The Crunch: Swappa is a thriving marketplace for buying used smartphones, tablets, and laptops — and that’s thanks to Founder and CEO Ben Edwards. The business the computer science graduate started has distinguished itself from other online marketplaces by vetting devices so users can buy with confidence. That’s just one example of how Ben has ensured an enjoyable buyer-seller experience, something he struggled to find before starting Swappa seven years ago. The company has even expanded to offer video games and consoles as well as a growing repair network to make damaged devices as good as new.
It didn’t take long for Ben Edwards to realize he had been ripped off after purchasing a used Motorola Droid from someone he met through an online marketplace.
“I was buying a used Droid and was able to inspect the device. It turned on, so I thought it was good. The seller and I left at the same time and ended up at the same stoplight together. He looked over at me nervously and then peeled out through two red lights to hop on the highway,” Ben said.
When Ben got home, he found out that his phone had been blacklisted — meaning it was barred from activation. His fear of being swindled by a stranger had become a reality.
That experience was one of many that led Ben to launch Swappa, a marketplace for buying and selling used smartphones, tablets, laptops, and other tech in December 2010. His goal: Apply modern measures to cut through the natural apprehension that exists between buyers and sellers in cyberspace. Above all, buyers get assurance about where their money is going.
For Ben, the feeling of being on the wrong end of a scam left an especially bitter taste in his mouth. But he had experienced that taste before. Having earned his bachelor’s degree in computer science from Georgia Tech, Ben did product and software development as a side project to find test devices for dev projects before creating Swappa.
“What I found trying to buy used phones, specifically, was that there were big problems with those marketplaces,” Ben said. “Everything from inefficient communication to inefficient shopping to wasted time to outright fraud. I encountered it all just trying to get a small handful of devices.”
If Swappa was born from Ben’s pain, it’s boomed from his dedication. In the company’s first full operational year in 2011, it sold about $500K in devices before doubling that in 2012.
Ben secured a marketing deal and partnership with another site in 2013 that helped Swappa gain traffic and attention for smartphone users. Just before that landmark moment, the company only comprised three part-time employees before that pivotal moment led to major growth.
Swappa has seen an exponential tick in sales numbers each year since, including huge strides in 2014 ($23 million) and 2015 ($43 million). Now, Ben’s company sees $7 million each month going back to its sellers, and Swappa is expanding into new markets — including video games and technology repair — to offer sellers even more marketplace options.
Swappa Differentiates Itself with a Better Buyer-Seller Experience
Ben has made sure Swappa is unlike many of its competitors. The site can only allow new product lines or devices when tools are in place to vet them. Leaving the gate open for anything and everything to be sold through Swappa would give too much-unchecked power to the seller and increase the risk of a bad buyer experience. That simply isn’t worth it to Ben.
“If you’re listing an iPhone, for instance, we require the seller to provide the ESN or serial number so we can run checks on that and ensure the device hasn’t been lost or stolen. We ensure it matches the type of device that they say they’re selling and we also require the sellers to upload pictures of the actual item being sold, not stock photos.”
Ben believes these requirements turn away a lot of lazy or unscrupulous sellers, resulting in a better chance of a successful sale. He has invested in the tools to make that process easier, although it requires Swappa to do a lot of work. Ben has also brought aboard good moderators, who are often Swappa users themselves. The company has enjoyed the best of both worlds With this philosophy: safe buyer-seller exchanges and steady growth.
Swappa distinguishes itself in other ways, as well, namely from a pair of online marketplaces against which it benchmarks its performance: eBay and Glyde. Swappa’s fee is built into the price of the listing, which is approved by the site, and paid by the buyer at the time of purchase. Other sites have fees that are paid by the seller and subtracted from the final price.
Another method in which Swappa looks out for the seller is that no purchase is finalized until that person is paid. If you’re a first-time seller, you’ll be paid quickly before you ship the item.
Swappa is also PayPal protected, offering confident exchanges for buyers and sellers.
iPhones: The Main Course on Swappa’s Growing Menu
While Ben has positioned his company to sell a diverse selection of devices, Swappa’s most popular products have kept steady since 2013: iPhones.
“Our bread and butter is smartphones, and iPhones make up a significant portion of that,” he said.
Of the 10 most popular phones on Swappa, nine are iPhone models. The sole non-Apple phone on the list is the Samsung Galaxy S7.
“Even the iPhone 5S is a top-10 selling device for us, which is pretty neat in that you’ve got this tech that’s several years old, but people are still getting value and use out of,” Ben said. “They’re not ending up in a drawer. They’re not ending up in a landfill. They’re going to a second — or maybe even third — user and I think that’s a great thing.”
Samsung brands still hold firm in sales as seven of the next eight positions after iPhones are all Samsung products. What phone does Ben have? He uses the Google Pixel, which he bought right as the Google Pixel 2 was coming out. Staying one generation behind is usually the way Ben operates.
In fact, many consumers like him stay a generation back — or more. Some shoppers even need a second phone for work. That’s another trend that works to Swappa’s benefit.
“Not everybody needs a $1,000 piece of technology in their pocket if they just use it as a music player or a GPS system or even just as a phone,” Ben said.
Expanding From Mobile Devices to Video Games & Other Tech
Beyond smartphones and tablets, Swappa is venturing into selling used video games and consoles. Initially, Swappa sold games, consoles, and controllers for PlayStation 4, Xbox One, Nintendo Switch, and Nintendo 3DS. Now, other platforms can be found on the site, including Nintendo Wii U, PlayStation Vita and even retro systems such as a classic Nintendo or Super Nintendo.
Plenty of gamers have put up with lowball prices for games they’re looking to trade in. But Ben wants to put things on a level playing field.
“One of the biggest problems we see with other sites is that they won’t pay a seller what the item is actually worth. Instead, they pay a fraction of that price and then mark it up to near retail to sell it,” Ben said. “It creates a very inefficient market. That retailer ends up pocketing the majority of the proceeds of the sale. At Swappa, connecting buyers and sellers directly results in the fairest price, and it gets the money in the proper hands — the seller’s.”
Branching out in this direction gives Swappa the potential to build on its current status as a community as opposed to just a marketplace.
Swappa to Instill Trust in After Market Through New Repair Network
Ben’s business model has appealed to shoppers with stories equally as frustrating as his own experience several years ago — or worse.
“We’ve heard all the stories,” he said.
However, Ben doesn’t want Swappa to become a marketplace where users come and go. He intends for it to be a community, and another way to keep consumers around is to offer help with the products they own, no matter where they’re purchased. According to Swappa’s website, 30% of its customers have a broken device. Ben has been turning his attention to that group of people with the Repair Network that started in February.
Ben and his team are still in the process of building more bridges between Swappa and repair shops to connect them to customers saddled with devices that aren’t 100% functional.
“A lot of users have to deal with broken phones, so building the Repair Network is a good step to providing solutions for those people,” Ben said.
Users can search by city, county, or address on a Google map to locate a nearby repair shop. Expanding that function will be a focus for the site in the coming year. It is all part of Swappa’s commitment to providing users with positive experiences and peace of mind.