American buying habits push Swappa to $70M in 2017 hand-me-down tech sales

Grown from a one-person, side-hustle project to a team of more than 30 people, Kansas City-based Swappa is swelling.

The user-to-user marketplace for buying and selling used technology enjoyed its best year to date in 2017. The platform sold more than $70 million in hand-me-down electronics in 2017 — up about 17 percent from 2016, said Swappa founder Ben Edwards.

A bulk of those 2017 sales are from smartphones, but the company is also growing thanks to new offerings of laptops, video games, gaming consoles and smart home tech, said Edwards.

“It’s been exciting to see Swappa grow,” the St. Joseph native said. “Our first year of operation, we saw about $500,000 in marketplace activity. … We keep growing.”

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, laptops and other electronics 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. Swappa charges zero fees on the buyer or seller for products less than $50.

In total, the firm has sold more than $265 million of devices since its 2010 founding.

Swappa’s simplicity and flat-fee structure enable quick adoption and loyal customers — and new offerings present a promising 2018, Edwards said.

“We have over 1 million registered users and had hundreds of thousands of buyers and sellers in 2017,” he said. “Expanding into laptops, video games, smart home tech and other categories represent a huge growth opportunity for Swappa. … our current run rate is $100 million (for 2018).”

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.

The mass proliferation of smartphones and Americans’ buying habits have helped Swappa grow, Edwards said. But as it grows, Edwards wants Swappa to stay focused on its service and low fees, which he said separates it from the likes of eBay, gaming stores or pawn shops.

“While the average consumer may get a new smartphone once every one to two years, we expect to see buying and selling with much greater frequency from new and existing users,” Edwards said. “We’re doing this without sacrificing the high-touch customer support that Swappa is known for. Our ultimate goal is to become the best market for these products as measured by both value and service.”

Swappa was named a Startland News Under the Radar Startup in 2016.