MoveLoot: Making Moving Hassle-Free
Changing the Process of Moving
Universally, one of the least enjoyable experiences is moving. Four friends who moved cross-country from New England to San Francisco had such negative experiences moving and buying furniture that they quit their jobs and started a company called Move Loot.
What is Move Loot?
Move Loot serves a two-sided marketplace for used furniture. The way it works is as follows: a seller of used furniture can upload a picture of their item to Move Loot. If it passes inspection, the Move Loot team will pick up the furniture from the seller for free and hold it in their warehouse for 60 days while they feature it on their website. If the furniture is sold, 50% of the selling price is passed to the original owner. If the furniture is not sold after 60 days, Move Loot offers the opportunity to further discount the selling price or donate the furniture.
Business Model:
Move Loot is an online platform where people can buy and sell used furniture.
Creating Value: Move Loot focuses on creating value for both the buyer and seller. For the seller, they provide storage for an item that the seller wants out of their home, handles logistical challenges with moving items that can be bulky, and takes care of finding and securing a buyer. For the buyer, Move Loot provides a quality check on the furniture, centralizes the sourcing of used furniture by category, and handles logistical challenges with delivery. Providing next day delivery / pick-up services is the key differentiating service between Move Loot and other online marketplaces for used furniture.
Capturing Value: From a monetary perspective, Move Loot keeps 50% of the money for each sale. They are also able to leverage their large warehouse spaces, which they can rent at cheap prices, as well as on-demand labor in order to provide shipping and delivery services that differentiate them from competitors like Craigslist.
Operating Model:
Move Loot’s operating model allows them to differentiate themselves with regards to their value proposition to consumers. The number one concern for buyers and movers of furniture is shipping / delivery and storage. For sellers in particular, the price they receive for their furniture is often not a large concern. Their operating model is designed to support their business model.
First, Move Loot leases large warehouse spaces for low prices that are located near large urban cities where there significant traffic of movers (i.e. Los Angeles, San Francisco, and New York). They use this warehouse space as a holding space for the furniture that they feature on the website. They also own and operate all of the trucks that perform each of the pickups and deliveries. While these tasks are difficult for any sole individual to do, they are much easier costs to absorb for a large entity.
Second, Move Loot has developed their own internal logistics technology platform that allows them to track inventory and schedule delivery of large bulk items. This technology platform has been critical as the company grows and expands the volume of transactions they handle in a day. Had the company outsourced their inventory tracking and delivery platform, the margins would be significantly lower and Move Loot would not have been able to grow as quickly.
Because Move Loot is hyperlocal, with warehouses no less than four hours away from the point of delivery, and has its own internal logistics team, the company can guarantee next day shipping for large bulk items – a huge differentiating capability in the world of used and new furniture. This aligns well with their business model and value proposition of providing a hassle-free furniture buying experience for consumers.
Third, Move Loot has been very deliberate about which geographies they expand into. Their footprint extends to Los Angeles, San Francisco, New York, and Durham – all of which are cities that meet a threshold level of urban density but are in close proximity to pockets of cheap real estate.
Positioned for Success:
In two years, Move Loot has raised over $50M and has expanded to three states and eleven cities. Growing at over 100% monthly, the company is doing phenomenally well. The high level of capital investment required to rent warehouse space, buy moving trucks, and develop logistics software create a barrier to entry that insulates them from competition. In addition, the company benefits from the network effect most online marketplaces have. As more people post their furniture to Move Loot, buyers will be drawn to the website. The more buyers that come to the site, the larger the market is for sellers. As the incumbent in key markets, they have a natural advantage that will be difficult to displace.
Sources:
- Interview with founder and COO Shruti Shah
- Interview with founder and CEO Bill Bobbitt
- http://www.moveloot.com
- http://www.thewire.com/technology/2014/07/an-interview-with-the-founder-of-move-loot-the-airbnb-of-used-furniture/374110/
- http://techcrunch.com/2015/02/12/move-loot-9m/
MoveLoot started up by some great UNC grads (yay NC!)– awesome team & great company. Enjoyed your post!
Really interesting company and business model. The scale up strategy should be interesting. Focusing on gaining geographic critical mass is key… Maybe we should start another one in Europe!!
Taarini,
I find this business model very interesting and it made me think a lot about a concept i heard a couple of weeks ago of “augmented” marketplace.
A couple of weeks ago I went to a presentation of thred-up (an e-commerce that buys used clothes for children from consumers and then sell them back to other consumers). Thred-up has a big inventory and operational costs, but differentiates itself from Ebay since for the consumer it adds the value of no operational shipping issues in a way that is similar to Moveloot (only difference from what i understand above is that Moveloot does not purchase the goods while holding them).
The CEO of Thred-up talked about augemented marketplace. The key idea is that rather than having a very lean marketplace where you are not integrated Thred-up was operationally very heavy but by doing it added lots of value to consumers + increased the barrier to entry.
As for MoveLoot i think that we have seen in the past lots of marketplace which were very light (basically connected consumers) and VC loved them since they were light and easily scalable. However, i think that in the future marketplace as moveloot will become always more popular and building great operations is key to differentiate. I also think as Marco mentioned above that having critical mass is key and since gaining critical mass is very expensive, there might be an opportunity to build something similar in other markets (e.g. Europe, Latin America,…).
And by the way it would be interesting to hear if you think that the same model could be applied to other goods (e.g. cars, bycicles, specific clothes, ,….).
Thanks for sharing!
Enjoyed the post! I’ve moved 4 times in the last 5 years and had this problem every single time. I thought it was interesting that they are able to take 50% of the sale but then thought that the alternative is often just throwing the furniture away or trying to give it away to someone so you can get it off your hands quickly. Interesting model keeping it hyperlocal.
Had heard of MoveLoot but wasn’t familiar with the operating model. Interesting that they’ve taken the approach of owning their own trucks and building out an in-house logistics system to enable their business model and create barriers to entry. As Marco pointed out, there are some key differences vs. eBay’s model given the value they add through storage, logistics, quality inspection and facilitating higher quality product displays to buyers. While more capital intensive (and more operationally involved), I’m a big fan of the approach and value proposition.
This reminds me of a used car marketplace called Shift that was founded by a couple GSB grads a little while back that has also been growing fast. Seems that this operating model has real potential to solve the problem of selling bulkier items that are higher involvement than some other used goods that are simple to sell based on pictures or online descriptions alone.