Music e-tail phenom goes global
One of the biggest stories in music retail of late has been the emergence and rise of Reverb.com. The brainchild of Chicago Music Exchange owner David Kalt, Reverb, as it is commonly called, is the online sales platform for new and used musical gear developed to compete with eBay and Amazon. In just three years since its launch, Reverb amassed some 500,000 registered users and attracts roughly 5.5 million unique visitors every month. Transactions conducted on the site climbed to $140 million this year, and Kalt projects that number to reach $300 million in 2016. The next step toward world domination, of course, was to “take this show on the road.” Starting this year, Reverb.com began rolling out a range of services aimed at facilitating transactions across international borders.
Director of International Strategy Kevin Drost points out the historic scarcity of both new and vintage musical instruments in some parts of the world due to geophysical and logistical barriers and restrictive distribution agreements. “In the past,” he explains, “if you were in Tokyo and wanted a pre-CBS Stratocaster, you likely had to buy one from a broker or dealer who had flown to the U.S. to find the guitar, purchase it, and import it into Japan. That broker would charge a significant markup for services. Alternatively, the buyer could use a generic platform like eBay, which is expensive, fraud-prone, and not at all geared toward musicians. As a result, prices on U.S. instruments tend to be 20-40% higher in Europe and Asia. A similar story exists in the U.S., where there is high demand for, say, made-in-Japan Fender models and colors that were never exported to the States.”
Reverb.com has changed the game by enabling buyers and sellers from all over the world to interact with each other in a safe environment that’s tailor-made for musicians and musical instrument dealers. The site’s vast selection of new and used products includes guitars, drums, DJ equipment, pro audio gear, band & orchestra instruments, and accessories. Using Drost’s same pre-CBS Strat example, ten years ago a buyer in Tokyo would have been lucky to have a handful to choose from, he suggests. Now, on any given day, Reverb offers more than 150.
To create this global marketplace, Reverb has developed new infrastructure and multiple tools designed to facilitate buying and selling internationally. They include supporting multiple currencies, international shipping cost estimators, step-by-step guides to international shipping and customs forms, and multilingual customer support. All of this is driven by a staff of more than 70 passionate gear aficionados who want nothing more than to help musicians finally get their hands on that perfect guitar, pedal, synth, drumset, etc.
With Reverb’s recent expansion, foreign buyers and sellers gain an unprecedented opportunity. Buyers are able to purchase gear they’ve always dreamed of at prices that may have never been available to them. On Reverb they can browse and pay in their own local currency and negotiate directly with the seller on final price and shipping charges. Reverb’s signature buyer protection ensures that the transaction is safe and secure. The site also provides a comprehensive price guide, which Kalt characterizes as “a Kelley Blue Book for musical instruments and pro audio gear.” Currently including about 16,000 listings, the guide allows both buyers and sellers to see historical transactions and prices for all types of gear, helping to assure all parties that they’re getting a fair deal.
Meanwhile, sellers gain access to millions of customers all over the world who are actively looking to buy their products. Since Reverb.com’s official launch in 2013, 100,000 sellers have set up a shop on the site, ranging from large dealers such as Sam Ash, Full Compass, and Cascio to the smallest independents, as well as major manufacturers and a growing number of boutique guitar, amp, and effects pedal makers. Those numbers include thousands of stores in Canada, Europe, and Asia that have started selling on the site. “Reverb invests significant marketing dollars to ensure a small guitar shop in, say, Wisconsin is able to have their guitar seen by a buyer in London, at no cost to them. Similarly, a seller in Paris has direct access to a buyer in Sydney,” Drost explains. “For a store or individual, it takes maybe five minutes to list an item for sale on Reverb. When the item sells, the funds are deposited directly into their bank account or PayPal account. It costs nothing to list an item on Reverb, and only a 3.5% sales fee when it sells.”
That modest 3.5% fee paid to Reverb is a real bargain compared with Amazon’s 15% and eBay’s 10%, and one of the main reasons the business has grown so rapidly. In addition to the price guide, other attractions include an extremely user-friendly site and musician-friendly shopping experience, with “curated” product exhibits and a growing body of musician-targeted articles written by Reverb.com employees or outside experts. Sophisticated software analytics and a vigilant content team identify and remove content deemed fraudulent, counterfeit, or having questionable descriptions, bad photography, or prices that are out of line with historical norms. And for sellers, Reverb bans buyers who make many (often lowball) offers but never buy anything.
All told, Reverb.com represents both a square deal and a perfect online environment for buying and selling musical gear. “We’re looking to replicate what we’ve done in the U.S. by helping sellers all over the world grow their business, both locally and internationally,” Drost concludes. “So far the response has been fantastic, so look for a steady stream of new international features to launch in 2016.”
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