Business

Need to sell your smartphone, or buy a ‘newish’ one? Expanding KC business can help

Bloomberg

Back in 2010, Swappa founder and CEO Ben Edwards was into app development. To test software, he would regularly buy used phones from websites like eBay and Craigslist.

“Dealing with these services felt like the wild west,” he said.

One time, he met a Craigslist seller in a parking lot to buy a phone. Everything seemed normal, he said, until after the transaction was completed and Edwards was at a stop light next to the man he just bought the phone from. The man seemed nervous and ended up hitting the gas and running a red light.

Later, Edwards found the phone was blacklisted.

“I basically just spent a couple hundred bucks on a paper weight,” he said.

Edwards thought there had to be a better way for buying used phones. So he founded Swappa, an online forum for buying and selling “newish” technology — everything from iPhones and laptops to video game consoles.

Swappa says it is guaranteed safe for buying devices. The website requires sellers to send the serial number of the device to Swappa staff so they can ensure the device isn’t blacklisted — lost or stolen — and the device is the same make and model the seller says it is. Swappa also requires users to post a photo of their devices next to a unique number provided by Swappa.

Until last month, Swappa had been an online-only service. The online service works much like eBay or other seller-to-buyer transaction websites where a buyer anywhere in the country can purchase an item and the seller ships it.

Swappa launched its local service, Swappa Local, in Kansas City last month. The service allows buyers to meet up with sellers in predetermined locations to check out the electronics before paying.

Kansas City was one of five cities where this service was launched.

The predetermined transaction locations, Edwards said, are public, local and safe. These include the designated areas outside police stations that have surveillance, Starbucks and several technology repair shops around the city.

Edwards said the local service allows customers to get their phones, laptops and tablets the same day instead of waiting for shipping. It also lets the company compete more with Craigslist.

According to the Swappa website, there were 92 items for sale for the Kansas City area as of July 17.

Swappa is on track to do $100 million in business, Edwards said — a majority of that amount going into the pockets of sellers.

The company makes money through small buyer fees — usually 3 to 4 percent of the total cost of the item being purchased. That is different from other online marketplaces, which often charge the seller the sales fee.

Reviews for the website are mostly positive.

“If you sell on the site, you will do more work, but likely get more money,” one review says. “We think that’s a good trade.”

The company is launching four more locations for the local service, including St. Louis, on Tuesday, Edwards said.

He said Swappa expects to launch more Swappa Local locations over the next few weeks and through the rest of the year.

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