Swappa re-homes millions worth of smartphones

About 90 million Americans say they swap out their smartphone every two years, according to a 2015 Gallup study.

That means every day about 123,000 used smartphones either find a new owner or a dark home in a drawer, frittering away their value. But one Kansas City startup is already helping thousands of used-smartphone owners find interested buyers via its online marketplace.

Founded in 2010 by St. Joseph native Ben Edwards, Swappa has facilitated the sale of more than $43 million worth of mobile devices. A computer engineer by training, Edwards’ idea for Swappa came about when he had trouble reliably procuring Android smartphones for development testing.

“One time, I bought a phone (off Craigslist) and we pulled away from the parking lot at the same time and were sitting at the stoplight together,” Edwards said. “They were looking over at me nervously, and then they sped off through the stoplight and drove away. At that point I knew I had been screwed over somehow.”

That mishap led Edwards to launch Swappa, which started out only selling Android smartphones. In the last few years, Swappa has begun reselling other smartphones, smartwatches, tablets, e-readers and virtual reality headsets. The company has about one million users who carry out nearly $5 million worth of transactions each month, Edwards said.

To use Swappa, a seller creates an account, enters the device’s electronic serial number, submits verification photos, sets a price and offers details on the product. Buyers can peruse thousands of smartphones knowing that the devices have been vetted by human moderators that verify a device’s functionality. Users purchase a device via PayPal and a seller has two days to ship the item. Swappa takes a flat $10 fee — which the buyers pay — from each transaction.

A 36-year-old, Edwards said that Swappa aims to bring transparency, value and safety to the process of selling used phones.

“We were really born out of the desire to prevent scams when buying mobile devices,” Edwards said. “We want to help people capture the value of their devices.”

With thousands of mobile devices re-entering the marketplace each day, there’s a sundry of reseller services competing with Swappa, including wireless carriers, eBay and Craigslist. Edwards said those sellers often complicate the posting process and frequently charge far more to sell the device. Swappa aims to be a simple alternative that retains more of a device’s value for the seller, Edwards said.

In addition to its re-selling marketplace, Edwards said that Swappa has begun selling data it captures on the price points of various devices. Many companies, he added, have expressed interest in knowing the resale value of electronics, in addition to how often people switch gadgets.

A team of 25 employees — many of whom work remotely — Swappa has bootstrapped its business and intentionally avoided investment capital. Edwards said the company’s choice to hire remote staff has allowed it to reduce overheads and attract talented team members around the world.