Anything But Ordinary: Bonanzle Aims To Be the Social Site for Buying and Selling Niche Items
First off, please don’t call it an eBay competitor. Sure, it’s in the online marketplace space, but it’s going after a specialized segment with a different approach. The startup is called Bonanzle, it’s based in Kirkland, WA, and it has one of the most promising trajectories of any young company in the Northwest. Bottom line: Bonanzle is already profitable, and has been turning away investors eager to get a piece of the action.
Founder Bill Harding got the idea about two years ago to build a website for people to buy and sell collectibles and niche items—things like old magazines, comic books, posters, and jewelry. Previously, Harding had studied software and physics at the University of Washington Bothell, and spent five years at Kirkland-based gaming firm Amaze Entertainment, where he was a lead developer. The idea for Bonanzle came to him when he was moving out of his last apartment and trying to sell off a bunch of his stuff. “My main criteria was to sell it fast, and to sell to people where if they saw one item, they’d see other items and potentially buy them in groups,” Harding says. It didn’t work out that way. After looking around online and not finding a suitable site, he held a garage sale in the pouring rain. Afterwards, Harding says, “I went in wet with most of my stuff, and $25 in my pocket. That was my pain story.”
So, in January 2007, Harding set out to create a site where people could sell a lot of items quickly, and give buyers combined offers and better deals. He quickly found the space was “as crowded as you can get,” and he needed to differentiate his site. “My mantra was to make it as dirt simple as possible,” Harding says. “Take away every link, every visual element that wasn’t necessary. I thought it would compete with Craigslist, but as many an entrepreneur has figured out, it’s not about the technology. I started going after eBay people instead. That’s where it started to turn around for us.”
After a year and a half of development, Bonanzle (“Bonanza.com was taken”) rolled out a beta site in June 2008 and went fully public in September. That month, the site had between 10,000 and 20,000 unique visitors. When all of the numbers are in for March, Harding says he expects to have hit 750,000 uniques. This explosive growth seems all the more remarkable given that there was no marketing—word spread solely through customers.
And that’s one of the keys to Bonanzle’s growth—the site is built to be social and interactive, so people can discuss what they’re buying and selling, and build communities around various hard-to-find collectibles. “Our niche is everything but the ordinary,” Harding says. “We want to build a marketplace that fosters an environment around those weird, niche items. And add on the social experience.” (The target market is different from Valu Valu, another Seattle-area online marketplace startup, which focuses on “scientific pricing” of used video games and other standardized products.)
As for the inevitable eBay comparisons, Harding says his site is “simpler to use, easier to use, more powerful, and more interactive…People are a really important part of the equation at Bonanzle. You get a sense of the person’s personality. As a buyer, when you see that store, you can ask questions and shoot the breeze with the seller.” What’s more, he adds, “eBay is competing with Amazon on commodities, and we’re trying to go the opposite way, as far away from commodities as possible,” he says.
Bonanzle makes a commission of three to five percent on each sold item, and also offers premium subscriptions whereby sellers can get more placement for their goods on the site. The startup is already profitable, and now has two full-time employees and four contractors. As for further growth, it sounds like investors have been beating a path to Harding’s door, and the entrepreneur has been fielding their calls with cautious interest.
“Right now, the economic climate is just so terrible that the valuations I’ve heard for many reputable, successful companies are far lower than six or 12 months ago,” Harding says. “Given we are profitable already, and our growth trajectory has been quite good so far, we’re listening to offers, but we’re taking the stance of, all right, we’ll have a conversation, but we’re waiting for someone to make an offer that shows us they understand the vision of Bonanzle and will work with us to make a plan.”
Harding’s peers in the startup community have been raving about the company lately. “Bill showed me the site, and I was really impressed,” says Dan Shapiro, the co-founder and CEO of Ontela, a mobile software startup in Seattle. “There are people who want to talk about what they’re selling and buying. And they actively discourage that on eBay and Craigslist.” As for Bonanzle’s not needing to take outside investment, Shapiro (who has plenty of experience in fundraising and choosing partners) says he supports the strategy so far. “If you’re profitable in this economy, good Lord, don’t screw up a good thing.”
But rather than trying to build a mass-market site like eBay, Craigslist, or Amazon, Harding says his long-term vision for Bonanzle would be something more like Etsy, an online marketplace devoted to handmade goods. “They’re extremely successful. They dominate the market,” he says. “Their traffic isn’t huge, but they’re successful at creating this place in buyers’ minds.” With Bonanzle, it looks like Harding has at least begun to create that space for buying and selling long-tail merchandise—and connecting with like-minded people.