By Michael Raine
Reverb.com turned a lot of heads in 2015 when, only two years after its founding, the company raised $31.5 million from investors, which included Cheap Trick’s Rick Nielsen and David Lowery of Camper Van Beethoven. Now, four years in, Reverb.com has become a major player in instrument retail, taking lessons learned in the brick-and-mortar MI sector and applying them to an online marketplace that gives musicians a more customized and transparent customer experience than they get with Amazon or eBay. Reverb’s founder, David Kalt, has had a foot in both the tech and MI worlds. He founded online brokerage firm OptionsXpress Holdings, which was later sold for over $1 billion, and then decided to embrace his passion for music by running the Chicago Music Exchange retail store. In Reverb.com, he combined the lessons learned from both ventures to give musicians and instrument resellers a community and platform that worked for both sides of the transaction. And it certainly seems to be working, as Reverb.com handled around $120 million in transactions in 2015 and has continued to grow since then.
While the majority of Reverb.com’s sellers are individuals selling their own gear and collections, a growing number of MI retailers are finding the platform to be a useful way to supplement their in-store business and even their own e-commerce sites.
“It’s been a really frustrating thing for me getting any real critical mass or momentum on my own site,” says Brian Reardon, owner of Monster Music in New York, who has presented at NAMM U on how to maximize sales on Reverb. com. “A lot of the things that they have with their content on the site are things that keep people there and engaged and spending time on the site. But their platform is so good and so easy to use … They allow you to go directly with a link to, in my case, Monster Music’s actual store website, not their Reverb page, and that requires a tremendous degree of confidence and belief that people are going to enjoy the experience on Reverb to such a degree that they’re going to choose to buy it on Reverb. If somebody on Reverb connects to my store website and buys it from me, Reverb gets nothing.”
“Definitely one supplements the other, I find,” adds Andrew Aldridge, who handles the Reverb listings for Gear Music in Oakville, ON. “Like when you list something on Reverb and that will draw people to your site and there may be other new things that are listed on your site that you’re not listing on Reverb.” In addition, Aldridge says, he has found that occasionally his listings and even sales on Reverb will result in new potential customers walking through the door of his shop. “We’ve noticed some of the items that we put up, somebody will phone from Toronto or Hamilton or London and say, ‘I saw it on Reverb, is it still there? Can I just come pick it up at the store?’ So they can buy it through Reverb and pick it up at the store as opposed to paying for shipping, or if they want, they can just come buy it at the store.”
In his NAMM U presentation, Reardon offers five areas of focus to help retailers maximize their Reverb sales. He says by focusing on these five things, Reverb has become one of the fasting growing segments of Monster Music’s business, with $140,000 in sales in the past 12 months. While talking to Canadian Music Trade at the 2017 NAMM Show, Reardon added that when he first gave his presentation at the 2016 Summer NAMM show, his Reverb sales in the past year at that time were $100,000.
“So in six months, up $40,000 is an 80 per cent rate of growth on what, for my store, was already a meaningful revenue stream. So it demands my attention,” adds Reardon. “When you sit there and say, ‘I’ve got these channels of my business that are flat and this one is up 80 per cent,’ well, I’d be a fool to not be looking at it and not paying attention, to not be figuring out what we can do to continue feeding this growth.”
Reardon’s five areas of focus on maximizing Reverb sales are:
- Take great pictures of the actual gear.
- Get your listings seen by utilizing Reverb’s Bump feature.
- Participate in Reverb.com sales.
- Price gear right.
- Take care of your customers.
Number one is pretty self-explanatory, meaning use a proper camera and not a cell phone, have good lighting, and an uncluttered background to show off the item being sold. As well, Reardon advises, take a picture of the serial number so people can be confident in what they’re getting.
“Obviously if there is any damage or wear or anything of note, make sure it’s shown,” adds Aldridge “Years ago, when the only game in town was eBay, it was always the photos and the descriptions that sold the item. You saw that where you’d have two people with the exact same item up on eBay and one person just put a minimal description and they’ve got pretty bad photos, and the other person has got really nice, detailed photos and a great description, that is going to sell it. So definitely description and photos sell.”
Reverb’s paid-for Bump feature helps a listing get additional exposure in featured slots that show up at the top of more searches. The “bumps” are inexpensive and, best of all, the seller only pays for the added exposure if the item sells.
Given that Reverb takes just 3.5 per cent of the sale price, Reardon sees the Bump cost as worth it. “I bump all my listings so they get seen more often and I only pay for that when an item sells. That always ends up being less one per cent [fee] and then it’s a couple of per cent to clear the money. So, it’s about six per cent all in versus about 13 per cent or more with eBay when all is said and done. And that savings on the volume I’m running through the Reverb platform is like $12,000 a month [in savings],” explains Reardon.
In addition to sellers being able to put their own products on sale, Reverb also offers site-wide sales, such as a Memorial Day Weekend sale, for example. Both Reardon and Aldridge say participating in these sales is a good way to get your items seen. The way Reverb structures sales, according to Reardon, recognizes the already-thin profit margins that MI retailers work within.
“When they structure a sale, it’s 15 per cent off, maximum 20 per cent off,” he says. “You can participate and decide what products you put into the sales. But it continues to display an understanding of the industry. If I participate in a 50 per cent off sale, I’m going to lose money on every transaction.”
When it comes to pricing your items, Reverb supplies a useful price guide, which provides information such as average asking and sale prices for items across a range of years and conditions.
“First of all, I buy my stuff right all the time, so I am going to be able to price it on the lower end of the range, but I am still going to use the Reverb guide to inform what I price it at,” says Reardon. “I’m telling you, when I price it at the lower end of where things have traded at, particularly when it’s in decent condition, I sell it in a minute.”
In terms of shipping prices, which is of particular concern to Canadians, Aldridge notes that sellers can dictate prices for shipping to different countries and also that particular items will not ship to specific countries, so you can ship only within Canada or North America, for example, if you choose.
Last on Reardon’s list of five tips is “take care of your customers,” which should be obvious. That means respond to questions promptly, leave personalized feedback for buyers, ship all sold products within 24 to 48 hours, and don’t fight with customers.
“We have almost 550 feedbacks that people can read and they’re all real and they don’t hide any information like eBay does. From the beginning of time, you can scroll all the way back for every feedback we’ve ever gotten and a picture of the item. So people feel really comfortable buying from me,” says Reardon, noting Monster Music’s Reverb page has Preferred Seller and Quick Responder badges, which the platform provides to trusted sellers with a history of customer satisfaction. “[Customers] look at all the five-star, 100 per cent feedbacks and it becomes a salesperson for me.”
In only four years, Reverb.com has become a trusted and widely loved e-commerce site for musicians. But unlike Amazon, for example, MI retailers themselves are beginning to embrace the platform and consider it a useful tool for their businesses rather than a cutthroat competitor. If approached correctly, it could be a win-win for you and your potential customers around the country and the world.
Michael Raine is the Senior Editor of Canadian Music Trade