Want to gain an intimate understanding of the term enthusiast? Strike up a conversation with any avid car collector or sports fan on an internet message board about their favorite vehicle or favorite team. You’re likely to be confronted with a level of passion and knowledge that seems entirely foreign to an outsider, but which makes them just one member of their massive respective communities.
It’s this audience which Panjo targeted when it launched its enthusiast-focused ecommerce platform in January 2013. Chad Billmyer, the company’s co-founder and CEO, recognized that despite representing one of the most powerful buying forces on the Web, these superfans were regularly relegated to Web 1.0 commerce experiences. Rather than transacting through beautiful storefronts designed to reduce friction and drive discovery, most of the $2 billion worth of transactions happening in this category annually occurred by way of crude peer-to-peer classifieds listings.
Panjo set out to fix this problem by building a modern eBay-like layer on top of these message boards that facilitates listing, payments, identity management, and fraud prevention, among other key features. Today, the company took the biggest step forward in its young life by integrating with the largest and most popular forum hosting platform on the web: Internet Brands-owned vBulletin.
VBulletin hosts more than 100,000 websites and online communities, including 78 of the 10,000 most trafficked sites on the Web and 3,000 of the Top 1 million. For example, automotive fanatics don’t hang out on eBay. They shop for specialty parts in forums like Porsche-focused Planet-9.com or BMW-centric BimmerForums.com. The same goes for winter sports enthusiasts and the popular site TetonGravity.com. (All three of which are hosted on vBulletin.)
“These forums have already accomplished the hardest part of building a marketplace business: creating initial liquidity,” says Panjo investor and Spark Capital partner Andrew Parker. “So, if those communities could carry their inventory and reputation into a piece of software that offered a superior user experience, I thought it would be a compelling value proposition to both buyers and sellers.”
Initially, Panjo was just an optional plugin for those operating their sites on top of vBulletin. The company has integrated its platform with 50 test communities to date. But, by virtue of the new partnership, the software will be preinstalled into the latest version of vBulletin released today. This fact should be like a dose of steroids for Panjo’s message board acquisition funnel. And with more connected communities, will come more buyers and sellers, more selection, and more liquidity – the true measuring stick of any commerce marketplace.
Panjo didn’t invent this model, it’s simply resurrecting it from the Internet ashes of the early 2000s. As MuckerLab accelerator managing director Will Hsu notes in a blog post about Panjo, a Mucker Lab graduate, eBay was the earliest community forum to add a commerce layer. Hsu writes:
Today, when people talked about the convergence of commerce, community, and content, they forget that eBay was the original user generated superstar. It took eBay almost 5 years (2006 – 2011) to pivot into the NEW eBay, a merchandizing and payments juggernaut capable of taking on Amazon. It was a long, hard, and gut wrenching turn around – eBay [had] to give up its first love in order to play with the big boys. It was the right decision combined with case study-worthy execution. EBay is now growing and becoming relevant again – John Donohoe is an amazing operator and strategist. But to do so, eBay has left its billion dollar flank wide open for a new entrant to recreate the community and passion that had defined it in the first place.
Notably, Hsu was a Business Unit Manager and head of local trading at eBay from 2004 through 2006. He’s seen this movie before. Like Billmyer, he shares the vision of Panjo unifying the most passionate enthusiasts in the automotive, sports, and hobby verticals. If eBay is for the everyman, Panjo, they hope, will be for the most discerning consumers in a few key categories.
Panjo raised a $1.6 million led by Spark Capital July 2013, at which time it was doing more than $500,000 in monthly transaction volume and climbing. The company charges sellers a flat fee of 3 percent of the sale amount, which is a third of that charged by eBay, in addition to passing through payment processing charges where relevant. The company also allows message board operators to add on their own “final value fees.” Early on, the average transaction size within Panjo marketplaces was $400, according to Billmyer, far higher than on eBay or most other marketplaces (except those selling actual cars, fine art, or real estate).
Not only does Panjo facilitate on-site listings for its marketplace partners, but the company also operates its own commerce destination at Panjo.com. The site features tens of thousands of items ranging from auto parts to antiques searchable according to specific item or browseable according to category. But unlike eBay and other generalist marketplaces, nearly all items are listed by highly passionate and knowledgeable members of their respective topical communities.
“Panjo.com directs buyers to the best communities for the items they desire,” the company writes in a statement today.
As I wrote in July:
General purpose marketplaces like Ebay and Craigslist are ill-suited to deal with the specific needs of the most discerning auto, sports, and hobby enthusiasts. We’ve seen this same conclusion reached in other categories such as consignment fashion, which is why sites like Tradesy, ThreadFlip, Poshmark, and ThreadUp all exist. Given the multi-billion dollar size of the enthusiast market, it makes perfect sense that there would be an opportunity for a purpose-built ecommerce marketplace – one that can offer specific features that cater to this community.
Marketplaces are one of the hottest investment areas today, with VC firms like Greylock, Benchmark, and many others publicly state their interest in the category. [Disclosure: Greylock is an investor in PandoDaily.] But as we’ve seen in other categories, it’s near-impossible to please everyone with a single product or service. It’s not surprising that eBay chose the fat middle of the bell curve.
It’s at the extremes of this curve that Panjo sees its opportunity. And today, the company got into bed with the gatekeeper to millions of these rabid online consumers.
[Image via NightImport]
- PanjoMarketplace for enthusiasts
Panjo is a marketplace for the world’s most ardent auto, sport, and hobby enthusiasts. Existing marketplaces poorly underserve and ignore this audience. Each year, 350M worldwide enthusiasts spend $15B buying products, parts, and accessories from their peers through a patchwork of inefficient methods. Panjo makes it convenient, faster, and more secure for enthusiasts to transact.