Most of us have things lying around the house that we plan on getting rid of someday. That’s why one startup is attempting to solve the problem of having unused stuff by sending out empty boxes that you can ship your stuff in. In return, they’ll send you money.
When I first read about the company, Sold, a few weeks ago, I happened to be standing in my home office which had a few boxes that I planned on selling on eBay at some point. iPhones, MP3 players, headphones, hard drives, brand new brakes for a car I no longer own, the list goes on. So of course I tried it out, and here are the results.
Getting A Product Accepted Isn’t Easy
Based on the initial descriptions of Sold, I came to the conclusion that I could snap a few photos and Sold would immediately send over a box. Unfortunately that’s not how it went down. I took a photo of a set of brand new Sony headphones in the box that I had received as a gift. I then waited, expecting to receive an offer relatively quickly. Unfortunately it wasn’t until the next day that I received an offer of $69. You have another 24 hours to respond at which point the offer will expire. For me, I let the offer expire the first time around.
At the same time, I tried selling an old Nexus One phone. For that product I waited a day, at which point they sent me additional questions asking for more details to prove the product was real. They asked me to take a photo with the screen on, to describe what carrier it uses, and other questions about the product specifications. At this point I realized that I was effectively doing a similar amount of work that I’d go through with creating an eBay listing, however someone on the other end would type up the eBay listing for me, using the description I provided.
I decided to take another shot at the headphones since it required the least amount of effort (the product was literally in a box that had never been opened). The following day I got an offer of $69 again and accepted it.
The Selling Process Is Not Consistent
After approving the price, I expected Sold to send me a box immediately. That’s not how it works though. They only send the box once the product has been sold. In other words, you agree to a price and then wait until it’s sold, no matter how long it takes. Another way of viewing this is that the original owners of the goods are providing free drop-shipping warehousing services to Sold (with the exception of the box that they’ll send over to you).
As it turns out, my headphones ended up being sold while I was out of town. This past weekend, weeks after I first agreed on the price, I received a message on my phone that the product had been sold and I now had 48 hours to ship it. I wasn’t going to be able to send it in time! What the heck?!?!?! It became blatantly obvious that this problem would happen again with other customers.
Fortunately for Sold, I was only going to miss the deadline by under 12 hours so the customer will end up getting the product in time. However that wouldn’t have been the case if I wasn’t in town.
Conclusion: A Flawed Yet Intriguing Model
If Sold is genuinely using eBay to list the products, which I’m assuming they are, they have significant risk of not getting paying customers their products on time. Also, what if someone claims to have a designer handbag that turns out to be fake? The result is an inconsistent experience from the buyers as well. Some will get their products on time, other won’t. Some will get the product that was promised, others won’t.
So how can Sold mitigate the various risks that they face? On the inconsistent selling process, the company could choose to warehouse the products themselves, ensuring a timely delivery every time. Warehousing the product would also cures another risk: it enables the company to avoid fraudulent offerings. However their biggest risk now is not an external one, it’s internal. That risk is that most of the initial users have bad experiences. As my own experience illustrates: Sold is far from being a seamless process.
Making it a seamless process requires an immense amount of capital, something I’m sure 3 MIT grads have a great shot at acquiring. Yet this problem may prove to be an overwhelming one to solve. We’ll have to wait and see if the process improves. I for one, am not quite sure whether or not I want to go through it again.