Over the last five years, a number of new collectible marketplaces have popped up in hopes of taking share away from legacy platforms like eBay. The boom in sports cards that happened during COVID accelerated this trend, as seemingly every new company entering the space had on its roadmap to develop their own marketplace. While strategies about how to get enough buyers, sellers, and items on their platforms differed, all of these startups had the same goal in mind: take share away from legacy marketplaces that consumers were getting frustrated with for reasons like the fees they charged or too many scammers.
MySlabs, a collectibles marketplace founded in 2018, is one of the more successful upstart marketplaces to enter the industry in the last few years. Its focus on solving for consumer pain points combined with its launch on the eve of the collectibles boom of 2020 has allowed it to gain a large, loyal following, growing the platform today to over 70,000 registered users and $80 million of gross merchandise value. While numerous other businesses in the space have raised venture capital or private equity money, MySlabs has been bootstrapped since launch and recently launched a crowdfunding campaign to help accelerate its growth into new end markets and platform offerings.
How has MySlabs achieved product-market fit and success in the last five years, what is the company’s growth outlook, and what new opportunities should it consider in the future?
Let’s get into it…
Mint Condition’s Take:
How has MySlabs found sustained success as a marketplace?
- First-mover advantage: MySlabs had prescient timing (or maybe they were a bit lucky), launching in 2018 right before the hobby craze that started during COVID. The company was able to gain a loyal following fast by positioning itself as an alternative to the high-fee, return-laden existing marketplaces, like eBay. When the hobby took off, so did MySlabs, as both buyers and sellers were looking for trustworthy sites to transact on with lower fees and other issues.
- Community-focused approach: Since its launch, MySlabs has been focused on solving for collectors’ pain points. Four main characteristics set the company up for success. First, allowing only graded cards to be transacted removed the ability for buyers to claim issues with card condition, which is a significant driver of buyer claims and returns on other marketplace. Second, its 1% seller fee was industry-low. Third, its no-return policy ensured that transactions were final and sellers did not have to worry about buyers reneging on deals. Finally, MySlabs manually verified all sellers who wanted to transact on the platform, reducing the presence of bad actors. Over the last five years, even as it expanded into raw cards, MySlabs has not changed the core tenets of its marketplace, which has led to a solid base of collectors who use it.
Could a new business effectively replicate what MySlabs has created? Or could a legacy marketplace solve for these pain points to neutralize the company’s competitive advantages? With where the hobby is today, the answer in the short-term is no and in the long-term is.. maybe. There is “market fatigue” right now across the hobby. Plenty of new startups have tried to develop marketplaces as either a core or secondary offering. Collectors don’t know why they should join one marketplace over another and the learning curve to sign up, upload inventory, and transact is different across them all. This is why the first-mover advantage MySlabs had still persists through today. Combine that with a hobby that has seen continued price and transaction volume slowdown since the highs of 2020-21 and the barriers to success of a new marketplace are significantly higher than they were in 2018-19.
As for legacy marketplaces like eBay, it will be more difficult for them to match the value props that MySlabs has been able to offer its customers. What is more likely is that existing platforms will try to continue offering new, innovative, and premium services to justify the cost of customers doing business on their site (e.g., higher fees and more transaction disputes), like free vaulting and collection management tools. They are not nimble enough to overhaul their fee model, for example, and match the industry-low rates that MySlabs has. And perhaps most important, collectors view MySlabs and other new marketplaces as “friendly alternates” to using the industry behemoths. Across all industries, there is always a core group of passionate, loyal marketplace users that want to support innovative, alternate platforms rather than the longtime players that aren’t traditionally as customer-friendly.
Where does MySlabs go from here? Its focus on the community is evident in its fundraise, as it launched a crowdfunding campaign to raise money in order to help it accelerate growth in new collectible areas, expand into auctions (currently MySlabs only offers buy-it-now / best offer listings), and spend on sales and marketing to acquire new customers. A company like this is sure to have attracted venture capital and/or private equity interest. But being able to control its own destiny, grow at its preferred pace, and remain focused on making the best decisions for the hobby are the reasons why a VC/PE investment might not be attractive to MySlabs. The amount of control and direction a VC/PE firm would have on the day-to-day and long-term plan of MySlabs might fly in the face of its community-focused approach. Because its customer-centric ways have gotten it to this point, the industry is hoping MySlabs will continue to practice this as it fires up its growth engine alongside this fundraise.
In the longer-term, as the industry gets back on stronger footing and the economy as a whole normalizes, there is potential for new marketplaces to enter, slash fees, and attract volume to its platform away from legacy players and MySlabs. This strategy is reflective of the venture capital-focused investments made into the hobby the last few years – hypergrowth at any cost and a focus on profits later. That is not the prevailing strategy in today’s market, but sooner or later, there will be another wave of that type of activity. In order to sustain its competitive advantages, MySlabs should focus on a few areas of growth. First, expanding into other collectibles verticals (like coins and currency) and attempting to gain loyal followings in each will allow it to become an end-to-end collectibles marketplace, not leaving white space for new upstarts. Second, developing, launching, and perfecting an auction system is key to attracting greater share of wallet from current customers and winning new customers away from auction sites. Finally, exploring additional revenue streams, similar to its existing insurance service, will make the company better diversified and vertically integrated, putting it on the path of becoming more of a one-stop shop for all collectors.
The future for MySlabs seems bright, but hitting on its growth strategy in the next 1-2 years is critical to ensuring its longer-term success. This will be an interesting company and space to watch moving forward.