It is a website for buying and selling second-hand bikes. Won, intended for stores between one and 10 million turnover. It will close this year above 7, its average ticket is around €2,000 per bike and it is clear that it is a niche project, highly specialized and thoughtful consumption.
We talked about how it started, their ambition in that they have been expanding services and now there are shops that sell their bikes in Tuvalum and they even buy bikes directly and then take care of their sale. And they are already selling, with a growing focus, in Spain, Portugal, Italy, and Germany.
Let’s get to know the case in detail. with Ismael Labrador, co-founder and head of Marketing and product in Tuvalum.
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Interview Ismael Labrador (Tuvalum)
3:30 How was the birth of Tuvalum?
We analyzed the market trends that existed in the US and we saw that there was one that was a vertical of second-hand products for sports, we liked it a lot but we did not understand the business model. It was the end of 2014 and Wallapop was not what it is now, it was about circular economy.
People want to sell something, publish your ad and from there seller and buyer connect and look for life to see how they make the exchange and payments. The problem comes when you want to buy something of high quality and expensive and the seller is many kilometers from you, before buying something like that you prefer to check that it is in good condition. If you are a seller, it does not give you security that a stranger comes to your house to try the product.
We interviewed over 300 cyclists and athletes who had used wallapop and other buying and selling apps, most of whom had either had bad experiences or knew someone who had. Looking at the answers, we came to the conclusion that the best thing was to digitize all the rental processes.
We set it up in a simple way with a home WordPress to test if there were cyclists interested in uploading ads and if they were interested in buying them, we saw that it made sense and from there we built with our savings. A second-hand marketplace specialized in bicycles, later we added the tuning service.
We make the transaction of putting the buyer and the seller in contact. What really adds value is providing the security of the transaction, which meant that we had to take care of managing the payments, logistics and that the bicycle is in the state indicated by the seller.
12:40 Are there ratings for sellers like in other marketplaces?
Not because we are in the middle, We plan that the seller is trustworthy and that the buyer will receive the bike in the best condition. Another advantage we give is that You will never have to meet the seller or the buyer, when your bike has been sold, the transaction is complete.
For the buyer, the flow is always the same, it is like buying on Amazon, you see the product with certain characteristics that is sold on a platform, you buy it and that is what you will get.
We have 3 flows if you are a seller:
- If you are a private seller you upload your ad with its characteristics and status and when someone buys it, we send the packaging material to your home so they can pack it. We pick it up, we bring it here to the workshop and it is verified that it has not been stolen and that its condition is as stated, we make adjustments and, in case of needing repairs, we give you an estimate.
- In case of being a store that wants to sell, we have 700 that sell with us, we are your online channel. These are small stores that find it difficult to compete in the digital world, so they upload their store catalog to Tuvalum and we take care of selling them.
- Now we have a new system, which we added this year, What is appraise and buy bikes. You upload the bike as an individual and we offer you an immediate purchase system. We pick it up, check it, pay for it and sell it like Tuvalum.
17:40 Where and how does Tuvalum make money?
We earn success, if the bike is sold we earn a commission. The marketplaces that charge you to publish ads and renew them seem like a mistake to me, in the end the ads that come out are not the most attractive products, but rather the ones that people pay for. Product search engines are inefficient because what they don’t want is for you as a buyer to find the product the first time.
We had to get someone looking for a bicycle with certain characteristics to do so with some simple filters and charge the seller in the event that we sold, not for publishing an ad. We make a fixed commission to the seller and the buyer earns another commission. Variables depending on the product.
25:00 What is your billing?
This year, in the absence of what happens at the end of the month, we are going to close above 7.5 million of volume transacted. We have sold between 3,000 and 4,000 bicycles. We transfer to the web the same treatment that we would have if we were in a physical store.
Many people believe that it is to set up an ecommerce and no, you have to identify the type of customer that enters, we have over 10 types of identified clients and we take care of them. Knowing your tastes and interests. Sell the right bike to the right person. No one from the sales team goes on commission, we sell bicycles that will be used for a minimum of 2 years, If after a few months she discovers that you have cheated her with the size or type of bicycle, she will not be happy and will not recommend you.
28:52 You have divided each country with its own URL, you don’t have, right?
The catalog is the same, the back office is the same, the only thing that changes is the domain. The catalog we have is Spain and Portugal. The buyers are from other countries but we still do not have it enabled for sales because we have to solve some logistical problems.
Now in 2022 one of the projects we have underway is to open the sale in France and Italy. 30% of our sales are international, this year we have grown a lot outside of Spain, It was one of our challenges for this 2021 and we began to apply a playbook and it has worked.
A couple of years ago we made the mistake of wanting to be international by translating domains, and it is much more. Managing marketing campaigns in 5 languages and 5 markets is not easy or cheap. In addition to serving customers from 5 countries in their languages, if you want to serve everyone, it is not easy or cheap either.
We maintained the domains organically, we bet on it so that it gradually generates volume and visits. A from there create playbooks to go from country to country, the first country was France where we created a dedicated team of 5 people and we started betting on less aggressive channels, testing with and media agencies. We have a large DATA in the world of bicycles and we take advantage of it.
41:11 In Spain, do you do the same marketing or are you more aggressive?
We are more aggressive. You can allow yourself not to be aggressive when you start from a very low level and want to grow, at the moment in which you have a won position and you want to maintain it and continue climbing, the effort must be greater. Your resources must be greater and your marketing effort greater.
We work SEO from minute 1, it brings us 30% of sales todayY. Google Ads, but focused on the lower part of the funnel, and we are doing a lot of prospecting on IG and , because it is very easy to segment but not we know when they want to buy.
We have a 0.10 in conversion rate. The price of bicycles is very high and requires a maturation process and we sell a very niche and wishlist product.
51:30 How do you work the ?
We have a model where promotions make no sense. That of bombarding the user with discounts is not in our business, the cyclist does not buy a bicycle every day. to our clients are advice on how to maintain the bicycle, guides on how to choose sports clothing in winter or bicycle sizes. So we build email marketing strategies around this.
Now we work on a sequence of content depending on whether you have registered with us or if you have bought a bicycle. It is important to accompany the customer after buying from us and make specific content that he may like, knowing his tastes and location.
58:00 What are your challenges for 2022?
We have many challenges Now that we are no longer a startup, we want to play in another league: to be the benchmark website for buying and selling bicycles in Europe. Transforming the bicycle industry sounds ambitious, but this industry hasn’t changed a bit in 50 years. We can build that digital ecosystem where the bicycle industry is based and adds value to all agents, end customers, stores and manufacturers.
I have to scale marketing team with a big powerful balance. We also want to consolidate bicycle ecommerce, buy, appraise, remodel and sell. It is working and the goal is for it to end up being part of the Tuvalum catalog. We are closing an investment round to continue climbing.
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