Three years ago, Tami Zuckerman was pregnant and cleaning out her house to make room for the baby. Frustrated with selling things on Craigslist, she craved an alternative. She asked her husband, Carl Mercier to help her develop an app that allowed her to sell things from her phone. Today, the husband-and-wife team runs VarageSale, a startup based in Toronto trying to chip away at the Craigslist choke-hold on the online classified market.
VarageSale is unique for a number of reasons, including, of course, the fact that it looks and functions more like an actual garage sale than a board of classifieds. A list of items with pictures fills the page, complete with descriptions and prices for each item before you even click on it. In order to buy or sell anything, you have to log in with Facebook and find your local community, where admins will review your request and accept or reject your enrollment. Prior to logging in you can see pictures of items and prices, but only after providing credentials can you see the full name of the seller and their picture, and make a bid on an item.
The communities are necessarily much more local than on Craigslist, where a “community” could be an entire region or state. On VarageSale, a community can be a city, or often just a neighborhood, making it easy to know from exactly where the resold items are coming and providing what seems to be a more trustworthy context and set of users.
VarageSale is also focused heavily on the mobile market – the app is number 60 in the Apple App Store and rising – a focus that Craigslist has failed to apply, even with a mobile website (that cuts off listings and is often hard to read). VarageSale’s app has the full functionality of the website, as well as the ability to pay with credit card directly in the app (a HUGE differentiator) in case users are not comfortable bringing cash with them to meet a stranger.
VarageSale charges users no extra fee to use a credit or debit card, which means that for now, they’re absorbing the 2 to 3 percent transaction fee that its partner Stripe is charging. And it’s probably best that VarageSale doesn’t charge transaction fees. After all, Craigslist doesn’t, and though users says they feel safer on VarageSale, many would probably jump ship if they had to pay.
“This is just a way to make the platform more compelling,” CEO Mercier said.
Mercier is vague on the number of people using VarageSale, saying only that the service has “millions” of users, but 50 percent of them check the app at least once a day. At the moment, VarageSale makes no revenue, and charges nothing for the service. But that didn’t stop them from raising $34 million last year.
One of the biggest obstacles for people switching from Craigslist to VarageSale is the authentication process. It makes VarageSale safer and verifies the locality of users, but getting people into communities takes time and as the service grows, local administrators could get swamped and demand a much greater expense. Additionally, given the hyperlocality of the app, if an administrator has a grudge against someone, there could arise a conflict of interests that affects community growth and accessibility.
It’s not likely that Craigslist just goes away, despite its 90s aesthetic and basic interface. That being said, VarageSale is proving to be a threatening alternative for those seeking something a little flashier, cleaner, more user-friendly and more local.
If VarageSale wants to walk away with the title, I think they should over-promote the fact that they’re more secure and more local than Craigslist. It’s a very personal market, and one based heavily on convenience, so drill on the differences that people really care about: privacy, using their phones and not driving very far.
Most importantly though, VarageSale should make my mom pretty happy; she’ll (finally) get more junk out of the house and feel cool doing it thanks to the slick technology. Great job in advance, mom. Really though, the junk…
