Short summary
Our team created a website called Penn Marketplace which facilitates the exchange of a variety of goods and services throughout the Penn community. We originally intended to focus on buying and selling furniture, clothing and household items. As our venture developed, however, we realized that people were looking to sell all sorts of items. As a result, we decided that in order to make the most money, we should allow people to sell almost anything they wanted. In order to initially gauge the interest of the Penn Community we developed a survey, conducted interviews, created a Facebook page and a Quick MVP landing page. After receiving positive feedback, we went on to create a website where people could sell and buy different items/goods. When marketing our venture, we employed both traditional and untraditional forms of marketing. We started off by creating a Facebook page as aforementioned, a twitter page with live updates on new items posted on our website. We also flyered throughout campus with and without a QR code and even advertised by writing on whiteboards in GSRs throughout huntsman. For the final challenge we created a negotiations page on our website.
Financials
Our sales at the start of the challenge were zero. By the end of the second challenge we had made 5 sales totaling $47.00 in transactions leaving us with $2.35 in revenues. Our profits at the end of the second challenge were negative, however, because we had spent $15.00 on Facebook Advertisements and $5.40 on updating our website. This left us with a profit of $-18.05. By the end of the third challenge we sold 3 more items off our website which increased our total to 8 sales which totaled $337.00 which left us with $16.85 in revenue. Our total expenses were $6.84 from the facebook ads and $5.40 from the website upgrade. This left us with a total of $4.65 in retained earnings.
Product/Service Innovation
We created a negotiations page on our website to reach an optimum margin between the buyer’s willingness to pay and the seller’s asking price. It increases interaction between customers, which is a great way for them to be engaged with the product. The goal of this website is to streamline transaction processes within the Penn community so we made sure that the added feature of negotiating does not decrease inefficiency. Therefore, we set up the negotiations page such that Penn Marketplace will still be the intermediary between the two parties to avoid added administrative work for either the buyer or the seller. This would also avoid the loophole wherein buyers and sellers can just contact each other, (which is further explained in the next section). Of course, this new feature is entirely optional, thus giving customers the best of both worlds.
In addition, we hoped to expand our customer base with this product innovation to those who want to buy higher-priced items to increase the margin we get. From the data we have gathered throughout this project, we see a greater turnover in low-priced items (< $10), compared to the more expensive items (> $50) such as mattresses and branded clothing, which remain unsold. Therefore, having the chance to negotiate provides an incentive for both parties: Naturally, buyers will want to negotiate a lower price; on the other hand, sellers know that expensive items are harder to get rid of, so they would benefit from knowing what interested buyers are willing to pay.
The last product innovation we added was a delivery service for the products sold on our website. After employing the attribute mapping tool we learned in class, we realized that our lack of delivery service was a basic non-negotiable feature that all of our competitors such as eBay and Craigslist already offered. By not having this type of service we realized that we were likely disatisfying our customers and potentially causing them additional stress. For example, if someone were to purchase a mattress through our site, they might find it extremely inconvenient and bothersome that they would be required to set up a time to pick up the product and move it to wherever they needed it or even hire a moving service depending on the type of the service. Using attribute mapping enabled us to quickly identify this basic need amongst our customers and to improve our services.
Idea Generation
Customer interviews
Although we were getting much more clicks because of heightened advertising, our sales were not increasing. We discussed what could be causing potential customers not to follow through despite landing on our website, and decided to test whether more people might be interested in buying products knowing that they could potentially lower pricing. Moreover, this idea stemmed from the fact that while interviewing a few interested customers who have not made any purchases yet, a number mentioned that they hoped to get sellers’ contact information in order to bargain for lower prices. However, we wanted to prevent exchanges from occurring without the facilitation of Penn Marketplace. If buyers could contact sellers before paying for their item/s, they could easily purchase straight from the sellers, eliminating the 5% cut Penn Marketplace had hoped to gain as profit. Likewise, among those who have posted items for sale on the website, some included the word “Negotiable” under their product descriptions, but were unable to negotiate prices. As a result, we decided that having a page for anonymous negotiations between buyers and sellers would be the best way to respond to requests for bargaining opportunities.
Why this one instead of others?
Our team was hoping to create a tab where buyers could select categories to find items they were interested in purchasing more easily. We felt that allowing customers to browse Penn Marketplace with more ease would increase the chances of buyers finding exactly what they need. The problem with this innovation was the number of items we currently have posted on our website. If we decided to implement placing items in different categories on our website, buyers would find that each category would not have too much variety in product range, and this might not reflect well on the reputation of our venture. Consequently, we decided against placing products under specific categories for now. Nevertheless, we believe that this product innovation would be very beneficial in the future, once Penn Marketplace receives more submissions from people looking to sell items (which could potentially occur at the beginning of next semester).
Although at first it took some time to create the website and to generate interest, we slowly started seeing results. After a few weeks Penn Marketplace had eight transactions and over $300 worth of goods were sold. While the numbers were not mind blowing, it became very clear that during the course of this venture people were not only interested in Penn Marketplace but they also were utilizing it.
Reflection
In terms of actually implementing the product innovation, our team did not have many difficulties. It was relatively easy for us to create the actual negotiations page and to incorporate it into our already existent site. The issue for us was the fact that people were unaware of this new feature. Since we had spent the past few weeks marketing our venture in one way, it was difficult for us to switch gears and try to communicate our new value proposition in a quick and efficient manner. We advertised on facebook as well as through flyering again, however, the number of sales seemed to slow down a bit this week and we weren’t seeing as many postings. We did, however, achieve our goal to sell higher-priced items (we sold 2 >$100).
Given a do-over, we would have chosen a venture that is more suitable with both the timing and timeframe that we had. First, because we began towards the middle of the semester, many people were not looking to buy or sell goods at this time. We believe that had we started this at the end of the semester, we would have probably seen better results. The second thing we realized was that our venture was more of a long-term venture rather than a short-term venture. We originally thought that there would be a lot of Penn students looking to buy and sell different unused items and that they would want to do it quickly. Unfortunately, seeing as we only had a total of 8 sales and 20 total posts, we realized that maybe this was not the case after all. Lastly, we didn’t realize at the start of the Entprentice how small our margins really were and how many products we would need to realistically sell in order to break even. Looking back we may have considered a different business model that would have enabled us to retain more earnings.
