we wanted to make it affordable to sell and Advertising on Google shopping. If we aren't bringing enough in to cover we can't send the listings to Google and they won't get the hits they need to drive sales. It's one of the most difficult tasks to do to start a company but rely on another for your success. You need great sellers, but they won't come unless there are buyers and they won't come unless there is great product from great sellers lol.
Which companies had expressed an interest in acquiring Addoway?
Fredrick Nijm: There were a few we had partnerships with and one discussion led to the next but we aren't going to disclose that for the sake of privacy for the other parties involved.
If you were a typical Addoway seller, where would you turn now to sell?
Fredrick Nijm: I would go to Bonanza. Bill and Mark are stand up guys and they have a solid team behind the scenes. Some of the best engineers always building something great for their users. Etsy is also another great site. My wife shops on both actually :)
As you look out at the ecommerce landscape, what are your thoughts?
Fredrick Nijm: It's only going to get more and more competitive to a point where the individual seller is going to find it so difficult to compete with the larger merchant. Amazon is taking over the world. It's not going to be eBay that pushes anyone out, but rather Amazon. It's very scary to be honest.
Who's doing a good job for buyers and sellers, and what do marketplaces need to do better?
Fredrick Nijm: Unfortunately if I had the answer to this one Addoway would probably have grown faster. Marketplaces need to invest in marketing. Chicken and the egg is always going to be the problem. Doesn't matter if you have the best features and the best support. If no one knows you exist, does it really matter?