How Bonanza Grew to be a Leading Online Marketplace by Empowering Sellers and Cultivating Loyal Buyers
5.16.18 Online Marketplace

How Bonanza Grew to be a Leading Online Marketplace by Empowering Sellers and Cultivating Loyal Buyers

By: Chris Curry

The Crunch: In an e-commerce market dominated by Amazon and eBay, Bonanza has carved out a place for itself by empowering small and medium-sized sellers. The Seattle-based online marketplace charges no upfront fees to market items through its site and handles most of the technical duties, including helping sellers set up online web stores. Because almost anyone can set up shop quickly and easily, buyers frequent the site for its unique variety of goods, including hard-to-find collectibles and antiques. Built on a decade of success, Bonanza’s new partnership with a leading inventory management company fits well within its ongoing efforts to expand its reach.

The online marketplace Bonanza describes its inventory as “everything but the ordinary,” with an eclectic variety of items for sale that includes art, vintage jewelry, and antiques. But Bonanza has also positioned itself as a partner for sellers by developing free tools to empower those who use the site to grow their own business.

After a frustrating experience in 2008 at a rain-soaked garage sale in Seattle, Co-founder and CEO Bill Harding decided to form an online marketplace for unique items, independent sellers, and SMBs. To get Bonanza off the ground, he quit his day job to learn web development, and, later that same year, Bill brought on Co-founder and VP of Business Development Mark Dorsey to help Bonanza reach a broader audience.

Mark said they initially encountered the Catch-22 scenario that many e-commerce sites face in the beginning — how to attract sellers without enough buyers and how to reach more buyers with too little inventory. Bonanza resolved that dilemma by designing the site to minimize the financial risk and technical responsibilities for sellers.

To start, Bonanza solicited feedback from individuals and businesses who had previously set up on eBay to see what tools they wanted in the new platform, and, after building out an early version, asked sellers to visit the site and provide input for a few months so Bill and Mark could implement the recommended enhancements.

Bonanza co-founder Mark Dorsey said the primary goal of the platform is to empower entrepreneurs.

“We are a company of entrepreneurs,” Mark said. “Everyone at our company is an entrepreneur, and our primary goal is to empower entrepreneurs. So we want to create tools to empower our users and let them focus on the items they sell, customer service, their business, and the things they do well.”

The seller-centric approach has worked. Review site EcommerceGuide.com and a Jupiter Media Reader’s Survey both named Bonanza “best eBay alternative,” and Bonanza also won the ECommerceBytes.com Sellers Choice Award for “Most Recommended Marketplace” five years in a row.

“Bonanza was first named a top eBay alternative at a time when there were about 50 or 60 in the market,” Mark said. “To get that designation was a pretty big deal, and, from that point forward, the business just kept scaling upward. It was then that we truly realized that there was a huge need for a marketplace that listened to sellers and a platform that empowered sellers. That’s what we’ve been doing since day one. “

A Marketplace Platform Designed to Help Sellers Thrive

Bonanza was designed to give sellers easy access to an online marketplace and equip them with the tools to succeed. “When a seller succeeds, we succeed,” Mark said. “If a seller doesn’t have a good experience on our site and does not see a good return on their investment, they’re not going to come back.”

Mark explained that Bonanza doesn’t charge fees to simply list items on the site. Instead, the company takes a cut when an item sells, collecting one of the lowest final value fees in the industry at just 3.5%. While most selling fees are typically between 10 and 20%, the lower fees on Bonanza helps keep prices down for buyers and means sellers get to keep a larger chunk of their own revenue.

“By partnering with sellers and being really invested in their success — providing tools and an empowering platform for them — we prove to them we are in it for the good of their business, too,” Mark said. “It’s a win-win situation that incentivizes us to do everything we can to help them succeed.”

To better position sellers for success, Bonanza provides them with data on where their buyers came from and their shopping habits, which allows sellers to retarget their marketing toward those buyers with discount offers and coupons. Bonanza has also created a webstore platform so sellers can quickly and easily set up an online shop with their own domain name.

“You could literally have an online presence — your own storefront — within two minutes,” Mark said.

The Bonanza marketplace and the webstore can be synced so if an item sells through the webstore it gets removed from the inventory in the marketplace and vice versa. The marketplace inventory can be similarly synced to Amazon, Shopify, and eBay so items that have sold are no longer shown to prospective buyers. Bonanza further differentiates itself from other peer-to-peer marketplaces by providing assistance with marketing.

Bonanza partnered with Google early on to integrate AdWords with its web stores, which allows sellers to establish pay-per-click advertising campaigns to drive web traffic to their shop. Taking AdWords a step further, Bonanza offers a Webstore Broadcaster tool that enables sellers to showcase their items on Google Shopping. Mark said this arrangement was Google’s first e-commerce marketplace integration.

 

“Too often, the burden of getting traffic to a webstore falls on the seller,” Mark said. “But that doesn’t work for a lot of people because they’re not necessarily tech-savvy enough.”

Buyers Shop Bonanza Because of Its Variety of Unique Products

As appealing as Bonanza is for sellers, the site is equally appealing to buyers because of its growing inventory. From art and pottery to antiques and collectibles, buyers can browse more than 30 million items across categories such as clothing, accessories, electronics, and home and garden products.

That massive selection almost guarantees there’s something for everyone on the site, even unique, obscure, or hard-to-find goods.

Different categories are promoted on the homepage and in the navigation of the site based on what’s most popular or trending at the time. So, for example, if there’s an abundance of women’s clothing or collectible coins — as well as buyers seeking out those items — those categories will be more prominent to facilitate more transactions.

A common issue that makes specialty merchandise even harder to find online is missing item codes or GTIN numbers, which is what search engines use to catalog products. Bonanza solved that problem by building its own product catalog, called the kaleidoguide, to list and organize items lacking unique identifiers such as UPC, ISBN, or MPN codes. Users are then able to search by brand or a description of the item.

A screenshot of the Kaleidoguide search tool

The kaleidoguide helps shoppers discover specialty products from small brands that don’t normally receive exposure.

“The kaleidoguide creates a good experience for shoppers and gives sellers an outlet for those specialty items,” Mark said.

Bonanza also prioritizes transparency and provides shoppers with a wealth of relevant information before they make a purchase. For example, buyers can view reputation metrics on sellers, learn more background on stores before checking out, and even ask sellers questions to get details on specific products.

“If I’m a buyer into vintage belt buckles, and I find a vintage buckle on Bonanza, I’m going to see the story of the person who is sourcing that vintage belt buckle and I might make a new friend who is into the same things I am,” Mark said.

Continued Growth Through Key Integrations & Broader Reach

Bonanza launched its online marketplace to cater to small and medium-sized sellers who were getting lost in the shuffle on larger e-commerce sites. Over the last decade, the company has been repeatedly recognized as a leading alternative to eBay and continues to earn praise in national news outlets.

Today, Bonanza garners about 6.5 million page visits a month, with the vast majority of web traffic — more than 69% — from the US. Later this year, however, the company seeks to build on its years of sustained growth and strong reputation to reach an international audience.

“We haven’t been able to take advantage of the international audience because the site wasn’t optimized as great as it is now,” he said. “We are rolling out international integrations and are much more attractive to international buyers and sellers than we were in the past.”

Another recent partnership is expected to help Bonanza increase its reach. Mark told us that its impending integration with a major multichannel inventory management system will open the marketplace to a new legion of sellers who have their inventory managed by that company.

“This partnership is going to make our inventory much broader and bring a lot more sellers to our site,” Mark said.

Bonanza will be extending its tools and resources to help entrepreneurs here in the US and across the globe set up an online shop and sell more easily to an audience of buyers looking for their next great find.